About PriceSmart

PriceSmart, Inc. owns and operates the U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean. The company operates warehouse clubs in 12 countries in U.S. territory (in Colombia; in Costa Rica; in Panama; in the Dominican Republic and Guatemala; in Trinidad; in Honduras; in El Salvador, Nicaragua and Jamaica; and in Aruba, Barbados and the United States Virgin Islands). The company also plans to open new warehouse clubs in San Miguel, El Salvador in the spring of 2023 and in Medellín, Colombia in the summer of 2023. Once these two new clubs are open, the company will operate 52 warehouse clubs. The company’s segments include the United States, Central America, the Caribbean and Colombia. The company operates warehouse clubs in Central America, the Caribbean, and Colombia. In all 13 markets, the company’s Members are able to engage with the company on social media and shop on its e-commerce platform, PriceSmart.com. The company’s curated selection offers a combination of specialty items that are imported and/or unique to its markets, locally and regionally sourced goods, essential goods, direct-from-farm fresh produce and private label consumer products under the brand Member’s Selection. The company’s Member’s Selection offering allows it to maintain key quality items at lower prices and provides the opportunity to reduce supply chain risks. The company also offers prepared foods and fresh-baked goods. Most merchandise is available for online ordering through PriceSmart.com and for delivery or contactless curbside pickup through the company’s Click & Go service. The company also offers Wellness programs, such as Optical, Pharmacy and Audiology. The company’s clubs typically feature food courts and tire centers and services. The company is a significant provider of goods to small businesses in its markets that benefit from larger pack sizes and lower pricing. The company’s warehouse clubs range in sales floor size from approximately 30,000 to 60,000 square feet. The company’s larger clubs are typically located in and around densely populated major cities that include a large penetration of consumers with significant disposable income. The company’s smaller clubs tend to be in areas with less population density, but where there are significant opportunities to serve the population and supply and support businesses. The company strategically invests in technology to enhance Member experience and convenience. The company provides digital membership and auto-renewal for the convenience of its Members. The company’s logistics and distribution infrastructure is key to maximizing efficiencies. The company continually reviews and upgrades its logistics and distribution systems in an attempt to capture efficiencies as its business grows in sales volume, in geography and through activity generated by e-commerce. The company utilizes regional distribution centers in the U.S. and Costa Rica, as well as several local distribution centers to distribute merchandise efficiently and to create flexibility to mitigate the risk of supply-chain disruption. The company’s warehouse clubs operate in emerging markets that historically have had higher growth rates and lower warehouse club market penetration than the U.S. market. The company’s warehouse clubs, one regional distribution center and several smaller local distribution centers are located in Latin America and the Caribbean, and its corporate headquarters, the U.S. buying operations and its larger regional distribution center are located primarily in the United States. The company is constructing a smaller format warehouse club in the Hacienda San Andres area of San Miguel, El Salvador, approximately 100 miles east of the capital city San Salvador, which is anticipated to open in the spring of 2023. It will be the company’s third club in El Salvador. In addition, the company is proceeding with the construction of a smaller format warehouse club in the affluent El Poblado area of Medellín, Colombia. The company expects to open this warehouse club, which will be its second club in Medellín and the company’s tenth warehouse club in Colombia, in the summer of 2023. The company also exports products to a retailer in the Philippines and is exploring expansion of that business in other markets. Merchandising The company offers merchandise in the following categories: Foods and Sundries consists primarily of the company’s grocery, cleaning supplies, health and beauty and canned foods products and constituted approximately 49% of net merchandise sales for the year ended August 31, 2022. Fresh Foods consists primarily of the company’s meat, produce, deli, seafood and poultry products and constituted approximately 29% of net merchandise sales for the year ended August 31, 2022. Hardlines consists primarily of the company’s electronics, appliances, hardware, sporting goods, and toy products and constituted approximately 11% of net merchandise sales for the year ended August 31, 2022. Softlines consists primarily of apparel, domestics and furniture products and constituted approximately 6% of the company’s net merchandise sales for the year ended August 31, 2022. Other Business consists primarily of the company’s food service, bakery, wellness (optical, pharmacy, and audiology) and tire center constituted approximately 5% of net merchandise sales for the year ended August 31, 2022. Across various categories, the company offers exciting and unique seasonal merchandise and rotational programs that offer unique value throughout the year. Growth Strategy The key elements of the company’s strategy are to expand real estate footprint with new clubs and distribution facilities; increase membership value; and drive incremental sales via pricesmart.com and enhanced online, digital and technological capabilities. Competition The company faces competition from various retail formats such as hypermarkets, supermarkets, convenience stores, cash and carry outlets, home improvement centers, electronic retailers and specialty stores, including those within Latin America that are owned and operated by large the U.S. and international retailers, including Walmart, Inc. in Central America and Grupo Éxito and Cencosud in Colombia. The company also faces competition from online retailers, such as Amazon.com, Inc. in Colombia. Seasonality Historically, the company’s merchandising businesses have experienced holiday retail seasonality in their markets. In addition to seasonal fluctuations, its operating results fluctuate quarter-to-quarter (year ended August 31, 2022) as a result of economic and political events in markets that it serves, the timing of holidays, weather, the timing of shipments, product mix and currency effects on the cost of the U.S.-sourced products. History PriceSmart, Inc. was incorporated in the state of Delaware in 1994.