PriceSmart Inc has lauded the outstanding performance of its Jamaican operations in the 2024 financial year (FY) ending September 1, where the overall Caribbean segment revenue grew by seven per cent to US$1.35 billion ($212.33 billion).

Jamaica was the spotlight market for the Nasdaq-listed company which noted that PriceSmart (Jamaica) Limited grew its net merchandise sales by 12.2 per cent through its two warehouse clubs. The last time PriceSmart (Jamaica) received high praises from its parent company was in 2020 when it had 10.3 per cent year-on-year growth in net merchandise sales and in 2019 when Jamaica had 11.5 per cent growth. 2020 and 2019 were years when PriceSmart (Jamaica) had just completed the expansion of parking at its sole Red Hills Road location and had a record US$1.6 million ($228.75 million) in bakery sales for December 2019.

This impressive performance by its Jamaican operations has seen the company embark on an expansion plan for its Portmore location, its second store in Jamaica and 50th location in the region, which is set to increase sales floor space by up to 20 per cent. PriceSmart also planned to introduce an audiology centre in Jamaica during the 2024 FY. PriceSmart Realty (Jamaica) Limited has applied in the last four years to the National Environmental Planning Agency (NEPA) and other municipal bodies for the development of its third warehouse in Jamaica, but nothing concrete has emerged on the location which is set to be in St James.

PriceSmart also completed the expansion of its warehouse club in Liberia, Costa Rica in the fourth quarter and is currently expanding its San Salvador, El Salvador club. It also completed the remodelling of its Port of Spain, Trinidad & Tobago location and continues its remodelling activities in San Pedro Sula, Honduras and Santiago, Dominican Republic.

“‘I’m also excited about our distribution centre initiatives because I think, having been here in this business since the day one, distribution has always been a key to this business because we really have the benefit of getting lower prices because of the efficiencies of how we distribute our products. And I think these in-country distribution centres in our major markets have the benefit both of allowing us to bring product in net landed cost will be lower and also improve operating efficiencies within the country. And that is a very positive benefit going forward for us to be able to continue to bring better values to our members. And those are some of the things that I think are pretty positive,” said PriceSmart founder and interim Chief Executive Officer Robert Price to Scotiabank’s Associate Director of Equity Research Hector Maya on the company’s October 31 earnings call.

While PriceSmart doesn’t disaggregate its operations by market except for Colombia, its Caribbean operations have continued to surge in revenue generation with improved sales across all its 14 Caribbean clubs compared to August 2020 when it generated US$993.66 million in revenue from 13 clubs. Operating income for the segment grew 10 per cent year-on-year to US$96.64 million while net profit attributable to shareholders rose 14 per cent to US$77.98 million. Total assets also improved by six per cent to US$451.27 million with US$38.78 million spent during the 2024 FY on capital expenditure. Countries listed under the Caribbean segment include Aruba, Barbados, Dominican Republic, Jamaica, Trinidad & Tobago and the US Virgin Islands.

Membership income for the Caribbean segment rose 12 per cent from US$17.64 million to US$19.68 million. This was attributed to a three per cent increase in membership accounts from 467,661 accounts to 482,914 accounts. Also, PriceSmart increased the membership fee on its Diamond and Platinum memberships by $5 in the first half of its 2024 FY across all its market except for one. 61.3 per cent of PriceSmart’s members have created an account on its website with 28.5 per cent of its entire membership base buying items from the website or mobile application. PriceSmart had a renewal rate of 87.9 per cent across its regional business which had 1,893,160 membership accounts at the start of September.

After ending its export relationship with S&R Membership Shopping in the Philippines, PriceSmart began exporting to another retailer in the Bahamas. This is in addition to the company setting up a distribution centre in China and will be developing its proprietary distribution centres in Trinidad, Panama and Guatemala. The company will also be leasing land to develop its 56th location in Quetzaltenango, Guatemala which should be opened in the summer of 2025. This is in addition to its Cartago, Costa Rica location which should open in spring 2025 and complements its four locations opened across Colombia, Guatemala and El Salvador over the last two years.

The company also rolled out an upgrade to its website and mobile app to update inventory availability more quickly and reduce friction in the shopping experience. It is also near the completion of its implementing Relex to streamline pricing and promotion planning while modernizing its inventory management. Pricesmart will also be Elera, a new point of sale (POS) system in one of its markets.

Despite all of the positive developments, PriceSmart continues to contend with foreign exchange conversion issues in Trinidad and Honduras. The amount of Trinidad & Tobago dollar (TTD) cash and cash equivalents and short and long-term investments has gone up from US$18.32 million in 2023 to US$60.2 million, which might be further compounded by the further restrictions by Trinidadian banks on USD usage with debit and credit cards. There was approximately US$22.3 million of Honduran Lempira which couldn’t be converted to USD. PriceSmart held US$121.58 million in its foreign subsidiaries.

PriceSmart’s full year saw the company’s total revenue rise 11 per cent to US$4.91 billion as it opened three new clubs and grew net merchandise sales to US$4.78 billion. Operating income grew 20 per cent to US$220.94 million while adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) rose 10 per cent to US$303.62 million. Net profit grew 27 per cent to US$138.88 million, but only improved by 10 per cent after accounting for several one-off events.

PriceSmart’s total assets improved to US$2.02 billion with cash closing the period at US$125.36 million. PriceSmart’s total liabilities and shareholder’s equity was US$899.73 million and US$1.12 billion, respectively. The company plans to take better advantage of tax credits it has with its USA business.

PriceSmart’s (PSMT) stock price was trading at US$90.77 which leaves it up 20 per cent in 2024 with a market capitalisation of $2.76 billion. PriceSmart paid its annual US$1.16 dividend in February and August and declared a special one-time dividend of US$1 which was paid in April. It also repurchased 1,007,000 shares under its US$75-million share repurchase programme.