PriceSmart Reports April Net Merchandise Sales
SAN DIEGO, May 7, 2021 / PRNewswire / – PriceSmart, Inc. (NASDAQ: PSMT) today announced that April net merchandise sales rose 22.0% to $ 263.4 million of $ 216.0 million in April a year earlier. Exchange rate fluctuations negatively impacted net merchandise sales by 1.6%, or $ 3.4 million, compared to the same period of one month the previous year. There were 47 warehouse clubs in operation at the end of April 2021 and 45 warehouse clubs in operation at the end of april 2020.
For the past four weeks April 25, 2021, comparable merchandise net sales for the 45 warehouse clubs open at least 13 and a half months increased 25.3% from the same period last year. Fluctuations in exchange rates negatively impacted comparable merchandise net sales by 1.7%, or $ 3.4 million, compared to the same period of the previous year.
Sherry S. Bahrambeygui, CEO, said:
“Our membership base and 12-month renewal rate are growing rapidly from their respective recent lows in August 2020, moving past April of last year and almost returning to their pre-COVID peaks, in part thanks to our online capabilities.
“As we now face the second year of the pandemic and despite continuing restrictions in various markets, our total and comparable sales have increased in April 2021, 22.0% and 25.3%, respectively, compared to April of last year.
“Demand in our non-food categories in April, particularly electronics and apparel, continued to grow. Our global merchandising team efficiently found in-demand items at excellent prices and in appropriate quantities to maintain a strong inventory on hand. The return of additional club capacity in some of our markets positively impacted our foodservice sales during the month.
“We believe that our concept is not only sustainable, it has the potential for growth in good times as well as stressful times like these. Additionally, with the continued strengthening of our omnichannel capabilities and deeper data on our member preferences, we see opportunities to deliver greater value to our members. Our entire team of over 10,000 associates continues to deliver strong results despite ongoing challenges while ensuring the safety of our employees and members.
The 12-month renewal rate is 86.1% for the closed period April 30, 2021, an increase from the 12-month renewal rates of 81.5% and 80.5% for completed periods February 28, 2021 and August 31, 2020, respectively.
Cumulative fiscal year, which includes the eight months ended April 30, 2021, net merchandise sales increased by 6.2% for $ 2,307.8 million of $ 2,172.5 million for the eight months ended April 30, 2020. Exchange rate fluctuations negatively impacted net merchandise sales by 2.9% or $ 62.4 million compared to the same eight-month period the previous year.
For the 34 week period ended April 25, 2021, comparable merchandise net sales increased 3.3% from the same 34-week period a year ago. Fluctuations in exchange rates negatively impacted comparable merchandise net sales by 2.9% or $ 60.6 million compared to the same period of the previous year.
Monthly sales reporting
The company will cease reporting its monthly sales after its sales publication in May on or about June 7, 2021 at the end of the third quarter of fiscal 2021. This is in line with current industry practices and the vast majority of the Company’s retail peers. The Company believes that aligning its sales reports with the disclosure of our quarterly financial results provides better context for the overall financial performance of the Company.
PriceSmart, headquartered at San Diego, owns and operates American-style commercial warehouse clubs in Latin America and the Caribbean, selling high quality goods and services at low prices to PriceSmart members. PriceSmart operates 47 warehouse clubs in 12 countries and one American territory (eight in Costa Rica and Colombia; seven in Panama; five in the Dominican Republic, four in Trinity and Guatemala; three in Honduras; two each in El Salvador and Nicaragua; and one each in Aruba, Barbados, Jamaica and the US Virgin Islands). The Company also plans to open new warehouse clubs in Guatemala City, Guatemala and Bucaramanga, Colombia in the fall of 2021, and in Portmore, Jamaica in spring 2022. Once these three new clubs are open, the Company will operate 50 warehouse clubs.
The Company reports comparable merchandise net sales on a “same week” basis with 13 weeks in each quarter starting on a Monday and ending on a Sunday. Periods are established at the start of the fiscal year to provide as close a match as possible to the calendar month and quarter which are used for financial reporting purposes. This approach equalizes the number of weekend days and weekdays in each period for a better sales comparison, as the company has higher merchandise club sales on weekends. Each of the warehouse clubs used in the calculations has been open for at least 13 and a half calendar months before its results for the current period are compared with its results for the previous period.
The term “exchange rate” refers to the exchange rates the Company uses to convert net sales of merchandise and net sales of comparable merchandise for all countries where the functional currency is not the US dollar into US dollars. The Company calculates the effect of changes in exchange rates as the difference between current period operations converted using current period exchange rates and comparable period last year exchange rates. The Company believes that disclosure of the effects of currency fluctuations on the Company’s results provides investors with a better understanding of the underlying performance of the Company.
This press release may contain forward-looking statements regarding the anticipated future income and profits of the Company, the adequacy of future cash flows, omnichannel initiatives, proposals to open warehouse clubs, the performance of the Company by compared to its competitors, the outcome of tax proceedings and related matters. These forward-looking statements include, without limitation, statements containing the words “expect”, “believe”, “will”, “may”, “should”, “plan”, “estimate”, “anticipate” , “Planned”, “intend” and similar expressions, and the negative thereof. These statements are subject to risks and uncertainties which could cause actual results to differ materially, including, but not limited to without limitation: adverse changes in economic conditions in the Company’s markets, natural disasters, compliance risks, exchange rate volatility and the illiquidity of certain local currencies in our markets, competition, spending habits of consumers and small businesses, political instability, increased costs associated with integrating online commerce with our traditional businesses, if the Company can successfully execute strategic initiatives. es, cybersecurity breaches that could disrupt our systems or compromise the security of member or company information, cost increases for product and service providers, disruption of supply chains, drivers and challenges related to COVID-19, including, among others, the duration of the pandemic, the unknown long-term economic impact, the impact of government policies and restrictions that have access limits for our members, and changing demand discretionary or more expensive products to cheaper products, exposure to product liability claims and product recalls, collectability of money owed to PriceSmart by governments, and other important factors discussed in the Risk Factors section of the Company’s most recent annual report on Form 10-K, and other factors discussed from time to time in other filings s with the SEC, which are accessible on the SEC’s website at www.sec.gov, including quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements speak only as of the date on which they are made and the Company does not undertake to update them, except as required by law.
For more information, please contact Michael L. McCleary, EVP, Chief Financial Officer and Principal Accounting Officer (858) 404-8826 or send an email to [email protected].
SOURCE PriceSmart, Inc.