PriceSmart Expands Club Footprint, Boosts Platinum Memberships

TL;DR

**PriceSmart is aggressively expanding its footprint and successfully upselling members to its Platinum tier, signaling strong growth potential in its niche markets.**

AI Summary

PriceSmart, Inc. (PSMT) reported 56 warehouse clubs in operation as of August 31, 2025, an increase from 54 in the prior fiscal year, with plans to open three more by fall 2026 in the Dominican Republic and Jamaica, bringing the total to 59. The company is actively pursuing expansion into Chile, having appointed a country general manager and secured an executory agreement for a potential site. Membership fees contributed approximately 1.7% of net merchandise sales and 36.8% of operating income in fiscal year 2025, bolstered by a $5 fee increase in most markets during fiscal year 2024. Platinum Membership accounts grew significantly, from 12.3% to 17.9% of the total membership base by August 31, 2025, indicating strong engagement with higher-value offerings. The company continues to invest in technology for digital shopping and supply chain efficiencies, including new distribution centers in Panama and Guatemala, with plans for Trinidad and the Dominican Republic in fiscal year 2026. Merchandise sales were primarily driven by Consumables (47%) and Fresh Foods (31%), with Health Services (optical, audiology, pharmacy) expanding to 55 optical, 22 pharmacy, and 30 audiology locations.

Why It Matters

PriceSmart's strategic expansion into new markets like Chile and the addition of three new clubs by fall 2026 signal aggressive growth, potentially increasing market share and revenue for investors. The significant growth in Platinum Memberships, from 12.3% to 17.9% of the base, demonstrates strong customer loyalty and a successful premiumization strategy, which could lead to higher average spending and more stable revenue streams. For employees, this expansion and investment in distribution centers in Panama, Guatemala, Trinidad, and the Dominican Republic could mean new job opportunities and enhanced operational efficiencies. In a competitive retail landscape, PriceSmart's focus on omni-channel capabilities and unique 'Member's Selection' private label products helps differentiate it from local competitors and global giants, potentially solidifying its position in Central America, the Caribbean, and Colombia.

Risk Assessment

Risk Level: medium — The company's planned expansion into Chile and the opening of new clubs in existing markets introduce execution risks, including securing appropriate sites and governmental permits, as noted in the filing. Furthermore, PriceSmart's reliance on sourcing approximately 49% of its merchandise from the U.S., Asia, and Europe exposes it to global supply chain disruptions and currency fluctuations, which could impact profitability.

Analyst Insight

Investors should monitor PriceSmart's progress in its Chile expansion and the performance of its new distribution centers, as these are key drivers for future growth and efficiency. The strong uptake in Platinum Memberships suggests a successful loyalty program, indicating potential for sustained revenue growth and improved margins.

Revenue Breakdown

Key Numbers

• $2,338,529,913 — Aggregate market value of common equity held by non-affiliates (As of February 28, 2025, based on $89.39 per share.)
• 30,888,771 — Shares of Common Stock outstanding (As of October 24, 2025.)
• 56 — Warehouse clubs in operation (As of August 31, 2025, up from 54 in 2024.)
• 59 — Anticipated total warehouse clubs (Once three new clubs in Dominican Republic and Jamaica open.)
• 2 million — Membership accounts (As of August 31, 2025, indicating strong customer base.)
• 4 million — Cardholders (As of August 31, 2025, reflecting broad reach.)
• 1.7% — Membership fees as a percentage of net merchandise sales (In fiscal year 2025, contributing to profitability.)
• 36.8% — Membership fees as a percentage of operating income (In fiscal year 2025, highlighting their importance to the bottom line.)
• 17.9% — Platinum Membership accounts of total membership base (As of August 31, 2025, an increase from 12.3% in 2024.)
• 12,000 — Employees (Globally, indicating significant workforce.)

Key Players & Entities

• PriceSmart, Inc. (company) — Registrant
• Sol Price (person) — Founder of PriceSmart and Price Club
• Robert Price (person) — Founder of PriceSmart and Price Club
• NASDAQ Global Select Market (regulator) — Exchange where PSMT Common Stock is registered
• Price Philanthropies Foundation (company) — Partner in community programs
• PriceSmart Foundation (company) — Makes grants for youth workforce development
• Chile (company) — New market for expansion
• Dominican Republic (company) — Location of new warehouse club in La Romana
• Jamaica (company) — Location of new warehouse clubs in Montego Bay and South Camp Road
• Guatemala (company) — Location of Miraflores club relocation and new dry distribution center

FAQ

Risk Factors

• Supply Chain Disruptions [medium — operational]: The company relies on a global supply chain, sourcing approximately half of its merchandise from Latin America and the Caribbean. Disruptions due to geopolitical events, natural disasters, or logistical challenges could impact product availability and costs.
• Competition in Emerging Markets [medium — market]: PriceSmart operates in Central America, the Caribbean, and South America, facing competition from local and international retailers. Expansion into new markets like Chile requires significant investment and carries the risk of not achieving expected market penetration.
• Technology and Cybersecurity Risks [medium — operational]: Significant investments in technology for digital shopping and supply chain efficiencies expose the company to cybersecurity threats. A breach could compromise member data and disrupt operations.
• Foreign Currency Fluctuations [medium — financial]: Operating in multiple countries exposes PriceSmart to foreign currency exchange rate fluctuations, which can impact reported financial results and the cost of goods sold.
• Compliance with Local Regulations [low — regulatory]: Operating in diverse international markets requires adherence to a variety of local laws and regulations, including those related to labor, consumer protection, and business practices. Non-compliance could lead to fines or operational restrictions.

Industry Context

PriceSmart operates in the warehouse club retail sector, primarily in emerging markets across Latin America and the Caribbean. This sector is characterized by a focus on value, bulk purchasing, and membership-based access. Key trends include the integration of digital shopping channels, supply chain optimization, and the expansion of ancillary services like health and optical.

Regulatory Implications

PriceSmart must navigate a complex regulatory landscape across its various operating countries, including compliance with consumer protection laws, labor regulations, and import/export requirements. Cybersecurity regulations are also increasingly important given the company's investment in digital platforms and data management.

What Investors Should Do

1. Monitor expansion into Chile
2. Track membership growth and tier mix
3. Assess impact of technology investments
4. Observe merchandise sales trends by category

Key Dates

• 2025-08-31: 56 warehouse clubs in operation — Represents growth from 54 clubs in the prior year, indicating physical expansion.
• 2025-08-31: 2 million membership accounts — Demonstrates a substantial and loyal customer base.
• 2025-08-31: 17.9% Platinum Membership accounts — Shows increased adoption of higher-tier memberships, suggesting strong customer value perception.
• 2026-10-01: Anticipated opening of three new clubs — Further expansion in the Dominican Republic and Jamaica, signaling continued growth strategy.

Glossary

Warehouse Club

A retail store, typically large, that sells a variety of merchandise to its members, often in bulk quantities. (This is the core business model of PriceSmart.)

Net Merchandise Sales

The total revenue generated from the sale of goods, net of returns and allowances. (Key metric for evaluating the performance of the company's core retail operations.)

Membership Fees

Revenue generated from charging customers an annual fee to access the warehouse club's offerings. (A significant contributor to PriceSmart's operating income, highlighting the value of its membership model.)

Platinum Membership

A premium tier of membership offering enhanced benefits, likely at a higher fee. (Growth in this segment indicates successful upselling and strong customer engagement with premium offerings.)

Consumables

Products that are used up or consumed over a short period, such as food, beverages, and household supplies. (A major category driving PriceSmart's merchandise sales.)

Click & Go

PriceSmart's service offering curbside pickup for online orders. (Part of the company's investment in digital shopping and omnichannel capabilities.)

Year-Over-Year Comparison

The company reported an increase in warehouse clubs to 56 from 54 in the prior year, signaling continued physical expansion. Membership fees' contribution to operating income has become more pronounced, highlighting their importance to profitability, especially after a fee increase in fiscal year 2024. Platinum memberships have seen significant growth, indicating a successful push towards higher-value offerings. Investments in technology and new distribution centers suggest a focus on modernizing operations and improving efficiency.

Key Financial Figures

• $0.0001 — ange on which registered Common Stock, $0.0001 par value PSMT NASDAQ Global Select Mar
• $89.39 — ased on the last reported sale price of $89.39 per share on the NASDAQ Global Select M
• $11.9 million — p with that retailer ceased, except for $11.9 million of outstanding merchandise orders fulfi
• $5 — nce. We increased the membership fee by $5 in all but one market during fiscal yea
• $306.7 m — 2025, our digital channel sales reached $306.7 million, a 21.6% increase year-over-year,

Filing Documents

• psmt-20250831.htm (10-K) — 2778KB
• psuagreement.htm (EX-10.10) — 67KB
• amendmenttowsadinemploymen.htm (EX-10.21) — 12KB
• psmt-20250831x10xkxexx2111.htm (EX-21.1) — 37KB
• psmt-20250831x10kxexx2311.htm (EX-23.1) — 3KB
• psmt-20250831x10kxexx3111.htm (EX-31.1) — 9KB
• psmt-20250831x10kxexx3121.htm (EX-31.2) — 9KB
• psmt-20250831x10kxexx3211.htm (EX-32.1) — 4KB
• psmt-20250831x10kxexx3221.htm (EX-32.2) — 4KB
• 0001041803-25-000060.txt ( ) — 14490KB
• psmt-20250831.xsd (EX-101.SCH) — 103KB
• psmt-20250831_cal.xml (EX-101.CAL) — 125KB
• psmt-20250831_def.xml (EX-101.DEF) — 441KB
• psmt-20250831_lab.xml (EX-101.LAB) — 1063KB
• psmt-20250831_pre.xml (EX-101.PRE) — 786KB
• psmt-20250831_htm.xml (XML) — 2483KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 10 Item 1B. Unresolved Staff Comments 23 Item 1C. Cybersecurity 24 Item 2.

Properties

Properties 26 Item 3.

Legal Proceedings

Legal Proceedings 27 Item 4. Mine Safety Disclosures 27 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. Reserved 29 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 51 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 55 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 55 Item 9A.

Controls and Procedures

Controls and Procedures 55 Item 9B. Other Information 58 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 58 PART III Item 10. Directors, Executive Officers and Corporate Governance 58 Item 11 .

Executive Compensation

Executive Compensation 58 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 58 Item 13. Certain Relationships and Related Transactions, and Director Independence 58 Item 14. Principal Accounting Fees and Services 59 PART IV Item 15. Exhibits, Financial Statement Schedules 60 Item 16. Form 10-K Summary 62

Signatures

Signatures 64 i Table of Contents

Forward-Looking Statements

Forward-Looking Statements This annual report on Form 10-K contains forward-looking statements concerning PriceSmart, Inc.'s ("PriceSmart", the "Company", "we" or "our") anticipated future revenues and earnings, adequacy of future cash flows, omni-channel initiatives, proposed warehouse club openings, the Company's performance relative to competitors and related matters. These forward-looking statements include, but are not limited to, statements containing the words "expect," "believe," "will," "may," "should," "project," "estimate," "anticipated," "scheduled," "intend," and like expressions, and the negative thereof. These statements are subject to risks and uncertainties that could cause actual results to differ materially including, but not limited to the risks detailed in this Annual Report on Form 10-K under the heading Part I. "Item 1A. Risk Factors." These risks are not the only risks that the Company faces. The Company could also be affected by additional factors that apply to all companies operating globally and in the U.S., as well as other risks that are not presently known to the Company or that the Company currently considers to be immaterial. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements, except as required by law. PART I

Business

Item 1. Business General PriceSmart was founded in 1996 by Sol and Robert Price, the creators of Price Club, the original warehouse club operator. The mission of PriceSmart is to operate its warehouse club business in Central America, the Caribbean and South America at operating standards as good as, or superior to, warehouse club operations in the United States. As of August 31, 2025 , we had 56 warehouse clubs in operation in Central America, the Caribbean and Colombia. In addition, we are continuing to advance our planned expansion into Chile, which we believe is a promising new market for our business model. We believe PriceSmart has become one of the most respected and trusted brands in the countries where we operate and with over two million membership accounts, and almost four million cardholders, we believe PriceSmart is an essential part of the shopping experience for consumers and small businesses in PriceSmart's markets. PriceSmart sources approximately half of its merchandise from suppliers within Latin America and the Caribbean, with the balance of merchandise sourced throughout the rest of the world. Product selection includes basic consumable merchandise for consumers and businesses, " Member's Selection " private label merchandise and consumable and non-consumable products that are often not otherwise available in our markets. PriceSmart continually focuses on innovation. In recent years, PriceSmart has added optical, audiology, and pharmacy services in many of its locations. Beyond in-club shopping, our Members can shop via our mobile app or online at PriceSmart.com, both of which offer home delivery and curbside pickup via its Click & Go service. PriceSmart is making significant investments in technology to both improve the digital shopping experience for its Members and to enhance operating efficiencies in its supply chain and the back office. We seek to be an outstanding place to work and provide safe and pleasant working environments for o

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View this 10-K filing on SEC EDGAR