SAN DIEGO, July 7, 2020 / PRNewswire / – PriceSmart, Inc. (NASDAQ: PSMT) today announced that for the month of june 2020 net merchandise sales fell 1.5% for $ 249.2 million of $ 253.1 million in June a year earlier. Fluctuations in exchange rates had a negative impact on net merchandise sales in $ 7.8 million or 3.1% compared to the same period of one month the previous year. There were 46 warehouse clubs in operation at the end of june 2020 and 43 warehouse clubs in operation at the end of June 2019.
For the past four weeks June 28, 2020, comparable merchandise net sales for the 41 warehouse clubs open at least 13 and a half full months were down 4.9% from the same four-week period last year. Fluctuations in exchange rates had a negative impact on the net sales of comparable merchandise of $ 7.1 million or 3.1% compared to the same period of the previous year.
Sherry S. Bahrambeygui, CEO, said:
“We have seen a sequential improvement in net merchandise sales over the past two months despite the growing impact of the global pandemic on our markets. We are facing some challenges due to government mandates related to COVID including temporary club closures, reduced number of days during the week and hours per day our clubs are allowed to be open, restrictions on segments of the population authorized to make their purchases or to circulate on certain days, and limits on the number of people authorized to be in our clubs at the same time. were the strongest in our Caribbean and Colombian markets, but central America was not as strong, especially where cases of COVID and related restrictions have become more prevalent. We estimate a total of around 70 club days lost due to closures in June, where club purchases were not allowed. However, our team has continued to adapt quickly to meet the needs of our members, having deployed our Click and Go ™ online contactless ordering and curbside pick-up service in all markets. Although we only recently launched our Click and Go ™ service, we are pleased to report that sales represented 2.7% of total net merchandise sales for the month of. june 2020. We continue to work on improving and expanding our online initiatives and optimizing our club operations to allow members to have visibility into inventory, shopping options and the ability to buy goods and services safely, quickly and efficiently. As we all work together to persevere and excel in these uncertain times, our online initiatives and our club optimizations aim to fulfill our top priority of protecting the well-being of our employees and members, while enhancing their experience. purchase.”
Cumulative fiscal year, which includes the ten months ended June 30, 2020, net merchandise sales increased 3.6% for $ 2,668.0 million of $ 2,575.9 million for the ten months ended June 30, 2019. Fluctuations in exchange rates had a negative impact on net merchandise sales in $ 42.2 million or 1.6% over the same ten-month period the previous year.
For the 43-week period ended June 28, 2020, comparable merchandise net sales were down 1.1% from the same 43-week period a year ago. Fluctuations in exchange rates had a negative impact on the net sales of comparable merchandise of $ 40.1 million or 1.6% compared to the same period of the previous year.
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 46 warehouse clubs in 12 countries and one American territory (eight in Costa Rica; seven each in Colombia and 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 is currently building and planning to open a warehouse club in Bogota, Colombia in the second quarter of fiscal 2021.
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 set 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 we are seeing 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, the proposed openings of warehouse clubs, the performance of the Company relative 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” , “Programmed”, 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: adverse changes in economic conditions in the Company’s markets, natural disasters, compliance risks, exchange rate volatility, competition, consumer and small business spending habits, political instability, increased costs associated with integrating online commerce with our traditional business, if the Company can perform successful strategic initiatives, breaches of security or privacy of member or company information, increased costs of product and service providers, disruption of supply chains, member or company information , increases in the costs of suppliers of products and services, disruption of business supply strains, factors 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 limited access ss for our members, and the shift in demand from discretionary or higher priced products to lower priced products, exposure to product liability claims and product recalls, collectability of monies owed to PriceSmart by governments, and other important factors discussed under the captions “Article 1A. Risk Factors ”and“ Section 7. Management’s Discussion and Analysis of Financial Position and Results of Operations ”in our Annual Report on Form 10-K for the year ended August 31, 2019 filed with the United States Securities and Exchange Commission (“SEC”) on October 29, 2019 and our quarterly report on Form 10-Q for the three months ended February 29, 2020 filed with the SEC on April 8, 2020. These risk factors may be updated from time to time in our other SEC filings, which are available on the SEC website at www.sec.gov. 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.