PRICESMART INC

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements concerning PriceSmart, Inc.'s ("PriceSmart", the "Company", "we" or "our") anticipated future revenues and earnings, adequacy of future cash flows, digital and technological initiatives, proposed warehouse club openings, the Company's performance relative to competitors and related matters. These forward-looking statements include, but are not limited to, statements containing the words “expect,” “believe,” “will,” “may,” “should,” “project,” “estimate,” “anticipated,” “scheduled,” “intend,” and like expressions, and the negative thereof. These statements are subject to risks and uncertainties that could cause actual results to differ materially including but not limited to the risks detailed in the Annual Report on Form 10-K for the fiscal year ended August 31, 2025 filed with the United States Securities and Exchange Commission (“SEC”) on October 30, 2025 under the heading “Part I. Item 1A. Risk Factors" and "Part I Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements, except as required by law. In addition, these risks are not the only risks that the Company faces. The Company could also be affected by additional factors that apply to all companies operating globally and in the U.S., as well as other risks that are not presently known to the Company or that the Company currently considers to be immaterial.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements concerning PriceSmart, Inc.'s ("PriceSmart", the "Company", "we" or "our") anticipated future revenues and earnings, adequacy of future cash flows, digital and technological initiatives, proposed warehouse club and distribution center openings, the Company's performance relative to competitors and related matters. These forward-looking statements include, but are not limited to, statements containing the words “expect,” “believe,” “will,” “may,” “should,” “project,” “estimate,” “anticipated,” “scheduled,” “intend,” and like expressions, and the negative thereof. These statements are subject to risks and uncertainties that could cause actual results to differ materially including but not limited to the risks detailed in the Annual Report on Form 10-K for the fiscal year ended August 31, 2025 filed with the United States Securities and Exchange Commission (“SEC”) on October 30, 2025 under the heading “Part I. Item 1A. Risk Factors" and "Part I Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements, except as required by law. In addition, these risks are not the only risks that the Company faces. The Company could also be affected by additional factors that apply to all companies operating globally and in the U.S., as well as other risks that are not presently known to the Company or that the Company currently considers to be immaterial.

Previous wording

PriceSmart is committed to improving the quality of life for people living in the communities in which it does business. Through a partnership with Price Philanthropies Foundation’s Aprender y Crecer program, we provide school supplies to approximately 140,000 children, and vision screening and eye exams for thousands of children. In addition, the PriceSmart Foundation makes grants to support youth workforce development and small business growth in PriceSmart markets.

Current wording

PriceSmart is committed to improving the quality of life for people living in the communities in which it does business. Through a partnership with Price Philanthropies Foundation we provide school supplies to approximately 140,000 children and vision screening and eye exams for thousands of children through the Aprender y Crecer program. In addition, the PriceSmart Foundation makes grants to support youth workforce development and small business growth in PriceSmart markets.

Previous wording

In the third quarter of fiscal year 2025, we purchased land for our sixth warehouse club in the Dominican Republic, located in La Romana, approximately 73 miles east from the nearest club in the capital of Santo Domingo. The club will be built on a five-acre property and is anticipated to open in the spring of 2026.

Current wording

In the third quarter of fiscal year 2025, we purchased land for our sixth warehouse club in the Dominican Republic, located in La Romana, approximately 73 miles east from the nearest club in the capital of Santo Domingo. The club will be built on a five-acre property and is anticipated to open in May 2026.

Previous wording

In the first quarter of fiscal year 2026, we purchased land for our third warehouse club in Jamaica, located in Montego Bay, approximately 100 miles west from the nearest club in the capital of Kingston. The club will be built on a five-acre property and is anticipated to open in the fall of 2026.

Current wording

In the first quarter of fiscal year 2026, we purchased land for our third warehouse club in Jamaica, located in Montego Bay, approximately 100 miles west from the nearest club in the capital of Kingston. The club will be built on a five-acre property and is anticipated to open in the summer of 2026.

Previous wording

In the second quarter of fiscal year 2026, we purchased land and plan to open our tenth warehouse club in Costa Rica, located in Ciudad Quesada, approximately 47 miles northwest from the nearest club in the capital of San Jose. The club will be built on a six-acre property and is anticipated to open in the fall of 2026.

Current wording

In the second quarter of fiscal year 2026, we purchased land and plan to open our tenth warehouse club in Costa Rica, located in Ciudad Quesada, approximately 47 miles northwest from the nearest club in the capital of San Jose. The club will be built on a six-acre property and is anticipated to open in the summer of 2026.

Previous wording

Additionally, in the first quarter of fiscal year 2026, we executed a land lease for our fourth warehouse club in Jamaica, located on South Camp Road (Kingston), approximately six miles southeast from the nearest club in the capital of Kingston. The club will be built on a three-acre property and is anticipated to open in the winter of 2026.

Current wording

In the first quarter of fiscal year 2026, we executed a land lease for our fourth warehouse club in Jamaica, located on South Camp Road (Kingston), approximately six miles southeast from the nearest club in the capital of Kingston. The club will be built on a three-acre property and is anticipated to open in the winter of 2026.

Previous wording

Once these four new clubs are open, the Company will operate 60 warehouse clubs.

Current wording

Once these five new clubs are open, the Company will operate 61 warehouse clubs.

Previous wording

We continue to pursue opportunities to add new warehouse clubs in our existing markets and to assess opportunities in new markets. We are continuing to advance our planned expansion into Chile, which we have identified as a potential market for multiple PriceSmart warehouse clubs. We have entered into executory agreements for two potential sites for two new warehouse clubs in Chile. We have hired local consultants to help us in this process. However, opening PriceSmart warehouse clubs in Chile remains subject to our continuing market analyses, finalizing the agreements of appropriate sites for warehouse clubs, and the receipt of required governmental permits, among other uncertainties.

Current wording

We continue to pursue opportunities to add new warehouse clubs in our existing markets and to assess opportunities in new markets. We are continuing to advance our planned expansion into Chile, which we have identified as a potential market for multiple PriceSmart warehouse clubs. We have entered into executory agreements for two potential sites for two new warehouse clubs in Chile. We have hired local consultants to help us in this process. However, opening PriceSmart warehouse clubs in Chile remains subject to our continuing market analyses, finalizing the agreements of appropriate sites for warehouse clubs, and the receipt of required governmental permits, among other uncertainties. As we continue to advance our land acquisition activities, we have expanded the executive leadership team and entered into a lease for office space in Chile to support these efforts.

Previous wording

Currency fluctuation can be one of the largest variables affecting our overall sales and profit performance because many of our markets are susceptible to foreign currency exchange rate volatility. In the first quarter of fiscal year 2026, some markets, primarily Colombia, benefited from currency appreciation, which was partially offset by currency devaluations we experienced in some of the other countries where we operate, primarily the Dominican Republic and Honduras, when compared to the first quarter of the prior year. During the first three months of fiscal years 2026 and 2025, approximately 80.9% and 80.0%, respectively, of our net merchandise sales were in currencies other than the U.S. dollar. Of those sales, 48.4% and 50.2% consisted of sales of products we purchased in U.S. dollars.

Current wording

Currency fluctuation can be one of the largest variables affecting our overall sales and profit performance because many of our markets are susceptible to foreign currency exchange rate volatility. As of February 28, 2026, some markets, primarily Colombia and Costa Rica, benefited from currency appreciation, which was partially offset by currency devaluations we experienced in some of the other countries where we operate, primarily Honduras, when compared to February 28, 2025. During the first six months of fiscal years 2026 and 2025, approximately 80.9% and 80.0%, respectively, of our net merchandise sales were in currencies other than the U.S. dollar. Of those sales, 48.8% and 49.6% consisted of sales of products we purchased in U.S. dollars.

Previous wording

A devaluation of local currency reduces the value of sales and membership income that is generated in that country when translated to U.S. dollars for our consolidated results. In addition, when local currency experiences devaluation, we may elect to increase the local currency price of imported merchandise to maintain our target margins, which could impact demand for the merchandise affected by the price increase. Alternatively, we may elect not to raise prices to fully cover the impact of the devaluation, adversely affecting our margins. For example, during fiscal year 2023, the currency in Colombia devalued approximately 15%, but we selectively held pricing steady or took pricing actions to mitigate declines in demand, which negatively impacted our consolidated Total gross margin percentage. We may also modify the mix of imported versus local merchandise and/or the source of imported merchandise to mitigate the impact of currency fluctuations. Information about the effect of local currency devaluations is discussed further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net Merchandise Sales and Comparable Sales.”

Current wording

A devaluation of local currency reduces the value of sales and membership income that is generated in that country when translated to U.S. dollars for our consolidated results. In addition, when a local currency experiences devaluation, we may elect to increase the local currency price of imported merchandise to maintain our target margins, which could impact demand for the merchandise affected by the price increase. Alternatively, we may elect not to raise prices to fully cover the impact of the devaluation, adversely affecting our margins. For example, during fiscal year 2023, the currency in Colombia devalued approximately 15%, but we selectively held pricing steady or took pricing actions to mitigate declines in demand, which negatively impacted our consolidated total gross margin percentage. We may also modify the mix of imported versus local merchandise and/or the source of imported merchandise to mitigate the impact of currency fluctuations. Information about the effect of local currency devaluations is discussed further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net Merchandise Sales and Comparable Sales.”

Previous wording

Our operations are subject to volatile weather conditions and natural disasters. In November 2020, Hurricanes Eta and Iota brought severe rainfall, winds, and flooding to a significant portion of Central America, especially Honduras, which caused significant damage to parts of that country’s infrastructure. In October 2025, Hurricane Melissa brought catastrophic winds, flash flooding and storm surge throughout the island of Jamaica resulting in the closure of our Jamaica clubs for two days. Although our warehouse clubs were not significantly affected and we were able to manage our supply chain to keep our warehouse clubs stocked with merchandise, similar natural disasters could adversely impact our overall sales, costs and profit performance in the future.

Current wording

Our operations are subject to volatile weather conditions and natural disasters. For example, in October 2025, Hurricane Melissa brought catastrophic winds, flash flooding and storm surge throughout the island of Jamaica resulting in the closure of our Jamaica clubs for two days. Although our warehouse clubs were not significantly affected and we were able to manage our supply chain to keep our warehouse clubs stocked with merchandise, similar natural disasters could adversely impact our overall sales, costs and profit performance in the future.

Previous wording

At times we face difficulties in the shipment of, and the risks inherent in the importation of, merchandise to our warehouse clubs. One of those difficulties is possible governmental restrictions on the importation of merchandise. In late May 2023, disputes with Nicaraguan customs and tax authorities resulted in delays in the issuance of our importation clearance, and general delays in the customs inspection process. While this situation had occurred frequently prior to May 2023, we generally were able to plan around these import blockages and resume imports within a matter of days. However, this last delay in obtaining importation clearance resulted in our being unable to import merchandise into Nicaragua for several weeks in June 2023. While our tax clearances and imports have returned to a normal cadence, we could see delays of imports into Nicaragua again as well as in other jurisdictions in which we operate.

Current wording

At times we face difficulties in the shipment of, and the risks inherent in the importation of, merchandise to our warehouse clubs. One of those difficulties is possible governmental restrictions on the importation of merchandise. In late May 2023, disputes with Nicaraguan customs and tax authorities resulted in delays in the issuance of our importation clearance, and general delays in the customs inspection process. While this situation had occurred frequently prior to May 2023, we generally were able to plan around these import blockages and resume imports within a matter of days. However, the 2023 delay in obtaining importation clearance resulted in our being unable to import merchandise into Nicaragua for several weeks in June 2023. While our tax clearances and imports have returned to a normal cadence, we could see delays of imports into Nicaragua again as well as in other jurisdictions in which we operate.

Previous wording

Our operations depend on shipping, trucking, ports and other elements of the supply chain that often rely on unionized labor. A work stoppage or other limitation on operations from union or other labor-related matters could occur for any number of reasons, including as a result of disputes under existing collective bargaining agreements with labor unions or in connection with negotiation of new collective bargaining agreements. For example, while it did not impact our export activities, we experienced a brief disruption to the flow of imported merchandise into our Miami distribution center operations because of the U.S. dockworkers strike in October 2024.

Current wording

Our operations depend on shipping, trucking, ports and other elements of the supply chain that often rely on unionized labor. A work stoppage or other limitation on operations from union or other labor-related matters could occur for any number of reasons, including as a result of disputes under existing collective bargaining agreements with labor unions or in connection with negotiation of new collective bargaining agreements. For example, while it did not impact our export activities, we experienced a brief disruption to the flow of imported merchandise into our Miami distribution center because of the U.S. dockworkers strike in October 2024.

Previous wording

From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity). This impedes our ability to convert local currencies obtained through merchandise sales into U.S. dollars to settle the U.S. dollar liabilities associated with our imported products or otherwise fund our operations. This illiquidity also increases our foreign exchange exposure to any devaluation of the local currency relative to the U.S. dollar. Additionally, the Company may incur significant premium costs to convert our local currencies into available tradable currencies and U.S. dollars. For instance, since fiscal year 2017, we have experienced this situation in Trinidad and have been unable to source a sufficient level of tradable currencies. We are working with our banks in Trinidad and government officials to convert all of our Trinidad dollars into tradable currencies. Our balance as of November 30, 2025 of Trinidad dollar denominated cash and cash equivalents and short and long-term investments measured in U.S. dollars was $80.2 million, a decrease of $20.3 million from the peak of $100.5 million as of November 30, 2020. However, as the Trinidad central bank strictly manages the exchange rate of the Trinidad dollar with the U.S. dollar and affects the level of U.S. dollar liquidity in the market through its interventions, we are subject to continued challenges in converting our Trinidad dollars to U.S. dollars, as well as being exposed to the risk of a potential devaluation of the currency. In July 2025, the Company entered into financing transactions to provide our Trinidad subsidiary with additional U.S. dollar liquidity needed to meet its operational needs and help reduce the shortfall in U.S. dollar sourcing due to continued illiquid foreign exchange conditions in that market.

Current wording

From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity). This impedes our ability to convert local currencies obtained through merchandise sales into U.S. dollars to settle the U.S. dollar liabilities associated with our imported products or otherwise fund our operations. This illiquidity also increases our foreign exchange exposure to any devaluation of the local currency relative to the U.S. dollar. Additionally, the Company may incur significant premium costs to convert our local currencies into available tradable currencies and U.S. dollars. For instance, since fiscal year 2017, we have experienced this situation in Trinidad and have been unable to source a sufficient level of tradable currencies. We are working with our banks in Trinidad and government officials to convert all of our Trinidad dollars into tradable currencies. Our balance as of February 28, 2026 of Trinidad dollar denominated cash and cash equivalents and short and long-term investments measured in U.S. dollars was $76.9 million, a decrease of $23.6 million from the peak of $100.5 million as of November 30, 2020. However, as the Trinidad central bank strictly manages the exchange rate of the Trinidad dollar with the U.S. dollar and affects the level of U.S. dollar liquidity in the market through its interventions, we are subject to continued challenges in converting our Trinidad dollars to U.S. dollars, as well as being exposed to the risk of a potential devaluation of the currency. In July 2025, the Company entered into financing transactions to provide our Trinidad subsidiary with additional U.S. dollar liquidity needed to meet its operational needs and help reduce the shortfall in U.S. dollar sourcing due to continued illiquid foreign exchange conditions in that market. While we currently expect to convert increased amounts of Trinidad dollars going forward, the timing and availability of U.S. dollars remains uncertain, and we may incur significant premium costs to complete such conversions.

Previous wording

PriceSmart's purpose is to improve the lives and businesses of our Members, our employees and our communities through the responsible delivery of the best quality goods and services at the lowest possible prices. We aim to serve as a model company, which operates profitably and provides a good return to our investors, by providing Members in emerging and developing markets with exciting, high-quality merchandise sourced from around the world and valuable services at compelling prices in safe U.S.-style clubs and through PriceSmart.com. We prioritize the well-being and safety of our Members and employees. We provide good jobs, fair wages and benefits and opportunities for advancement. We strive to treat our suppliers right and empower them when we can, including both our regional suppliers and those from around the world. We try to conduct ourselves in a socially responsible manner as we endeavor to improve the quality of the lives of our Members and their businesses, while respecting the environment and the laws of all the countries in which we operate. We also believe in facilitating philanthropic contributions to the communities in which we do business. We charge Members an annual membership fee that enables us to operate our business with lower margins than traditional retail stores. As we continue to invest in technological capabilities, we are enhancing our capabilities to drive sales, operational efficiencies, and provide a better Member experience. We believe we are well positioned to blend the excitement and appeal of our brick-and-mortar business with the convenience and additional benefits of online shopping and services, while simultaneously enhancing Member experience and engagement.

Current wording

PriceSmart's purpose is to improve the lives and businesses of our Members, our employees and our communities through the responsible delivery of the best quality goods and services at the lowest possible prices. We aim to serve as a model company, which operates profitably and provides a good return to our investors, by providing Members in emerging and developing markets with exciting, high-quality merchandise sourced from around the world and valuable services at compelling prices in safe U.S.-style clubs and through PriceSmart.com. We prioritize the well-being and safety of our Members and employees. We believe we provide good jobs, excellent wages and benefits and opportunities for advancement. We strive to treat our suppliers right and empower them when we can, including both our regional suppliers and those from around the world. We try to conduct ourselves in a socially responsible manner as we endeavor to improve the quality of the lives of our Members and their businesses, while respecting the environment and the laws of all the countries in which we operate. We also believe in facilitating philanthropic contributions to the communities in which we do business. We charge Members an annual membership fee that enables us to operate our business with lower margins than traditional retail stores. As we continue to invest in technological capabilities, we are enhancing our capabilities to drive sales, operational efficiencies, and provide a better Member experience. We believe we are well positioned to blend the excitement and appeal of our brick-and-mortar business with the convenience and additional benefits of online shopping and services, while simultaneously enhancing Member experience and engagement.

Previous wording

I. Invest in Adding New PriceSmart Locations, Expanding into New Markets, Remodeling Current PriceSmart Clubs and Opening More Distribution Centers. We continue to pursue opportunities to add new warehouse clubs in our existing markets and to assess opportunities in new markets. We have acquired land for three new warehouse clubs and entered into a land lease for a fourth new warehouse club. These warehouse clubs will be our sixth warehouse club in the Dominican Republic, our third and fourth warehouse clubs in Jamaica, and our tenth warehouse club in Costa Rica. Once these four new clubs are open, PriceSmart will operate 60 warehouse clubs in total. In addition to continued growth throughout our current markets, we are continuing to advance our planned expansion into Chile, which we have identified as a potential market for multiple PriceSmart warehouse clubs. As part of this initiative, we have hired local consultants to assist us, appointed a country general manager, and entered into executory agreements for two potential sites for two new warehouse clubs and are actively reviewing other potential sites. Additionally, we believe that one of the quickest and most effective ways to increase sales and profitability is to increase the size and efficiency of our existing warehouse clubs and the number of parking spaces at our high-volume locations. To support this strategy, we will begin warehouse club and parking lot expansions and remodels in fiscal year 2026 in Portmore, Jamaica and Barbados. During fiscal year 2024, we entered into a lease agreement to relocate and extend the lease term for our Miraflores club, which is our highest selling location in Guatemala. The new warehouse will have increased sales floor square footage and a greater number of parking spaces, along with covered parking for our Members. We expect to relocate our Miraflores club to this new location in the second half of calendar year 2027. We are enhancing our distribution and logistics network through the opening of distribution centers in China and in each of our multi-club markets, either operated by PriceSmart or through the use of third-party logistics providers. We anticipate full implementation of these distribution centers in China in the first half of fiscal year 2026. Our goal is to reduce landed costs and lead times (via direct shipments from Asia to our local markets) and improve our working capital as a result. In addition to our regional distribution center in Costa Rica, we have PriceSmart-operated distribution centers in various stages of development and implementation in other key markets. In the first quarter of fiscal year 2026, we adapted our distribution center in Panama to handle cold merchandise and began operation of a new dry distribution center in Guatemala. We plan to open distribution centers in Trinidad, Colombia and Dominican Republic during fiscal year 2026.

Current wording

I. Invest in Adding New PriceSmart Locations, Expanding into New Markets, Remodeling Current PriceSmart Clubs and Opening More Distribution Centers. We continue to pursue opportunities to add new warehouse clubs in our existing markets and to assess opportunities in new markets. We have acquired land for three new warehouse clubs and entered into land leases for two new warehouse clubs. These warehouse clubs will be our sixth warehouse club in the Dominican Republic, our third and fourth warehouse clubs in Jamaica, our tenth warehouse club in Costa Rica, and our eighth warehouse club in Guatemala. Once these five new clubs are open, PriceSmart will operate 61 warehouse clubs in total. In addition to continued growth throughout our current markets, we are continuing to advance our planned expansion into Chile, which we have identified as a potential market for multiple PriceSmart warehouse clubs. As part of this initiative, we have hired local consultants to assist us, appointed a country general manager, and entered into executory agreements for two potential sites for two new warehouse clubs and are actively reviewing other potential sites. Additionally, we believe that one of the quickest and most effective ways to increase sales and profitability is to increase the size and efficiency of our existing warehouse clubs and the number of parking spaces at our high-volume locations. To support this strategy, we will begin warehouse club and parking lot expansions and remodels in fiscal year 2026 in Portmore, Jamaica and Barbados. During fiscal year 2023, we entered into a lease agreement to relocate and extend the lease term for our Miraflores club, which is our highest selling location in Guatemala. The new warehouse will have increased sales floor square footage and a greater number of parking spaces, along with covered parking for our Members. We expect to relocate our Miraflores club to this new location in the second half of calendar year 2027. We are enhancing our distribution and logistics network through the opening of distribution centers in China and in each of our multi-club markets, either operated by PriceSmart or through the use of third-party logistics providers. We completed full implementation of these distribution centers in China in the second quarter of fiscal year 2026. Our goal is to reduce landed costs and lead times (via direct shipments from Asia to our local markets) and improve our working capital as a result. In addition to our regional distribution center in Costa Rica, we have PriceSmart-operated distribution centers in various stages of development and implementation in other key markets. In the second quarter of fiscal year 2026, we opened our distribution center in Trinidad. In addition, we plan to open distribution centers in Colombia and Jamaica during fiscal year 2026 and in the Dominican Republic during fiscal year 2027.

Previous wording

II. Increase Membership Value. At PriceSmart, we are dedicated to attracting new Members and fostering long-term loyalty by continually enhancing the value of membership. In addition to providing low prices on merchandise, we seek to provide Members with greater convenience and an expanding range of services. This includes access to PriceSmart.com for online shopping, seamless club pickup and delivery services, and our comprehensive well-being initiative. Members enjoy optical services with free eye exams, affordably priced eyeglass frames, audiology services with hearing tests, and competitively priced hearing aids. In select markets, we offer pharmacy services to further enrich the PriceSmart membership experience. We increased the membership fee by $5 in all but one market during fiscal year 2024 and may consider further adjustments as member benefits and value continue to grow. A larger membership base and higher membership fee contribute to the bottom line of the business or can be reinvested in providing better pricing to our Members. We focus on growth of our membership base, Member renewal rates and average ticket as part of determining how Members see the value we offer. A key driver of our membership strategy is the Platinum Membership, which is designed to offer even more value to our most engaged Members. Platinum Members enjoy exclusive benefits, including an annual cashback reward on eligible purchases, which directly translates to savings that reward loyalty and increase purchasing power. By offering tangible financial rewards, we believe Members can derive maximum value from their membership, particularly when paired with the PriceSmart co-branded credit card which offers an additional cash back incentive for Members with the card. Platinum Members tend to demonstrate higher renewal rates and increased spending compared to other membership tiers. Platinum Membership accounts were 19.3% of our total membership base as of November 30, 2025, an increase from 14.0% as of November 30, 2024. This directly contributes to the Company's revenue growth and reinforces our commitment to providing best-in-class value for our Members. Additionally, our private-label products that we sell under the“Member’s Selection®” brand plays a crucial role in enhancing the membership value proposition. We believe these products, available only at PriceSmart, deliver superior value while maintaining the high standards that our Members expect. Sourced with care and designed to meet everyday needs,“Member’s Selection®” products range from pantry staples to household essentials, providing affordable alternatives without compromising on quality. During the first three months of fiscal year 2026, our private-label sales represented 27.0% of total net merchandise sales, down slightly from 27.7% in the same period of fiscal year 2025, and we plan to continue to invest in the development of additional private label products under the“Member’s Selection®” brand. In …

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Current wording

II. Increase Membership Value. At PriceSmart, we are dedicated to attracting new Members and fostering long-term loyalty by continually enhancing the value of membership. In addition to providing low prices on merchandise, we seek to provide Members with greater convenience and an expanding range of services. This includes access to PriceSmart.com for online shopping, seamless club pickup and delivery services, and our comprehensive well-being initiative. Members enjoy optical services with free eye exams, affordably priced eyeglass frames, audiology services with hearing tests, and competitively priced hearing aids. In select markets, we offer pharmacy services to further enrich the PriceSmart membership experience. We increased the membership fee by $5 in all but one market during fiscal year 2024 and may consider further adjustments as member benefits and value continue to grow. A larger membership base and higher membership fee contribute to the bottom line of the business or can be reinvested in providing better pricing to our Members. We focus on growth of our membership base, Member renewal rates and average ticket as part of determining how Members see the value we offer. A key driver of our membership strategy is the Platinum Membership, which is designed to offer even more value to our most engaged Members. Platinum Members enjoy exclusive benefits, including an annual cashback reward on eligible purchases, which directly translates to savings that reward loyalty and increase purchasing power. By offering tangible financial rewards, we believe Members can derive maximum value from their membership, particularly when paired with the PriceSmart co-branded credit card which offers an additional cash back incentive for Members with the card. Platinum Members tend to demonstrate higher renewal rates and increased spending compared to other membership tiers. Platinum Membership accounts were 19.5% of our total membership base as of February 28, 2026, an increase from 14.5% as of February 28, 2025. This directly contributes to the Company's revenue growth and reinforces our commitment to providing best-in-class value for our Members. Additionally, our private-label products that we sell under the “Member’s Selection®” brand plays a crucial role in enhancing the membership value proposition. We believe these products, available only at PriceSmart, deliver superior value while maintaining the high standards that our Members expect. Sourced with care and designed to meet everyday needs, “Member’s Selection®” products range from pantry staples to household essentials, providing affordable alternatives without compromising on quality. During the first six months of fiscal year 2026, our private-label sales represented 26.6% of total net merchandise sales, down slightly from 27.4% in the same period of fiscal year 2025. In the first quarter of fiscal year 2026, the Company discontinued selling produce under the “Member’s Selection®” brand as we dete…

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Previous wording

III. Drive Incremental Sales via PriceSmart.com and Enhanced Digital and Technological Capabilities. We’ve continued to tailor our digital experience to try to exceed our Members` expectations of how, when and where they want to shop. In the first quarter of fiscal year 2026, our digital channel sales reached $89.8 million, a 29.4% increase year-over-year, representing 6.6% of total net merchandise sales. We’re also modernizing our processes and technology. For example, we have continued making progress in our migration to the RELEX software platform in the first quarter of fiscal year 2026. We expect to complete our implementation in fiscal year 2026. We believe this upgrade enhances employee productivity and is designed to improve inventory management, reduce spoilage and increase in-stock availability, driving both sales and efficiency. In addition, during the first quarter of fiscal year 2026, we finalized implementing a new point-of-sale system, Elera, a Toshiba product, in all of our English-speaking markets in the Caribbean. In the second quarter of fiscal year 2026, we expect to begin implementation in our Spanish speaking Central American markets. We believe with Elera we can achieve faster checkout times, improve employee productivity and enhance our payment option capabilities. In the first quarter of fiscal year 2026, we began implementing Workday's human capital management system to replace legacy human resource applications. This upgrade is designed to enhance the employee experience with modern, user-friendly tools, while improving processes, strengthening compliance and providing scalable, integrated data to support future growth. During the first quarter, we advanced our multi-phase implementation of the E2Open Global Trade Management platform designed to enhance automation, compliance, and controls across global import and export operations. We believe this platform will strengthen trade compliance, improve data visibility, and support scalable international growth once fully implemented. Lastly, during fiscal year 2026, we will begin migrating our mobile application to fully native iOS and Android architectures to enhance speed, reliability, and accessibility for our Members. We believe this will shorten the release cycles and deepen integration with our composable commerce stack. Solidifying our foundation and allowing for faster deployment of new features will help us achieve our mission of delivering an outstanding shopping experience while leveraging costs down.

Current wording

III. Drive Incremental Sales via PriceSmart.com and Enhanced Digital and Technological Capabilities. We’ve continued to tailor our digital experience to try to exceed our Members` expectations of how, when and where they want to shop. In the second quarter of fiscal year 2026, our digital channel sales reached $94.1 million, a 23.4% increase year-over-year, representing 6.4% of total net merchandise sales. We’re also modernizing our processes and technology. For example, we have continued making progress in our migration to the RELEX supply chain and inventory management software platform in the second quarter of fiscal year 2026. We expect to complete our implementation in fiscal year 2026. We believe this upgrade enhances employee productivity and is designed to improve inventory management, reduce spoilage and increase in-stock availability, driving both sales and efficiency. In addition, during the first quarter of fiscal year 2026, we finalized implementing a new point-of-sale system, Elera, a Toshiba product, in all of our English-speaking markets in the Caribbean. In the third quarter of fiscal year 2026, we expect to begin implementation in our Spanish speaking Central American markets. We believe with Elera we can achieve faster checkout times, improve employee productivity and enhance our payment option capabilities. In the second quarter of fiscal year 2026, we furthered implementation of Workday's human capital management system to replace legacy human resource applications. This upgrade is designed to enhance the employee experience with modern, user-friendly tools, while improving processes, strengthening compliance and providing scalable, integrated data to support future growth. During the second quarter, we advanced our multi-phase implementation of the E2Open Global Trade Management platform designed to enhance automation, compliance, and controls across global import and export operations. We believe this platform will strengthen trade compliance, improve data visibility, and support scalable international growth once fully implemented. Lastly, in the second quarter of fiscal year 2026, we began migrating our mobile application to fully native iOS and Android architectures to enhance speed, reliability, and accessibility for our Members. Solidifying our foundation and allowing for faster deployment of new features will help us achieve our mission of delivering an outstanding shopping experience while leveraging costs down.

Previous wording

Financial highlights for the first quarter of fiscal year 2026 included:

Current wording

Financial highlights for the second quarter of fiscal year 2026 included:

Previous wording

•Net merchandise sales increased 10.6% over the comparable prior year period. We ended the quarter with 56 warehouse clubs compared to 54 warehouse clubs at the end of the first quarter of fiscal year 2025. Net merchandise sales - constant currency increased 9.5% over the comparable prior-year period.

Current wording

•Net merchandise sales increased 9.9% over the comparable prior year period. We ended the quarter with 56 warehouse clubs compared to 54 warehouse clubs at the end of the second quarter of fiscal year 2025. Net merchandise sales - constant currency increased 7.8% over the comparable prior-year period.

Previous wording

•Comparable net merchandise sales (that is, sales in the 54 warehouse clubs that have been open for more than 13 ½ calendar months) for the 13 weeks ended November 30, 2025 increased 8.0%. Comparable net merchandise sales - constant currency for the 13 weeks ended November 30, 2025 increased 6.9%.

Current wording

•Comparable net merchandise sales (that is, sales in the 54 warehouse clubs that have been open for more than 13 ½ calendar months) for the 13 weeks ended March 1, 2026 increased 7.6%. Comparable net merchandise sales - constant currency for the 13 weeks ended March 1, 2026 increased 5.5%.

Previous wording

•Membership income for the first quarter of fiscal year 2026 increased 15.9% to $23.4 million over the comparable prior-year period.

Current wording

•Membership income for the second quarter of fiscal year 2026 increased 16.9% to $24.5 million over the comparable prior-year period.

Previous wording

•Total gross margins (net merchandise sales less associated cost of goods sold) increased 11.2% over the prior year period, and merchandise gross profits as a percent of net merchandise sales remained unchanged at 15.9% when compared to the same period in the prior year.

Current wording

•Total gross margins (net merchandise sales less associated cost of goods sold) increased 13.5% over the prior year period, and merchandise gross profit as a percent of net merchandise sales was 16.1%, an increase of 50 basis points when compared to the same period in the prior year.

Previous wording

•Operating income for the first quarter of fiscal year 2026 was $62.9 million, an increase of 8.0%, or $4.7 million, compared to the first quarter of fiscal year 2025.

Current wording

•Operating income for the second quarter of fiscal year 2026 was $75.4 million, an increase of 15.6%, or $10.2 million, compared to the second quarter of fiscal year 2025.

Previous wording

•Our effective tax rate increased in the first quarter of fiscal year 2026 to 27.9% from 26.5% in the first quarter of fiscal year 2025. The increase in the effective tax rate is primarily attributable to non-recurring items, primarily from a tax contingency accrual and foreign exchange rate fluctuations.

Current wording

•Our effective tax rate decreased in the second quarter of fiscal year 2026 to 26.4% from 27.2% in the second quarter of fiscal year 2025. The decrease in the effective tax rate is primarily attributable to foreign exchange rate fluctuations.

Previous wording

•Net income for the first quarter of fiscal year 2026 was $40.2 million, or $1.29 per diluted share, compared to $37.4 million, or $1.21 per diluted share, in the first quarter of fiscal year 2025.

Current wording

•Net income for the second quarter of fiscal year 2026 was $49.1 million, or $1.62 per diluted share, compared to $43.8 million, or $1.45 per diluted share, in the second quarter of fiscal year 2025.

Previous wording

•Selling, general and administrative expenses increased 12.9% compared to the first quarter of fiscal year 2025, primarily due to investments in technology and compensation of our Chief Executive Officer. Selling, general and administrative expenses as a percentage of total revenues in the first quarter of fiscal year 2026 increased to 13.1% from 12.8% in the same period last year.

Current wording

•Selling, general and administrative expenses increased 12.7% compared to the first six months of fiscal year 2025, primarily due to investments in technology and compensation of our Chief Executive Officer. Selling, general and administrative expenses as a percentage of total revenues in the first six months of fiscal year 2026 increased to 12.9% from 12.6% in the same period last year.

Previous wording

•We recorded a $7.2 million net loss in total other expense in the first quarter of fiscal year 2026 compared to a $7.3 million net loss in total other expense in the same period last year.

Current wording

•We recorded a $16.0 million net loss in total other expense in the first six months of fiscal year 2026 compared to a $12.4 million net loss in total other expense in the same period last year. This increase in total other expense was primarily due to an increase in other expense, net of $2.0 million, which was mainly driven by an increase in unrealized losses in value of U.S. dollar denominated monetary assets and liabilities in several of our markets.

Previous wording

(1)Primarily consists of transaction costs of converting the local currencies into available tradable currencies in some of our countries with liquidity issues and foreign currency losses or gains due to the revaluation of monetary assets and liabilities (primarily U.S. dollars) for the three months ended November 30, 2025 and 2024.

Current wording

(1)Primarily consists of transaction costs of converting the local currencies into available tradable currencies in some of our countries with liquidity issues and foreign currency losses or gains due to the revaluation of monetary assets and liabilities (primarily U.S. dollars) for the three and six months ended February 28, 2026 and 2025.

Previous wording

COMPARISON OF THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024

Current wording

COMPARISON OF THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2026 AND 2025

Previous wording

The following discussion and analysis compares the results of operations for the three-month period ended on November 30, 2025 with the three-month period ended on November 30, 2024 and should be read in conjunction with the consolidated financial statements and the accompanying notes included elsewhere in this report. Unless otherwise noted, all tables present U.S. dollar amounts in thousands. Certain percentages presented are calculated using actual results prior to rounding.

Current wording

The following discussion and analysis compares the results of operations for the three- and six-month periods ended on February 28, 2026 with the three- and six-month periods ended on February 28, 2025 and should be read in conjunction with the consolidated financial statements and the accompanying notes included elsewhere in this report. Unless otherwise noted, all tables present U.S. dollar amounts in thousands. Certain percentages presented are calculated using actual results prior to rounding.

Previous wording

The following tables indicate the net merchandise club sales in the reportable segments in which we operate and the percentage growth in net merchandise sales by segment during the three months ended November 30, 2025 and November 30, 2024:

Current wording

The following tables indicate the net merchandise club sales in the reportable segments in which we operate and the percentage growth in net merchandise sales by segment during the three and six months ended February 28, 2026 and February 28, 2025:

Previous wording

Comparison of Three Months Ended November 30, 2025 and 2024

Current wording

Comparison of Three and Six Months Ended February 28, 2026 and 2025

Previous wording

Overall, Net merchandise sales grew by 10.6% for the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025. The first quarter increase resulted from an 8.4% increase in transactions and a 2.1% increase in average ticket. Transactions represent the total number of visits our Members make to our warehouse clubs resulting in a sale and the total number of PriceSmart.com curbside pickup via our Click & Go® service and delivery service transactions. Average ticket represents the amount our Members spend on each visit or PriceSmart.com order. We had 56 clubs in operation as of November 30, 2025 compared to 54 clubs as of November 30, 2024.

Current wording

Overall, total net merchandise sales grew by 9.9% for the second quarter of fiscal year 2026 and grew 10.2% for the six-month period ended February 28, 2026. The second quarter increase resulted from a 7.5% increase in transactions and a 2.2% increase in average ticket. For the six-month period, the increase resulted from a 7.9% increase in transactions and a 2.1% increase in average ticket. Transactions represent the total number of visits our Members make to our warehouse clubs resulting in a sale and the total number of PriceSmart.com curbside pickup via our Click & Go® service and delivery service transactions. Average ticket represents the amount our Members spend on each visit or PriceSmart.com order. We had 56 clubs in operation as of February 28, 2026 compared to 54 clubs as of February 28, 2025.

Previous wording

Net merchandise sales in our Central America segment increased 9.6% during the first quarter. This increase had a 580 basis points (5.8%) positive impact on total net merchandise sales growth for the first quarter. All markets within this segment had positive net merchandise sales growth for the quarter ended. We opened our ninth warehouse club in Costa Rica in April 2025 and our seventh warehouse club in Guatemala in August 2025.

Current wording

Net merchandise sales in our Central America segment increased 8.6% and 9.1%, respectively, during the second quarter and the six months ended February 28, 2026. This increase had a 520 basis point (5.2%) and 550 basis point (5.5%) positive impact on total net merchandise sales growth for the second quarter and the six months ended February 28, 2026. All markets within this segment, except Honduras, had positive net merchandise sales growth for the second quarter. All markets within this segment had positive net merchandise sales growth for the six months ended February 28, 2026. We opened our ninth warehouse club in Costa Rica in April 2025 and our seventh warehouse club in Guatemala in August 2025.

Previous wording

Net merchandise sales in our Caribbean segment increased 5.7% during the first quarter. This increase had a 160 basis points (1.6%) positive impact on total net merchandise sales growth for the first quarter. All markets within this segment had positive net merchandise sales growth.

Current wording

Net merchandise sales in our Caribbean segment increased 4.3% and 5.0%, respectively, during the second quarter and the six months ended February 28, 2026. These increases had a 120 basis point (1.2%) and 140 basis point (1.4%) positive impact on total net merchandise sales growth for the second quarter and the six months ended February 28, 2026. All markets within this segment, except USVI, had positive net merchandise sales growth for the second quarter and the six months ended February 28, 2026.

Previous wording

The following table indicates the impact that currency exchange rates had on our net merchandise sales in dollars and the percentage change from the three month period ended November 30, 2025. When we use the term "net merchandise sales - constant currency," it means that we have translated current year net merchandise sales at prior year monthly average exchange rates. Net merchandise sales - constant currency results exclude the effects of foreign currency translation. Impact of foreign currency is the effect of currency fluctuations on our net merchandise sales.

Current wording

The following table indicates the impact that currency exchange rates had on our net merchandise sales in dollars and the percentage change from the three- and six-month periods ended February 28, 2026. When we use the term "net merchandise sales - constant currency," it means that we have translated current year net merchandise sales at prior year monthly average exchange rates. Net merchandise sales - constant currency results exclude the effects of foreign currency translation. Impact of foreign currency is the effect of currency fluctuations on our net merchandise sales.

Previous wording

Overall, the effects of currency fluctuations within our markets had approximately $13.8 million, or 110 basis points (1.1%), positive impact on net merchandise sales for the three months ended November 30, 2025.

Current wording

Overall, the effects of currency fluctuations within our markets had approximately $27.7 million and $41.5 million, or 210 basis points (2.1%) and 160 basis points (1.6%), of positive impact on net merchandise sales for the quarter and the six months ended February 28, 2026, respectively.

Previous wording

Currency fluctuations had $3.1 million, or 40 basis points (0.4%), of positive impact on net merchandise sales in our Central America segment for the three months ended November 30, 2025. These currency fluctuations contributed approximately 30 basis points (0.3%) of positive impact on net merchandise sales for the three months ended November 30, 2025. The Costa Rican colón appreciated against the dollar as compared to the same three month period a year ago and was a significant factor in the contribution to the favorable currency fluctuations in this segment.

Current wording

Currency fluctuations had a $6.0 million and $9.1 million, or 80 basis points (0.8%) and 60 basis points (0.6%), of positive impact on net merchandise sales in our Central America segment for the quarter and the six months ended February 28, 2026, respectively. These currency fluctuations contributed approximately 50 basis points (0.5%) and 30 basis points (0.3%) of positive impact on net merchandise sales for the quarter and the six months ended February 28, 2026, respectively. The Costa Rican colón appreciated against the dollar as compared to the same three- and six-month periods a year ago and was a significant factor in the contribution to the favorable currency fluctuations in this segment.

Previous wording

Currency fluctuations had $7.0 million, or 210 basis points (2.1%), of negative impact on net merchandise sales in our Caribbean segment for the three months ended November 30, 2025. These currency fluctuations contributed approximately 60 basis points (0.6%) of negative impact on total net merchandise sales growth for the three months ended November 30, 2025. The negative impact was primarily driven by the devaluation of the Dominican peso as compared to the same three month period a year ago.

Current wording

Currency fluctuations had a $3.9 million and $10.9 million, or 100 basis points (1.0%) and 150 basis points (1.5%), of negative impact on net merchandise sales in our Caribbean segment for the quarter and the six months ended February 28, 2026, respectively. These currency fluctuations contributed approximately 30 basis points (0.3%) and 40 basis points (0.4%) of negative impact on total net merchandise sales growth for the quarter and the six months ended February 28, 2026, respectively. The negative impact was primarily driven by the devaluation of the Dominican peso as compared to the same three- and six-month periods a year ago.