PRICESMART INC

Previous wording

PriceSmart, headquartered in San Diego, California, owns and operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, selling high quality merchandise and services at low prices to our Members. We operate 56 warehouse clubs in 12 countries and one U.S. territory (ten in Colombia; nine in Costa Rica; seven each in Panama and Guatemala; five in Dominican Republic; four each in Trinidad and El Salvador; three in Honduras; two each in Nicaragua and Jamaica; and one each in Aruba, Barbados and the United States Virgin Islands). Additionally, the Company plans to open one new warehouse club in La Romana, Dominican Republic in the spring of 2026, and one warehouse club in Montego Bay and one on South Camp Road, Jamaica in the summer and fall of 2026, respectively. Once these three new clubs are open, we will operate 59 warehouse clubs in total. Additionally, we are continuing to advance our planned expansion into Chile, which we have identified as a potential market for multiple PriceSmart warehouse clubs. Our corporate headquarters, U.S. buying operations and regional distribution centers are located primarily in the United States. Our operating segments are the United States, Central America, the Caribbean and Colombia. All intercompany balances and transactions have been eliminated in consolidation.

Current wording

PriceSmart, headquartered in San Diego, California, owns and operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, selling high-quality merchandise and services at low prices to our Members. We operate 58 warehouse clubs in 12 countries and one U.S. territory (ten each in Colombia and Costa Rica; seven each in Panama and Guatemala; six in Dominican Republic; four each in Trinidad and El Salvador; three in Honduras; two each in Jamaica and Nicaragua; and one each in Aruba, Barbados and the United States Virgin Islands). In October 2026, we opened our third club in Jamaica, located in Montego Bay. Additionally, the Company plans to open one new warehouse club in South Camp Road (Kingston), Jamaica in December 2026, one warehouse club in Villa Nueva, Guatemala in late winter of 2027, one warehouse club in Santo Tomas de Santo Domingo (Heredia), Costa Rica in spring of 2027, and one warehouse club in Comuna Las Condes, Santiago, Chile in the spring of 2027. Once these four new clubs are open, we will operate 63 warehouse clubs in total. Additionally, we are continuing to advance our planned expansion into Chile, which we believe is a promising new market for our Company. Our two regional distribution centers located in the United States (Miami) and Costa Rica operate in conjunction with our local distribution centers in all of our multi-club markets. Our corporate headquarters, U.S. buying operations, and support service center offices are located in the United States. Lastly, we have additional support service centers in some of our markets. Our operating segments are currently the United States, Central America, the Caribbean and Colombia. All intercompany balances and transactions have been eliminated in consolidation.

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 increasing our tools to drive sales and operational efficiencies. 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 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 believe 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

Our sales and profits vary from market to market depending on general economic factors, including GDP growth; consumer preferences; foreign currency exchange rates; political and social conditions; local demographic characteristics (such as population growth); the number of years we have operated in a particular market; and the level of retail and wholesale competition in that market. The economies of many of our markets are dependent on foreign trade, tourism, remittances from foreign workers located in the United States to individuals or family members in their home countries, and foreign direct investments. Uncertain economic conditions and slowdown in global economic growth and investment may impact the economies in our markets, causing significant declines in GDP and employment and devaluations of local currencies against the U.S. dollar.

Current wording

Our sales and profits vary from market to market depending on general economic factors, including Gross Domestic Product ("GDP") growth; consumer preferences; foreign currency exchange rates; political and social conditions; local demographic characteristics (such as population growth); the number of years we have operated in a particular market; and the level of retail and wholesale competition in that market. The economies of many of our markets are dependent on foreign trade, tourism, remittances from foreign workers located in the United States to individuals or family members in their home countries, and foreign direct investments. Uncertain economic conditions and slowdown in global economic growth and investment may impact the economies in our markets, causing significant declines in GDP and employment and devaluations of local currencies against the U.S. dollar.

Previous wording

Currency fluctuation can beone of the largest variables affecting our overall sales and profit performance because many of our markets are susceptible to foreign currency exchange rate volatility. For fiscal year 2025, some markets, especially Costa Rica, benefited from currency appreciation, which helped offset currency devaluations we experienced in some of the other countries. During fiscal year 2025, approximately 80.1% of our net merchandise sales were in currencies other than the U.S. dollar. Of those sales, 49.0% consisted of sales of products we purchased in U.S. dollars.

Current wording

Currency fluctuation can beone of the largest variables affecting our overall sales and profit performance because many of our markets are susceptible to foreign currency exchange rate volatility. For fiscal year 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 fiscal year 2025. During fiscal year 2026, approximately 81.2% of our net merchandise sales were in currencies other than the U.S. dollar. Of those sales, 48.7% consisted of sales of products we purchased in U.S. dollars.

Previous wording

We continue to face the risk of political instability which may have significant effects on our business. For example, protestors set up roadblocks in Panama during October and November 2023 as a reaction to an agreement between the Panamanian government and a mining company, disrupting traffic to our clubs throughout most of the market. In the third quarter of fiscal year 2025, Panama once again experienced widespread protests and social unrest against the government. Roadblocks in Guatemala in October 2023 related to election protests also limited access to certain of our warehouse clubs. Civil unrest in Colombia in response to tax reform and austerity measures paralyzed significant portions of the country’s infrastructure during the third quarter of fiscal year 2021.

Current wording

We continue to face the risk of political instability which may have significant effects on our business. For example, in the third quarter of fiscal year 2025, Panama experienced widespread protests and social unrest against the government, driven primarily by opposition to reforms of the Social Security Fund pension system.

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. 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 to the island of Jamaica, resulting in the closure of our Jamaica clubs for two days. Additionally, in August 2026, an earthquake impacted Colombia in the Pereira and Cali areas, which resulted in one of our clubs opening late and another club being closed for a day. 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

Current uncertainties about tariffs may have an adverse effect on our Company. The U.S. government has implemented significant tariff measures, including a baseline tariff of 10% on products from all countries and higher rates targeting specific countries. For additional information, see "Item 1A — Risk Factors — We are vulnerable to changes in the political and economic conditions such as tariffs and/or international trade wars and disruptions to remittances."

Current wording

Current uncertainties about U.S. tariffs and reciprocal tariffs may have an adverse effect on our Company. On February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed under the International Emergency Power Act (the "IEEPA Decision"). However, immediately following the IEEPA decision, the U.S. government initiated new tariffs under Section 122 of the Trade Act of 1974, which were statutorily limited to 150 days and expired on July 24, 2026. The U.S. government subsequently adopted additional tariff actions under Section 301 of the Trade Act of 1974, in addition to tariffs that remain in place under Section 232 and Section 301. Our Miami Distribution Center, which operates within a Free Trade Zone ("FTZ"), has helped us mitigate our exposure to tariffs, and as a result, we did not pay U.S. tariffs and are not owed a refund. In addition, our distribution centers in China allow us to ship merchandise directly from China to the countries in which we operate, bypassing the United States and thereby avoiding U.S. tariffs on such merchandise. For additional information, see "Item 1A — Risk Factors — We are vulnerable to changes in the political and economic conditions such as tariffs and/or international trade wars and disruptions to remittances."

Previous wording

In July 2025, the United States enacted significant tax legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent many provisions of the Tax Cuts and Jobs Act of 2017 and introduces additional changes affecting individuals and businesses. Key business-related provisions include the continuation of the 21% federal corporate income tax rate, enhancements to bonus depreciation and expensing rules, and modifications to certain international provisions, including Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income deductions. The OBBBA also includes other targeted measures, including a 1% excise tax on foreign remittances.

Current wording

In July 2025, the United States enacted significant tax legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent many provisions of the Tax Cuts and Jobs Act of 2017 and introduces additional changes affecting individuals and businesses. Key business-related provisions include the continuation of the 21% federal corporate income tax rate, enhancements to bonus depreciation and expensing rules, and modifications to certain international provisions, including Net CFC Tested Income and Foreign-Derived Deduction Eligible Income deductions.

Previous wording

We have reviewed the OBBBA and continue to monitor and model its potential impact on our operations and effective tax rate. Based on our current analysis of the Company's operating profile, we do not expect material effects on our 2026 fiscal year results or to our results going forward, considering our existing tax profile. Most provisions that represent substantive changes to existing law, including adjustments to international tax regimes and certain deduction limitations, are scheduled to take effect during our fiscal year 2027.

Current wording

We have reviewed the OBBBA and continue to monitor and model its potential impact on our operations and effective tax rate. The OBBBA did not have a material effect on our fiscal year 2026 results. Based on our current analysis of the Company's operating profile, we also do not expect material effects on our fiscal year 2027 results or on our results going forward, considering our existing tax profile. Most provisions that represent substantive changes to existing law, including adjustments to international tax regimes and certain deduction limitations, are scheduled to take effect during our fiscal year 2027.

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 August 31, 2025 of Trinidad dollar denominated cash and cash equivalents and short and long-term investments measured in U.S. dollarswas $59.7 million, a decrease of $40.8 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. Refer to Part II. “Item 8. Financial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 11 - Debt” for additional information.

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 August 31, 2026 of Trinidad dollar denominated cash and cash equivalents and short and long-term investments measured in U.S. dollarswas $53.8 million, a decrease of $46.7 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 and again in the third quarter of 2026, 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. Refer to Part II. “Item 8. Financial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 11 - Debt” for additional information.

Previous wording

•Net merchandise sales increased 9.2% over the comparable prior year period. We ended the quarter with 56 warehouse clubs compared to 54 warehouse clubs at the end of the fourth quarter of fiscal year 2024. Net merchandise sales - constant currency increased 9.1% over the comparable prior year period.

Current wording

•Net merchandise sales increased 13.8% over the comparable prior year period. We ended the quarter with 58 warehouse clubs compared to 56 warehouse clubs at the end of the fourth 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 greater than 13 ½ calendar months) and comparable net merchandise sales - constant currency for the 13 weeks ended August 31, 2025 increased 7.5%.

Current wording

•Comparable net merchandise sales (that is, sales in the 55 warehouse clubs that have been open for greater than 13 ½ calendar months) increased 12.2% and comparable net merchandise sales - constant currency for the 13 weeks ended August 30, 2026 increased 6.2%.

Previous wording

•Membership income for the fourth quarter of fiscal year 2025 increased 14.9% to $22.6 million over the comparable prior year period.

Current wording

•Membership income for the fourth quarter of fiscal year 2026 increased 20.3% to $27.2 million over the comparable prior year period.

Previous wording

•Total gross margins (net merchandise sales less associated cost of goods sold) increased 9.0% over the prior year period, and merchandise gross profits as a percent of net merchandise sales remained unchanged at 15.7% from the same period in the prior year.

Current wording

•Total gross margins (net merchandise sales less associated cost of goods sold) increased 14.7% over the prior year period, and merchandise gross profits as a percent of net merchandise sales increased slightly to 15.8% from 15.7% for the same period in the prior year.

Previous wording

•Operating income for the fourth quarter of fiscal year 2025 was $52.8 million, an increase of 7.2%, or $3.6 million, compared to the fourth quarter of fiscal year 2024.

Current wording

•Operating income for the fourth quarter of fiscal year 2026 was $57.0 million, an increase of 8.1%, or $4.2 million, compared to the fourth quarter of fiscal year 2025.

Previous wording

•We recorded a $6.4 million net loss in total other expense, net in the fourth quarter of fiscal year 2025 compared to a $7.4 million net loss in total other expense, net in the same period last year due to a decrease in other expense, net of $1.0 million primarily driven by a decrease in foreign currency conversion transaction costs.

Current wording

•We recorded a $6.9 million net loss in total other expense in the fourth quarter of fiscal year 2026 compared to a $6.4 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 interest expense, net of interest income, of $0.4 million, which was driven by higher average debt throughout the fourth quarter of 2026 when compared to the prior year period.

Previous wording

•Net income for the fourth quarter of fiscal year 2025 was $31.5 million, or $1.02 per diluted share, compared to $29.1 million, or $0.94 per diluted share, for the fourth quarter of fiscal year 2024.

Current wording

•Net income for the fourth quarter of fiscal year 2026 was $37.6 million, or $1.21 per diluted share, compared to $31.5 million, or $1.02 per diluted share, for the fourth quarter of fiscal year 2025.

Previous wording

•Adjusted EBITDA for the fourth quarter of fiscal year 2025 was $75.5 million compared to $70.7 million in the same period last year.

Current wording

•Adjusted EBITDA for the fourth quarter of fiscal year 2026 was $83.5 million compared to $75.5 million in the same period last year.

Previous wording

•Net merchandise sales increased 7.7% over the prior year. We ended the year with 56 warehouse clubs compared to 54 warehouse clubs at the end of fiscal year 2024. Net merchandise sales - constant currency increased 8.5% over the prior year.

Current wording

•Net merchandise sales increased 11.7% over the prior year. We ended fiscal year 2026 with 58 warehouse clubs compared to 56 warehouse clubs at the end of fiscal year 2025. Net merchandise sales - constant currency increased 8.4% over the prior year.

Previous wording

•Comparable net merchandise sales (that is, sales in the 54 warehouse clubs that have been open for greater than 13 ½ calendar months) for the 52 weeks ended August 31, 2025 increased 6.7%. Comparable net merchandise sales - constant currency for the 52 weeks ended August 31, 2025 increased 7.5%.

Current wording

•Comparable net merchandise sales (that is, sales in the 55 warehouse clubs that have been open for greater than 13 ½ calendar months) for the 52 weeks ended August 30, 2026 increased 9.6%. Comparable net merchandise sales - constant currency for the 52 weeks ended August 30, 2026 increased 6.4%.

Previous wording

•Total gross margins (net merchandise sales less associated cost of goods sold) increased 7.4% over the prior year, and merchandise gross profits as a percent of net merchandise sales decreased to 15.7% from 15.8% compared to the prior year.

Current wording

•Total gross margins (net merchandise sales less associated cost of goods sold) increased 13.4% over the prior year period, and merchandise gross profits as a percent of net merchandise sales increased to 16.0% from 15.7% in fiscal year 2025.

Previous wording

•Operating income was $232.5 million in fiscal year 2025, an increase of 5.2%, or $11.6 million, compared to fiscal year 2024.

Current wording

•Operating income was $261.0 million in fiscal year 2026, an increase of 12.3%, or $28.5 million, compared to fiscal year 2025.

Previous wording

•We recorded a $26.0 million net loss in total other expense, net in fiscal year 2025 compared to a $19.5 million net loss in total other expense, net in the prior year due to an increase in unrealized losses in value of U.S. dollar-denominated monetary assets and liabilities in several of our markets.

Current wording

•We recorded a $33.3 million net loss in total other expense in fiscal year 2026 compared to a $26.0 million net loss in total other expense in the prior year. This increase in total other expense was primarily due to an increase in other expense, net of $5.1 million, which was mainly driven by an increase in transaction costs associated with converting local currencies into available tradable currencies before converting them to U.S. dollars in some of our countries with foreign exchange liquidity issues.

Previous wording

•Net income for fiscal year 2025 was $147.9 million, or $4.82 per diluted share, compared to $138.9 million, or $4.57 per diluted share, for fiscal year 2024.

Current wording

•Net income for fiscal year 2026 was $166.6 million, or $5.40 per diluted share, compared to $147.9 million, or $4.82 per diluted share, for fiscal year 2025.

Previous wording

•Adjusted EBITDA for fiscal year 2025 was $320.7 million compared to $303.6 million in the prior year.

Current wording

•Adjusted EBITDA for fiscal year 2026 was $360.5 million compared to $320.7 million in the prior year.

Previous wording

As a multinational enterprise, we are exposed to changes in foreign currency exchange rates. The translation of the operations of our foreign-based entities from their local currencies into U.S. dollars is sensitive to changes in foreign currency exchange rates and can have a significant impact on our reported financial results. We believe that constant currency is a useful measure, indicating the actual growth of our operations. 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. Similarly, when we use the term "comparable net merchandise sales - constant currency," it means that we have translated current year comparable net merchandise sales at prior year monthly average exchange rates. Comparable net merchandise sales – constant currency results exclude the effects of foreign currency translation. Refer to “Management’s Discussion & Analysis – Net Merchandise Sales” and Refer to “Management’s Discussion & Analysis – Comparable Net Merchandise Sales” for our quantitative analysis and discussion. Reconciliations between net merchandise sales - constant currency and comparable net merchandise sales - constant currency and the most directly comparable GAAP measures are included where applicable.

Current wording

As a multinational enterprise, we are exposed to changes in foreign currency exchange rates. The translation of the operations of our foreign-based entities from their local currencies into U.S. dollars is sensitive to changes in foreign currency exchange rates and can have a significant impact on our reported financial results. We believe that constant currency is a useful measure, indicating the actual growth of our operations. 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. Similarly, when we use the term "comparable net merchandise sales - constant currency," it means that we have translated current year comparable net merchandise sales at prior year monthly average exchange rates. Comparable net merchandise sales – constant currency results exclude the effects of foreign currency translation. Refer to “Management’s Discussion & Analysis – Net Merchandise Sales” and “Management’s Discussion & Analysis – Comparable Net Merchandise Sales” for our quantitative analysis and discussion. Reconciliations between net merchandise sales - constant currency and comparable net merchandise sales - constant currency and the most directly comparable GAAP measures are included where applicable.

Previous wording

The following discussion and analysis compares the results of operations for the fiscal years ended August 31, 2025 and 2024 and should be read in conjunction with the consolidated financial statements and the accompanying notes included elsewhere in this report. For a comparison of the fiscal years ended August 31, 2024 and 2023, please see Part II. “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2024 filed with the SEC on October 30, 2024. Unless otherwise noted, all tables present U.S. dollar amounts in thousands. Certain percentages presented are calculated using actual results prior to rounding. Our operations consist of four reportable segments: Central America, the Caribbean, Colombia and the United States. The Company’s reportable segments are based on management’s organization of these locations into operating segments by general geographic location, which are used by management and the Company's chief operating decision maker in setting up management lines of responsibility, providing support services, and making operational decisions and assessments of financial performance. Segment amounts are presented after converting to U.S. dollars and consolidating eliminations. From time to time, we revise the measurement of each segment's operating income, including certain corporate overhead allocations, and other measures as determined by the information regularly reviewed by our chief operating decision maker. When we do so, the previous period amounts and balances are reclassified to conform to the current period's presentation.

Current wording

The following discussion and analysis compares the results of operations for the fiscal years ended August 31, 2026 and 2025 and should be read in conjunction with the consolidated financial statements and the accompanying notes included elsewhere in this report. For a comparison of the fiscal years ended August 31, 2025 and 2024, please see Part II. “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2025 filed with the SEC on October 30, 2025. Unless otherwise noted, all tables present U.S. dollar amounts in thousands. Certain percentages presented are calculated using actual results prior to rounding. Our operations currently consist of four reportable segments: Central America, the Caribbean, Colombia and the United States. The Company’s reportable segments are based on management’s organization of these locations into operating segments by general geographic location, which are used by management and the Company's chief operating decision maker in setting up management lines of responsibility, providing support services, and making operational decisions and assessments of financial performance. Segment amounts are presented after converting to U.S. dollars and consolidating eliminations. From time to time, we revise the measurement of each segment's operating income, including certain corporate overhead allocations, and other measures as determined by the information regularly reviewed by our chief operating decision maker. When we do so, the previous period amounts and balances are reclassified to conform to the current period's presentation.

Previous wording

Overall, net merchandise sales grew by 7.7% for fiscal year 2025 compared to fiscal year 2024, driven by a 5.9% increase in transactions and a 1.7% 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 transactions involving home delivery or curbside pickup via the Company`s Click & Go® service. Average ticket represents the amount our Members spend on each visit or PriceSmart.com order. We had 56 clubs in operation as of August 31, 2025 compared to 54 clubs as of August 31, 2024.

Current wording

Overall, net merchandise sales grew by 11.7% for fiscal year 2026 compared to fiscal year 2025, driven by a 7.2% increase in transactions and a 4.2% 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 pickups via the Company`s Click & Go® service and delivery service transactions. Average ticket represents the amount our Members spend on each visit or PriceSmart.com order. We had 58 clubs in operation as of August 31, 2026 compared to 56 clubs as of August 31, 2025.

Previous wording

Net merchandise sales in our Central America segment increased 7.5% during fiscal year 2025. This increase had a 460 basis point (4.6%) positive impact on total net merchandise sales growth. All markets within this segment had positive net merchandise sales growth for the twelve-month period ended August 31, 2025. 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 9.6% during fiscal year 2026. This increase had a 580 basis point (5.8%) positive impact on total net merchandise sales growth. All markets within this segment had positive net merchandise sales growth for the twelve-month period ended August 31, 2026. At August 31, 2026, we had 33 clubs in operations in Central America compared to 32 as of August 31, 2025.

Previous wording

Net merchandise sales in our Caribbean segment increased 6.6% during fiscal year 2025. This increase had a 180 basis point (1.8%) positive impact on total net merchandise sales growth. All of our markets in this segment had positive net merchandise sales growth.

Current wording

Net merchandise sales in our Caribbean segment increased 6.7% during fiscal year 2026. This increase had a 180 basis point (1.8%) positive impact on total net merchandise sales growth. All of our markets in this segment, except USVI, had positive net merchandise sales growth. At August 31, 2026, we had 15 clubs in operations in the Caribbean compared to 14 as of August 31, 2025.

Previous wording

Overall, the effects of currency fluctuations within our markets had an approximately$36.8 million, or 80 basis point (0.8%), negative impact on net merchandise sales for the twelve-months ended August 31,2025.

Current wording

Overall, the effects of currency fluctuations within our markets had an approximately$170.6 million, or 330 basis point (3.3%), positive impact on net merchandise sales for the twelve months ended August 31,2026.

Previous wording

Currency fluctuations had a $21.4 million, or 70 basis point (0.7%), positive impact on net merchandise sales in our Central America segment for the twelve months ended August 31, 2025. These currency fluctuations contributed approximately 40 basis points (0.4%) of positive impact on total net merchandise sales for fiscal year 2025. The Costa Rican colón appreciated against the dollar when compared to the prior year and was a significant factor in the contribution to the favorable currency fluctuations in this segment.

Current wording

Currency fluctuations had a $60.8 million, or 200 basis point (2.0%), positive impact on net merchandise sales in our Central America segment for the twelve months ended August 31, 2026. These currency fluctuations contributed approximately 120 basis points (1.2%) of positive impact on total net merchandise sales for fiscal year 2026. The Costa Rican colón appreciated against the dollar when compared to the prior year and was a significant factor in the contribution to the favorable currency fluctuations in this segment.

Previous wording

Currency fluctuations had a $24.5 million, or 180 basis point (1.8%), negative impact on net merchandise sales in our Caribbean segment for the twelve months ended August 31, 2025. These currency fluctuations contributed approximately 50 basis points (0.5%) of negative impact on total net merchandise sales growth for the current fiscal year period. This negative impact was primarily driven by the devaluation of the Dominican Peso as compared to the prior year.

Current wording

Currency fluctuations had a $3.3 million, or 20 basis point (0.2%), negative impact on net merchandise sales in our Caribbean segment for the twelve months ended August 31, 2026. These currency fluctuations contributed approximately 10 basis points (0.1%) of negative impact on total net merchandise sales growth for the current fiscal year period. This negative impact was primarily driven by the devaluation of the Dominican Peso and the Jamaican Dollar as compared to the prior year.

Previous wording

Currency fluctuations had a $33.6 million, or 620 basis point (6.2%), negative impact on net merchandise sales in our Colombia segment for the twelve months ended August 31, 2025. These currency fluctuations contributed approximately 70 basis points (0.7%) of negative impact on total net merchandise sales for the current fiscal year period.

Current wording

Currency fluctuations had a $113.1 million, or 1,870 basis point (18.7%), positive impact on net merchandise sales in our Colombia segment for the twelve months ended August 31, 2026. These currency fluctuations contributed approximately 220 basis points (2.2%) of positive impact on total net merchandise sales for the current fiscal year period. During fiscal year 2026, the Colombian peso appreciated significantly against the dollar as compared to fiscal year 2025.

Previous wording

The mix of sales by major category remained mostly steady year-over-year. Net sales of Foods & Sundries increased approximately 5% between fiscal year 2025 and 2024 but decreased by 2% as a percentage of net merchandise sales. Net sales of Fresh Foods increased approximately 12% between fiscal year 2025 and 2024 and increased by 1% as a percentage of net merchandise sales. Shifts in consumer preferences contributed to the changes in category mix.

Current wording

The mix of sales by major category remained mostly steady year-over-year. Net sales of Foods & Sundries decreased by 1% as a percentage of net merchandise sales and net sales of Fresh Foods increased by 1% as a percentage of net merchandise sales due to shifts in consumer preferences.

Previous wording

We report comparable net merchandise sales on a “same week” basis with 13 weeks in each quarter beginning on a Monday and ending on a Sunday. The periods are established at the beginning of the fiscal year to provide as close a match as possible to the calendar month and quarter that is used for financial reporting purposes. This approach equalizes the number of weekend days and weekdays in each period for improved sales comparison as we experience higher merchandise club sales on the weekends. Further, each of the warehouse clubs used in the calculations was open for at least 13 ½ calendar months before its results for the current period were compared with its results for the prior period. As a result, sales related to two of our clubs opened during fiscal year 2025 will not be used in the calculation of comparable sales until they have been open for at least 13 ½ months. Therefore, comparable net merchandise sales includes 54 warehouse clubs for the 52-week period ended August 31, 2025.

Current wording

We report comparable net merchandise sales on a “same week” basis with 13 weeks in each quarter beginning on a Monday and ending on a Sunday. The periods are established at the beginning of the fiscal year to provide as close a match as possible to the calendar month and quarter that is used for financial reporting purposes. This approach equalizes the number of weekend days and weekdays in each period for improved sales comparison as we experience higher merchandise club sales on the weekends. Further, each of the warehouse clubs used in the calculations was open for at least 13 ½ calendar months before its results for the current period were compared with its results for the prior period. As a result, sales related to one of our clubs opened during fiscal year 2025 and sales related to two of our clubs opened during fiscal year 2026 will not be used in the calculation of comparable sales until they have been open for at least 13 ½ months. Therefore, comparable net merchandise sales includes 55 warehouse clubs for the 52-week period ended August 30, 2026.

Previous wording

Comparable net merchandise sales for those warehouse clubs that were open for at least 13 ½ months for some or all of the 52-week period ended August 31, 2025 increased 6.7%.

Current wording

Comparable net merchandise sales for those warehouse clubs that were open for at least 13 ½ months for some or all of the 52-week period ended August 30, 2026 increased 9.6%.

Previous wording

Comparable net merchandise sales in our Central America segment increased 5.6% for the 52-week period ended August 31, 2025. All of our markets in Central America had positive comparable net merchandise sales growth. The positive comparable net merchandise sales growth for our Central America segment contributed approximately 340 basis points (3.4%) of positive impact in total comparable merchandise sales.

Current wording

Comparable net merchandise sales in our Central America segment increased 6.5% for the 52-week period ended August 30, 2026. All of our markets in Central America had positive comparable net merchandise sales growth. The positive comparable net merchandise sales growth for our Central America segment contributed approximately 390 basis points (3.9%) of positive impact in total comparable merchandise sales.

Previous wording

Comparable net merchandise sales in our Caribbean segment increased 7.2% for the 52-week period ended August 31, 2025. This increase contributed approximately 200 basis points (2.0%) of positive impact on total comparable net merchandise sales. Our Jamaica market continued its strong performance in the 52-week period, with 13.1% comparable net merchandise sales growth.

Current wording

Comparable net merchandise sales in our Caribbean segment increased 5.7% for the 52-week period ended August 30, 2026. This increase contributed approximately 160 basis points (1.6%) of positive impact on total comparable net merchandise sales.

Previous wording

Comparable net merchandise sales in our Colombia segment increased 11.8% for the 52-week period ended August 31, 2025. This increase contributed approximately 130 basis points (1.3%) of positive impact to the increase in total comparable net merchandise sales.

Current wording

Comparable net merchandise sales in our Colombia segment increased 35.0% for the 52-week period ended August 30, 2026. This increase contributed approximately 410 basis points (4.1%) of positive impact to the increase in total comparable net merchandise sales.