Although COVID-19 has slowed down expansion plans for PriceSmart Inc in its target markets, the Jamaican operation was able to deliver a second consecutive year of double-digit growth in net merchandising sales of 10.3 per cent, while contributing to a favourable net currency gain of US $1.1 million ($157.27 million) in the fourth quarter to the group.

Due to space constraints at its Red Hills Road store, PriceSmart expanded and reorganised to capitalise on the substantial demand for its products. As a result, the store was able to set an all-time record in December 2019 for its bakery to the tune of US$1.6 million ($228.75 million). Jamaica also had three consecutive quarters of double-digit sales growth with the fourth quarter only recording a 6.6 per cent increase in net merchandising sales.

The company also inked new deals with Mailpac and other partners for its delivery options to customers.

On December 17, PriceSmart announced that it will be opening two new locations — one in Guatemala City, Guatemala, in the fall of 2021, and the other in Portmore, Jamaica in spring 2022 — bringing to 49 the total number of warehouse clubs it operates in 12 countries.

The Portmore store will sit on approximately 218,000 square feet of land the company acquired in September 2019.

PriceSmart’s Caribbean operations grew total revenue by six per cent to US$993.7 million ($142.1 billion) with operating income climbing by 13 per cent to US$57.2 million. Net profit grew by 15 per cent to US$50.6 million ($7.2 billion) as customers flocked the stores to secure products to survive the initial COVID-19 lockdown.

Overall sales for PriceSmart grew by three per cent to US$3.3 billion with membership income climbing by five per cent to US$54.5 million for the financial year, despite the 12-month renewal rate declining by 85.7 per cent to 80.5 per cent mainly due to mobility restrictions which impacted in-club renewals.

The company launched its Click & Go option for curbside pick-up or delivery to customers in the latter half of the fiscal year which made up 3.6 per cent (US$27.8 million) of net sales in the fourth quarter. The service has been gaining more traction as PriceSmart launches its online catalog of available products.

Net profit attributable to shareholders increased by seven per cent to US$78.1 million against a backdrop of varied impacts to their target markets.

Total assets for the Nasdaq-listed company climbed by 28 per cent to US$1.7 billion while total liabilities increased by 65 per cent to US$824.1 million as the company drew down on credit lines during the pandemic, which resulted in current liabilities growing to US$568.3 million. Equity attributable to shareholders rose by four per cent to US$831.7 million as the company maintained its dividend policy of US$21.5 million while maintaining a solid cash balance of US$303.8 million.

Despite strong sales in Trinidad and Tobago, PriceSmart has begun to face a steep challenge in sourcing US dollars and other tradeable currencies to import certain goods. Although there has been strong single-digit net sales in the country, the illiquid currency market has made it difficult for the company. This led to group CEO Sherry Bahrambeygui’s less than positive outlook for the second-largest outfit in the Caribbean operation in a recent conference call. PriceSmart Trinidad had US$79.6 million worth of TTD cash on hand up to August 31.

“In August, the liquidity situation began deteriorating further, and as a result of not being able to source enough US dollars to pay for our imports into Trinidad, we recently began to restrict shipments into this country in line with the amount of US dollars we are able to source,” Bahrambeygui said.

“This situation is dynamic, and we are making all reasonable efforts to source tradeable currencies with our banks, as well as taking action to convert to locally-sourced products where feasible, and looking for alternatives to export merchandise from Trinidad to generate more tradeable currencies. If this situation does not improve rapidly, it is likely that sales and our profitability in Trinidad will be negatively impacted as soon as our fiscal second quarter,” she added.

“Despite the challenges we faced during the second half of the fiscal year, we believe that we are emerging as a stronger company. As conditions evolve during fiscal 2021, we continue to monitor our cash position closely. However, based on current trends and forecasts we currently expect to have fully paid down these lines of credit by the end of our fiscal third quarter,” Bahrambeygui said.

“We will continue to focus on the six rights of merchandising with the goal of driving same-store sales, continuing to expand our Click & Go service and developing and growing our digitally-enabled omnichannel platform. Thank you all for your support during these times of uncertainty. We believe that we are on the right path for continued success,” Bahrambeygui added.