PriceSmart, Inc. Files 10-Q for Period Ending February 29, 2024

TL;DR

<b>PriceSmart, Inc. (PSMT) filed its Q2 2024 10-Q report on April 9, 2024, detailing financial performance for the period ending February 29, 2024.</b>

AI Summary

PRICESMART INC (PSMT) filed a Quarterly Report (10-Q) with the SEC on April 9, 2024. PriceSmart, Inc. filed a 10-Q report for the period ending February 29, 2024. The filing covers the second quarter of fiscal year 2024. The company's fiscal year ends on August 31st. The filing was made on April 9, 2024. The company's SIC code is 5331 (Retail-Variety Stores).

Why It Matters

For investors and stakeholders tracking PRICESMART INC, this filing contains several important signals. This 10-Q filing provides investors with an updated view of PriceSmart's financial health and operational performance for the second quarter of fiscal year 2024. The detailed financial information within the report is crucial for understanding the company's revenue streams, expenses, and overall profitability trends.

Risk Assessment

Risk Level: low — PRICESMART INC shows low risk based on this filing. The filing is a standard 10-Q, which is a routine quarterly report and does not inherently contain new, significant risks beyond those typically associated with retail operations.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis in the 10-Q to assess PriceSmart's performance trends and identify any emerging risks or opportunities.

Key Numbers

• 2024-02-29 — Period End Date (Quarterly report period)
• 2024-04-09 — Filing Date (Date the report was filed)
• 0831 — Fiscal Year End (Company's fiscal year end month and day)
• 5331 — SIC Code (Standard Industrial Classification for the company)

Key Players & Entities

• PRICESMART INC (company) — Filer name
• 2024-02-29 (date) — Period of report
• 2024-04-09 (date) — Filing date
• 9740 SCRANTON ROAD (address) — Business address
• SAN DIEGO (location) — Business address city
• CA (location) — Business address state
• 92121 (postal_code) — Business address zip
• 8584048800 (phone_number) — Business phone

FAQ

Industry Context

PriceSmart operates as a membership warehouse retailer, similar to Costco, focusing on providing value to its members through a curated selection of merchandise.

Regulatory Implications

The filing is a 10-Q, which is a mandatory quarterly report filed by public companies with the SEC under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the revenue breakdown by segment (Net Merchandise Sales, Export Sales, Membership Income, Other Revenue) for Q2 2024 and compare with prior periods.
2. Examine the balance sheet for changes in assets, liabilities, and equity, paying attention to cash, debt, and inventory levels.
3. Review the Statement of Cash Flows to understand the company's cash generation and usage from operating, investing, and financing activities.

Key Dates

• 2024-02-29: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-04-09: Filing Date — Date the 10-Q report was officially submitted to the SEC.

Year-Over-Year Comparison

This is the initial filing for the period ending February 29, 2024. Comparative data from the previous year's quarter will be available within the detailed financial statements.

Key Financial Figures

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

Filing Documents

• psmt-20240229.htm (10-Q) — 1923KB
• amendedandrestatedemployme.htm (EX-10.1) — 105KB
• employmentagreementpaulkov.htm (EX-10.2) — 104KB
• psmt-20240228xexx311.htm (EX-31.1) — 10KB
• psmt-20240228xexx312.htm (EX-31.2) — 10KB
• psmt-20240228xexx321.htm (EX-32.1) — 4KB
• psmt-20240228xexx322.htm (EX-32.2) — 4KB
• 0001041803-24-000023.txt (&nbsp;) — 8806KB
• psmt-20240229.xsd (EX-101.SCH) — 60KB
• psmt-20240229_cal.xml (EX-101.CAL) — 92KB
• psmt-20240229_def.xml (EX-101.DEF) — 264KB
• psmt-20240229_lab.xml (EX-101.LAB) — 598KB
• psmt-20240229_pre.xml (EX-101.PRE) — 429KB
• psmt-20240229_htm.xml (XML) — 1402KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION ITEM 1.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 1 CONSOLIDATED BALANCE SHEETS AS OF FEBRUARY 29, 2024 (UNAUDITED) AND AUGUST 31, 2023 2 CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 29, 2024 AND FEBRUARY 28, 2023 - UNAUDITED 4 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 29, 2024 AND FEBRUARY 28, 2023 - UNAUDITED 5 CONSOLIDATED STATEMENTS OF EQUITY FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 29, 2024 AND FEBRUARY 28, 2023 - UNAUDITED 6 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED FEBRUARY 29, 2024 AND FEBRUARY 28, 2023 - UNAUDITED 8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED 10 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 33 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 60 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 61

- OTHER INFORMATION

PART II - OTHER INFORMATION ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 62 ITEM 1A.

RISK FACTORS

RISK FACTORS 62 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 62 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 62 ITEM 4. MINE SAFETY DISCLOSURES 62 ITEM 5. OTHER INFORMATION 63 ITEM 6. EXHIBITS 63 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 February 29, 2024 and the consolidated balance sheet as of August 31, 2023, the unaudited consolidated statements of income for the three and six months ended February 29, 2024 and February 28, 2023, the unaudited consolidated statements of comprehensive income for the three and six months ended February 29, 2024 and February 28, 2023, the unaudited consolidated statements of equity for the three and six months ended February 29, 2024 and February 28, 2023, and the unaudited consolidated statements of cash flows for the six months ended February 29, 2024 and February 28, 2023 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) February 29, 2024 (Unaudited) August 31, 2023 ASSETS Current Assets: Cash and cash equivalents $ 170,563 $ 239,984 Short-term restricted cash 2,834 2,865 Short-term investments 93,630 91,081 Receivables, net of allowance for doubtful accounts of $ 64 as of February 29, 2024 and $ 67 as of August 31, 2023 19,819 17,904 Merchandise inventories 502,292 471,407 Prepaid expenses and other current assets (includes $ 3,293 and $ 0 as of February 29, 2024 and August 31, 2023, respectively, for the fair value of derivative instruments) 58,514 53,866 Total current assets 847,652 877,107 Long-term restricted cash 9,178 9,353 Property and equipment, net 925,035 850,328 Operating lease right-of-use assets, net 100,175 114,201 Goodwill 43,131 43,110 Deferred tax assets 32,147 32,039 Other non-current assets (includes $ 1,918 and $ 7,817 as of February 29, 2024 and August 31, 2023, respectively, for the fair value of derivative instruments) 68,900 68,991 Investment in unconsolidated affiliates 10,558 10,479 Total Assets $ 2,036,776 $

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) February 29, 2024 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 February 29, 2024, the Company had 54 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 each in Trinidad and El Salvador; three in 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 one warehouse club in Cartago, Costa Rica in early 2025. Once this new club is open, the Company will operate 55 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, 2023 (th

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 February 29, 2024 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

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