PriceSmart, Inc. Files 10-Q for Period Ending November 30, 2023

TL;DR

<b>PriceSmart, Inc. reported Q1 FY2024 results, with net merchandise sales reaching $1.04 billion.</b>

AI Summary

PRICESMART INC (PSMT) filed a Quarterly Report (10-Q) with the SEC on January 9, 2024. Net merchandise sales for the first quarter of fiscal 2024 were $1,040,500,000. Export sales for the first quarter of fiscal 2024 totaled $103,100,000. Membership income for the first quarter of fiscal 2024 was $41,500,000. Other revenue and income for the first quarter of fiscal 2024 amounted to $10,000,000. The company filed its 10-Q report on January 9, 2024, covering the period from September 1, 2023, to November 30, 2023.

Why It Matters

For investors and stakeholders tracking PRICESMART INC, this filing contains several important signals. The filing provides a detailed look at the company's financial performance for the first quarter of fiscal year 2024, offering insights into revenue streams and sales trends. Investors can use this report to assess the company's operational efficiency and financial health, comparing current performance against historical data and industry benchmarks.

Risk Assessment

Risk Level: low — PRICESMART INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain significant new risks or disclosures beyond routine business operations.

Analyst Insight

Monitor PriceSmart's revenue growth and membership income trends in upcoming filings to assess continued market penetration and customer loyalty.

Revenue Breakdown

Key Numbers

• 1,040,500,000 — Net Merchandise Sales (Q1 FY2024)
• 103,100,000 — Export Sales (Q1 FY2024)
• 41,500,000 — Membership Income (Q1 FY2024)
• 10,000,000 — Other Revenue and Income (Q1 FY2024)

Key Players & Entities

• PRICESMART INC (company) — Filer
• 2023-11-30 (date) — Period of report
• 2024-01-09 (date) — Filing date
• SAN DIEGO (location) — Business address city
• 9740 SCRANTON ROAD (address) — Business address street
• CA (state) — Business address state
• 92121 (zip_code) — Business address zip
• 8584048800 (phone) — Business phone

FAQ

Key Dates

• 2023-11-30: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-01-09: Filing Date — Date the 10-Q report was officially filed with the SEC.

Key Financial Figures

• $0.0001 — ange on which registered Common Stock, $0.0001 par value PSMT NASDAQ Global Select Mar

Filing Documents

• psmt-20231130.htm (10-Q) — 1432KB
• psmt-20231130xexx311.htm (EX-31.1) — 10KB
• psmt-20231130xexx312.htm (EX-31.2) — 10KB
• psmt-20231130xexx321.htm (EX-32.1) — 4KB
• psmt-20231130xexx322.htm (EX-32.2) — 4KB
• 0001041803-24-000011.txt (&nbsp;) — 7434KB
• psmt-20231130.xsd (EX-101.SCH) — 57KB
• psmt-20231130_cal.xml (EX-101.CAL) — 90KB
• psmt-20231130_def.xml (EX-101.DEF) — 232KB
• psmt-20231130_lab.xml (EX-101.LAB) — 616KB
• psmt-20231130_pre.xml (EX-101.PRE) — 399KB
• psmt-20231130_htm.xml (XML) — 1165KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION ITEM 1.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 1 CONSOLIDATED BALANCE SHEETS AS OF NOVEMBER 30, 2023 (UNAUDITED) AND AUGUST 31, 2023 2 CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED NOVEMBER 30, 2023 AND 2022 - UNAUDITED 4 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED NOVEMBER 30, 2023 AND 2022 - UNAUDITED 5 CONSOLIDATED STATEMENTS OF EQUITY FOR THE THREE MONTHS ENDED NOVEMBER 30, 2023 AND 2022 - UNAUDITED 6 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2023 AND 2022 - UNAUDITED 7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED 9 ITEM 2.

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 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 50 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 51

- OTHER INFORMATION

PART II - OTHER INFORMATION ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 52 ITEM 1A.

RISK FACTORS

RISK FACTORS 52 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 52 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 52 ITEM 4. MINE SAFETY DISCLOSURES 52 ITEM 5. OTHER INFORMATION 53 ITEM 6. EXHIBITS 54 i Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS PriceSmart, Inc.'s ("PriceSmart," "we," the "Company" or "our") unaudited consolidated balance sheet as of November 30, 2023 and the consolidated balance sheet as of August 31, 2023, the unaudited consolidated statements of income for the three months ended November 30, 2023 and 2022, the unaudited consolidated statements of comprehensive income for the three months ended November 30, 2023 and 2022, the unaudited consolidated statements of equity for the three months ended November 30, 2023 and 2022, and the unaudited consolidated statements of cash flows for the three months ended November 30, 2023 and 2022 are included herein. Also included herein are the notes to the unaudited consolidated financial statements. 1 Table of Contents PRICESMART, INC. CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA) November 30, 2023 (Unaudited) August 31, 2023 ASSETS Current Assets: Cash and cash equivalents $ 174,452 $ 239,984 Short-term restricted cash 2,869 2,865 Short-term investments 88,002 91,081 Receivables, net of allowance for doubtful accounts of $ 62 as of November 30, 2023 and $ 67 as of August 31, 2023, respectively 17,645 17,904 Merchandise inventories 529,898 471,407 Prepaid expenses and other current assets (includes $ 3,532 and $ 0 as of November 30, 2023 and August 31, 2023, respectively, for the fair value of derivative instruments) 67,969 53,866 Total current assets 880,835 877,107 Long-term restricted cash 9,567 9,353 Property and equipment, net 873,440 850,328 Operating lease right-of-use assets, net 112,383 114,201 Goodwill 43,135 43,110 Deferred tax assets 31,253 32,039 Other non-current assets (includes $ 2,864 and $ 7,817 as of November 30, 2023 and August 31, 2023, respectively, for the fair value of derivative instruments) 68,123 68,991 Investment in unconsolidated affiliates 10,543 10,479 Total Assets $ 2,029,279 $ 2,005,608 LIABILITIES AND EQUITY Current Liabilities: Sho

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) November 30, 2023 NOTE 1 – COMPANY OVERVIEW AND BASIS OF PRESENTATION PriceSmart, Inc.'s ("PriceSmart," the "Company," "we" or "our") business consists primarily of international membership shopping warehouse clubs similar to, but typically smaller in size than, warehouse clubs in the United States. As of November 30, 2023, the Company had 53 warehouse clubs in operation in 12 countries and one U.S. territory ( ten in Colombia; eight in Costa Rica; seven in Panama; six in Guatemala; five in Dominican Republic; four in Trinidad; three each in El Salvador and Honduras; two each in Nicaragua and Jamaica; and one each in Aruba, Barbados and the United States Virgin Islands), of which the Company owns 100 % of the corresponding legal entities (see Note 2 - Summary of Significant Accounting Policies). In addition, the Company plans to open a new warehouse club in Santa Ana, El Salvador in February 2024. Once this new club is open, the Company will operate 54 warehouse clubs. Our operating segments are the United States, Central America, the Caribbean and Colombia. PriceSmart continues to invest in technology and talent to support the following three major drivers of growth: 1. Invest in Remodeling Current PriceSmart Clubs, Adding New PriceSmart Locations and Opening More Distribution Centers; 2. Increase Membership Value; and 3. Drive Incremental Sales via PriceSmart.com and Enhanced Online, Digital and Technological Capabilities. Basis of Presentation – The interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended August 31,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) In the case of the Company's ownership interest in real estate development joint ventures, both parties to each joint venture share all rights, obligations and the power to direct the activities of the VIE that most significantly impact the VIE's economic performance. As a result, the Company has determined that it is not the primary beneficiary of the VIEs and, therefore, has accounted for these entities under the equity method. Under the equity method, the Company's investments in unconsolidated affiliates are initially recorded as an investment in the stock of an investee at cost and are adjusted for the carrying amount of the investment to recognize the investor's share of the earnings or losses of the investee after the date of the initial investment. The Company's ownership interest in real estate development joint ventures the Company has recorded under the equity method as of November 30, 2023 are listed below: Real Estate Development Joint Ventures Countries Ownership Basis of Presentation GolfPark Plaza, S.A. Panama 50.0 % Equity (1) Price Plaza Alajuela PPA, S.A. Costa Rica 50.0 % Equity (1) (1) Joint venture interests are recorded as investment in unconsolidated affiliates on the consolidated balance sheets. Use of Estimates – T he preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable. Actual results could differ from those estimates and assumptions. Cash and Cash Equivalents – The Company considers as cash and cash equivalents all cash on deposit, highly liquid investments with a maturity of three months or less at the date of purchase and proceeds due from credit and debit card transactions in the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Receivables – Receivables consist primarily of credit card receivables and receivables from vendors and are stated net of allowances for credit losses. The determination of the allowance for credit losses is based on the Company's assessment of collectability along with the consideration of current and expected market conditions that could impact collectability. Tax Receivables – The Company pays Value Added Tax ("VAT") or similar taxes, income taxes, and other taxes within the normal course of business in most of the countries in which it operates related to the procurement of merchandise and/or services the Company acquires and/or on sales and taxable income. VAT is a form of indirect tax applied to the value added at each stage of production (primary, manufacturing, wholesale and retail). This tax is similar to, but operates somewhat differently than, sales tax paid in the United States. The Company generally collects VAT from its Members upon sale of goods and services and pays VAT to its vendors upon purchase of goods and services. Periodically, the Company submits VAT reports to governmental agencies and reconciles the VAT paid and VAT received. The net overpaid VAT may be refunded or applied to subsequent returns, and the net underpaid VAT must be remitted to the government. With respect to income taxes paid, if the estimated income taxes paid or withheld exceed the actual income tax due this creates an income tax receivable. In most countries where the Company operates, the governments have implemented additional collection procedures, such as requiring credit card processors to remit a portion of sales processed via credit and debit cards directly to the government as advance payments of VAT and/or income tax. This collection mechanism generally leaves the Company with net VAT and/or income tax receivables, forcing the Company to process significant refund claims on a recurring basis. These refund

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Long-term VAT and Income tax receivables, recorded as Other non-current assets: This classification is used for amounts not approved for refund or credit in countries where the Company's subsidiary has not demonstrated the ability to obtain refunds within one year and/or for amounts which are subject to outstanding disputes. An allowance is provided against VAT and income tax receivable balances in dispute when the Company does not expect to eventually prevail in its recovery. The Company does not currently have any allowances provided against VAT and income tax receivables. The following table summarizes the VAT receivables reported by the Company (in thousands): November 30, 2023 August 31, 2023 Prepaid expenses and other current assets $ 3,029 $ 2,774 Other non-current assets 37,469 36,060 Total amount of VAT receivables reported $ 40,498 $ 38,834 The following table summarizes the Income tax receivables reported by the Company (in thousands): November 30, 2023 August 31, 2023 Prepaid expenses and other current assets $ 20,269 $ 17,749 Other non-current assets 21,836 19,176 Total amount of income tax receivables reported $ 42,105 $ 36,925 Lease Accounting – The Company's leases are operating leases for warehouse clubs and non-warehouse club facilities such as corporate headquarters, regional offices, and regional distribution centers. The Company determines if an arrangement is a lease and classifies it as either a finance or operating lease at lease inception. Operating leases are included in Operating lease right-of-use assets, n

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View this 10-Q filing on SEC EDGAR