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What changed in PRICESMART INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PRICESMART INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+426 added−436 removedSource: 10-K (2025-10-30) vs 10-K (2024-10-30)

Top changes in PRICESMART INC's 2025 10-K

426 paragraphs added · 436 removed · 315 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

60 edited+47 added−33 removed13 unchanged
Biggest changeRecent examples of enhancements we have made to the value of membership include: providing the ability for all of our Members to transact on PriceSmart.com; pickup and delivery service in our clubs; and the implementation and expansion of our Well-being initiative, which offers optical services with free eye exams for our Members and additional members of their families and lower prices on discounted eyeglass frames, audiology services with free hearing exams and deeply discounted hearing aids, and, in some of our markets, pharmacies.
Biggest changeThis 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, pharmacy services further enrich the PriceSmart membership experience.
However, we do face competition from various retail formats such as hypermarkets, supermarkets, convenience stores, cash and carry outlets, home improvement centers, electronic retailers and specialty stores, including those within Latin America that are owned and operated by large U.S. and international retailers, including Walmart, Inc. in Central America and Grupo Éxito and Cencosud in Colombia.
However, we do face competition from various retail formats such as hypermarkets, supermarkets, convenience stores, cash and carry outlets, home improvement centers, electronic retailers and specialty stores, including those within Latin America that are owned and operated by large U.S. and international retailers, including Walmart, Inc. in Central America and Grupo Éxito in Colombia and Cencosud in South America.
We believe that operating our business at the highest standards, providing outstanding jobs for our employees and being good stewards of the communities in which we operate result in PriceSmart being a good investment for our stockholders. 1 Table of Contents The number of warehouse clubs for each country or territory were as follows : Country/Territory Number of Warehouse Clubs in Operation as of August 31, 2023 Number of Warehouse Clubs in Operation as of August 31, 2024 Anticipated Warehouse Club Openings in Fiscal Year 2025 Colombia 9 10 — Costa Rica 8 8 1 Panama 7 7 — Guatemala 5 6 1 Dominican Republic 5 5 — Trinidad 4 4 — El Salvador 3 4 — Honduras 3 3 — Nicaragua 2 2 — Jamaica 2 2 — Aruba 1 1 — Barbados 1 1 — U.S.
We believe that operating our business at the highest standards, providing outstanding jobs for our employees and being good stewards of the communities in which we operate result in PriceSmart being a good investment for our stockholders. 1 Table of Contents The number of warehouse clubs for each country or territory were as follows : Country/Territory (1) Number of Warehouse Clubs in Operation as of August 31, 2024 Number of Warehouse Clubs in Operation as of August 31, 2025 Anticipated Warehouse Club Openings in Fiscal Year 2026 Anticipated Warehouse Club Openings in Fiscal Year 2027 Colombia 10 10 — — Costa Rica 8 9 — — Panama 7 7 — — Guatemala 6 7 — — Dominican Republic 5 5 1 — Trinidad 4 4 — — El Salvador 4 4 — — Honduras 3 3 — — Nicaragua 2 2 — — Jamaica 2 2 1 1 Aruba 1 1 — — Barbados 1 1 — — U.S.
Data we can access about our Members not only provides better connectivity with our Members, but also enables us to identify and pursue additional opportunities to provide value for our Members. Membership has been a basic operating characteristic in the warehouse club industry, beginning over 48 years ago at Price Club, the first membership warehouse club business.
Data we can access about our Members not only provides better connectivity with our Members, but also enables us to identify and pursue additional opportunities to provide value for our Members. Membership has been a basic operating characteristic in the warehouse club industry, beginning over 49 years ago at Price Club, the first membership warehouse club business.
Item 1. Business General PriceSmart was founded in 1996 by Sol and Robert Price, the creators of Price Club, the original warehouse club operator. The mission of PriceSmart is to operate its warehouse club business in Central America, the Caribbean and Colombia at operating standards as good as, or superior to, warehouse club operations in the United States.
Item 1. Business General PriceSmart was founded in 1996 by Sol and Robert Price, the creators of Price Club, the original warehouse club operator. The mission of PriceSmart is to operate its warehouse club business in Central America, the Caribbean and South America at operating standards as good as, or superior to, warehouse club operations in the United States.
PriceSmart's Membership Policy We offer three types of memberships: Diamond, Business and Platinum. The Diamond Membership is targeted at individuals and families. The annual fee for a Diamond Membership (entitling Members to two cards), in most markets as of August 31, 2024 was approximately $40 (excluding tax).
PriceSmart's Membership Policy We offer three types of memberships: Diamond, Business and Platinum. The Diamond Membership is targeted at individuals and families. The annual fee for a Diamond Membership (entitling Members to two cards), in most markets as of August 31, 2025 was approximately $40 (excluding tax).
While we believe that our trademarks, copyrights and other proprietary know how have significant value, changing technology and the competitive marketplace make our future success dependent principally upon our employees’ technical competence and creative skills for continuing innovation. Our Competition Our international merchandising business competes with a wide range of international, regional, national and local retailers, and traditional wholesale distributors.
While we believe that our trademarks, copyrights and other proprietary know-how have significant value, changing technology and the competitive marketplace make our future success dependent principally upon our employees’ technical competence and creative skills for continuing innovation. 6 Table of Contents Our Competition Our international merchandising business competes with a wide range of international, regional, national and local retailers, and traditional wholesale distributors.
In most markets, our Business Members pay an annual membership fee of approximately $40, or approximately $80 for Business Platinum, for a primary and secondary membership card and approximately $15 for additional add-on membership cards. Only businesses can qualify for a Business Membership, which permits up to three additional members.
In most markets, our Business Members pay an annual membership fee of approximately $40, or approximately $80 for Business Platinum, for a primary and secondary membership card and approximately $10 or $15 for additional add-on membership cards based on membership type. Only businesses can qualify for a Business Membership, which permits up to three additional members.
Our SEC reports can be accessed through the investor relations section of our website under “SEC Filings.” Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.
Securities and Exchange Commission (SEC). Our SEC reports can be accessed through the investor relations section of our website under “SEC Filings.” Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.
We also face competition from online retailers, such as AmazonGlobal and Mercado Libre in Colombia, and last-mile delivery services that serve our markets, and we expect that this type of competition will grow and intensify in the future.
We also face competition from online retailers, such as AmazonGlobal and Mercado Libre in South America, and last-mile delivery services that serve our markets, and we expect that this type of competition will grow and intensify in the future.
We attempt to protect our trade secrets and other proprietary information through agreements with our employees, consultants and suppliers. There can be no assurance, however, that we will be successful in protecting our proprietary rights.
We attempt to protect our trade secrets and other proprietary information through confidentiality and non-disclosure agreements with our employees, consultants and suppliers. There can be no assurance, however, that we will be successful in protecting our proprietary rights.
Lastly, we face competition from wholesalers selling food and/or general merchandise, which more directly competes with our business-to-business sales. 7 Table of Contents Human Capital As of August 31, 2024, we had approximately 12,000 employees. Approximately 96% of our employees were employed outside of the United States, and about 1,900 employees were represented by labor unions.
Lastly, we face competition from wholesalers selling food and/or general merchandise, which more directly competes with our business-to-business sales. 7 Table of Contents Human Capital As of August 31, 2025, we had over 12,000 employees. Approximately 96% of our employees were employed outside of the United States, and about 1,750 employees were represented by labor unions.
We offer merchandise and services in the following categories: • Consumables, consisting primarily of groceries, cleaning supplies, and health and beauty aids, representing approximately 49% of our net merchandise sales; • Fresh Foods, including meat, produce, deli, seafood and poultry, representing approximately 30% of our net merchandise sales; • Hardlines, including electronics, large and small appliances, automotive, hardware, sporting goods, and seasonal products, representing approximately 11% of our net merchandise sales; • Softlines, including clothing, domestics and home furnishing products, representing approximately 5% of our net merchandise sales; • Food Service and Bakery, representing approximately 4% of our net merchandise sales; and • Health Services, including optical, audiology and pharmacy, representing approximately 1% of our net merchandise sales.
We offer merchandise and services in the following categories: • Consumables, consisting primarily of groceries, cleaning supplies, and health and beauty aids, representing approximately 47% of our net merchandise sales; • Fresh Foods, including meat, produce, deli, seafood and poultry, representing approximately 31% of our net merchandise sales; • Hardlines, including electronics, large and small appliances, automotive, hardware, sporting goods, and seasonal products, representing approximately 11% of our net merchandise sales; • Softlines, including clothing, domestics and home furnishing products, representing approximately 6% of our net merchandise sales; • Food Service and Bakery, representing approximately 4% of our net merchandise sales; and • Health Services, including optical, audiology and pharmacy, representing approximately 1% of our net merchandise sales.
Our focus on lowering operating costs supports better value and lower prices for our Members, which we believe helps generate Member loyalty and renewals, which in turn leads to increased sales. Membership. Our membership provides a competitive advantage. Membership targets a desirable demographic with strong purchasing power.
Our focus on lowering operating costs helps us provide better value and lower prices to our Members, which we believe helps generate Member loyalty and renewals, which in turn leads to increased sales. Membership. Our membership provides a competitive advantage. Membership targets a desirable demographic with strong purchasing power.
As our location sales volumes have grown, we have routed more products from international, regional and local suppliers to regional and local distribution centers in order to improve in-stocks, reduce inventory weeks of supply, reduce logistics costs and improve working capital.
Regional and in-country suppliers have shipped directly to our locations. As our location sales volumes have grown, we have routed more products from international, regional and local suppliers to regional and local distribution centers in order to improve in-stocks, reduce inventory weeks of supply, reduce logistics costs and improve working capital.
These new distribution centers are part of our strategy to streamline a portion of our logistics network and, together with our plans to implement origin consolidation, we believe we will be able to lower freight costs, reduce transit time, and improve working capital by accelerating our sales conversion cycle in fiscal year 2025.
These distribution centers are part of our strategy to streamline a portion of our logistics network and, together with our plans to implement origin consolidation, we believe we will be able to lower freight costs, reduce transit time, and improve working capital by accelerating our sales conversion cycle.
More recently, we also have opened distribution centers in certain of our high-volume markets to improve efficiency and in-stock rate, reduce lead times on high volume products, and mitigate risks of supply chain disruption.
More recently, we also have opened distribution centers in all of our multi-club markets to improve efficiency and in-stock rate, reduce lead times on high volume products, and mitigate risks of supply chain disruption.
In October 2023, we relocated our distribution center in Panama City, Panama to an approximately 120,000 square foot leased building that serves as a distribution center for our warehouse clubs in Panama. This distribution center operates in a similar way to our distribution center in Costa Rica.
In Panama City, Panama we have an approximately 120,000 square foot leased building that serves as a distribution center for our warehouse clubs in Panama. This distribution center operates in a similar way to our distribution center in Costa Rica.
Members can sign-up and renew their memberships as well as choose auto-renewal online. We recognize membership income over the 12-month term of the membership. Deferred membership income was $36.2 million and $31.1 million as of August 31, 2024 and August 31, 2023, respectively.
Members can sign-up and renew their memberships as well as choose auto-renewal online. We recognize membership income over the 12-month term of the membership. Deferred membership income was $41.7 million and $36.2 million as of August 31, 2025 and August 31, 2024, respectively.
We will make available our annual report on Form 10-K and our annual Proxy Statement for the fiscal year 2024 at the internet address https://materials.proxyvote.com/741511 as soon as reasonably practicable after electronically filing such material with or furnishing it to the SEC.
We will make available our annual report on Form 10-K and our annual proxy statement for the 2026 annual meeting of stockholders at the internet address https://materials.proxyvote.com/741511 as soon as reasonably practicable after electronically filing such material with or furnishing it to the SEC.
We believe that our future success is highly dependent on our capacity to continue to adapt and innovate to meet the needs of our current and future Members. We also have developed better inbound and outbound online communication channels, and we are using data analytics to better understand our Members’ evolving preferences. Experienced Management Team. Robert E.
We believe that our future success is highly dependent on our capacity to continue to adapt and innovate to meet the needs of our current and future Members. We also have improved our inbound and outbound online communication channels, and we are using data analytics to better understand our Members’ evolving preferences.
On this website we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, and the annual report to the stockholders as soon as reasonably practicable after electronically filing such material with or furnishing it to the U.S. Securities and Exchange Commission (SEC).
On this website we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, the proxy statements for our annual meetings of stockholders and the annual report to the stockholders as soon as reasonably practicable after electronically filing such material with or furnishing it to the U.S.
We believe membership promotes Member loyalty, and membership fees contribute to our ability to operate our business on lower margins than conventional retailers and wholesalers. Membership fees were equal to approximately 1.6% of net merchandise sales and 34.1% of operating income in fiscal year 2024.
We believe membership promotes Member loyalty, and membership fees contribute to our ability to operate our business on lower margins than conventional retailers and wholesalers. Membership fees were equal to approximately 1.7% of net merchandise sales and 36.8% of operating income in fiscal year 2025.
We also historically exported products to a retailer in the Philippines, but effective August 31, 2024, our business relationship with that retailer ceased, except for some outstanding merchandise orders to be fulfilled in fiscal year 2025.
We also historically exported products to a retailer in the Philippines, but effective August 31, 2024, our business relationship with that retailer ceased, except for $11.9 million of outstanding merchandise orders fulfilled during fiscal year 2025.
We seek to provide safe and pleasant working environments for our employees, along with excellent pay and benefits, including healthcare and retirement benefits. PriceSmart is committed to improving the quality of life for people living in the communities in which it does business.
We seek to be an outstanding place to work and provide safe and pleasant working environments for our over 12,000 employees, along with excellent pay and benefits, including healthcare coverage and retirement benefits. PriceSmart is committed to improving the quality of life for people living in the communities in which it does business.
Other Information PriceSmart, Inc. was incorporated in the State of Delaware in 1994. Our principal executive offices are located at 9740 Scranton Road, San Diego, California 92121. Our telephone number is (858) 404-8800. Our website home page on the internet is www.pricesmart.com.
Other Information PriceSmart, Inc. was incorporated in the State of Delaware in 1994. Our principal executive offices are located at 9797 Aero Drive, Suite 100, San Diego, California 92123. Our telephone number is (858) 404-8800. Our website home page on the internet is www.pricesmart.com.
However, we are exploring expansion of our export business in other markets and recently began exporting to a retailer in the Bahamas. 2 Table of Contents Merchandising A fundamental part of our value proposition is making available to our retail and business Members a selection of high-quality merchandise and services sourced within our region and from around the world, at lower prices than our competitors.
We recently began exporting to a retailer in the Bahamas and may export to other countries if opportunities that complement our business model arise. 2 Table of Contents Merchandising A fundamental part of our value proposition is making available to our retail and business Members a selection of high-quality merchandise and services sourced within our region and from around the world, at lower prices than our competitors.
In fiscal year 2024, our private label sales represented 27.6% of total merchandise sales, up from 26.3% for fiscal year 2023, and we plan to continue to invest in the development of additional private label products under the “ Member’s Selection ® ” brand. 5 Table of Contents III.
In fiscal year 2025, our private label sales represented 28.1% of total merchandise sales, up from 27.6% for fiscal year 2024, and we plan to continue to invest in the development of additional private label products under the “ Member’s Selection ® ” brand.
Platinum Members can apply this rebate to future purchases at the warehouse club at the end of the annual membership period. The rebate is issued annually to Platinum Members on March 1 and expires August 31.
Platinum Members can apply this rebate to future purchases at the warehouse club at the end of the annual membership period. The rebate is issued annually to Platinum Members on March 1 and expires August 31. Any rebate amount not redeemed by August 31 is recognized as breakage revenue.
Their experience and knowledge represent a key strength and competitive advantage for our Company. 4 Table of Contents Growth As we look to the future, our Company is focused on three major drivers of growth: • Invest in Remodeling Current PriceSmart Clubs, Adding New PriceSmart Locations and Opening More Distribution Centers • Increase Membership Value • Drive Incremental Sales via PriceSmart.com and Enhanced Online, Digital and Technological Capabilities I.
Growth As we look to the future, our Company is focused on three major drivers of growth: • Invest in Adding New PriceSmart Locations, Expanding into New Markets, Remodeling Current PriceSmart Clubs and Opening More Distribution Centers • Increase Membership Value • Drive Incremental Sales via PriceSmart.com and Enhanced Digital and Technological Capabilities I.
Approximately 49% of our sales come from merchandise sourced in the U.S., Asia and Europe. One of the primary advantages we have compared to most of our local competitors is our United States-based buying team that sources merchandise from suppliers in the U.S. and around the world.
We believe one of the primary advantages we have compared to most of our local competitors is our buying team, based both in the United States and in our markets, which sources merchandise from suppliers in the U.S. and around the world.
Invest in Remodeling Current PriceSmart Clubs, Adding New PriceSmart Locations and Opening More Distribution Centers. 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.
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.
In partnership with Price Philanthropies Foundation, PriceSmart provides school supplies to approximately 150,000 children, and eye exams to thousands of children through its Aprender y Crecer program. In addition, the newly created PriceSmart Foundation makes grants to support work force development, small business entrepreneurship and to improve the environment.
In partnership with Price Philanthropies Foundation, PriceSmart provides school supplies to approximately 140,000 children, and eye exams to 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.
Our buyers identify and purchase new and exciting items, including our own “ Member’s Selection ® ” private label products. Many of these products are available only at PriceSmart in the markets in which we operate. 3 Table of Contents Innovation. The warehouse club industry has been operating for almost 50 years, following the founding of Price Club in 1976.
Our buyers identify and purchase new and exciting items, including our own “ Member’s Selection ® ” private label products. Many of these products are available only at PriceSmart in the markets in which we operate. 3 Table of Contents Continuous Improvement.
We compete in a variety of ways, including the prices at which we sell our merchandise, merchandise selection and availability, services offered to customers, location, store hours, shopping convenience and the overall shopping experience we offer. We also prioritize above all the safety of our Members and our employees.
We compete in a variety of ways, including the prices at which we sell our merchandise, merchandise selection and availability, services offered to customers, location, store hours, shopping convenience and the overall shopping experience we offer. Some of our competitors have greater resources, buying power and name recognition.
Some of our competitors may have greater resources, buying power and name recognition. In the countries in which we operate, we do not currently face direct competition from U.S. membership warehouse club operators.
In the countries in which we operate and in Chile, we do not currently face direct competition from U.S. membership warehouse club operators.
Any rebate amount not redeemed by August 31 is recognized as breakage revenue. 6 Table of Contents We promote our Business and Business Platinum Memberships by offering certain merchandise targeted primarily to businesses such as restaurants, hotels, convenience stores, offices and institutions.
We promote our Business and Business Platinum Memberships by offering certain merchandise targeted primarily to businesses such as restaurants, hotels, convenience stores, offices and institutions.
The club will be built on a six-acre property and is anticipated to open in the spring of 2025. Additionally, we expect to formalize a land lease in the first quarter of fiscal year 2025 and build our seventh warehouse club in Guatemala, located in Quetzaltenango, approximately 122 miles west from the nearest club in the capital of Guatemala City.
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, 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 fall of 2026.
We believe that untapped opportunities exist to enhance the value of our membership further in various areas. We continue to explore opportunities to provide our Members with products and services that are particularly attractive to our unique membership base. Business Members. Our product selection, larger pack sizes, and low prices appeal to both business and retail consumers.
As of August 31, 2025, we had 55 optical locations, 22 pharmacies and 30 audiology locations open. We believe that untapped opportunities exist to enhance the value of our membership further in various areas. We continue to explore opportunities to provide our Members with products and services that are particularly attractive to our unique membership base. Business Members.
We are also currently expanding our clubs in San Salvador, El Salvador and Portmore, Jamaica. 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.
To support this strategy, we will begin warehouse club and parking lot expansions and remodels in fiscal year 2026 at select clubs. 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.
PriceSmart provides online shopping to our Members and offers both home delivery and curbside pickup. PriceSmart is making significant investments in technology to both improve the online shopping experience for its Members and to enhance operating efficiencies in its supply chain and the back office. PriceSmart seeks to provide the best working conditions possible for our almost 12,000 employees.
PriceSmart is making significant investments in technology to both improve the digital shopping experience for its Members and to enhance operating efficiencies in its supply chain and the back office.
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 also completed the purchase of the land and building for our Via Brasil club in Panama, which we previously leased.
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 first 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 expect to reduce landed costs and lead times (via direct shipments from Asia to our local markets) and improve our working capital.
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.
As benefits grow and the value of being a PriceSmart Member increases, adjustments to the membership fee may be warranted. We increased this fee by $5 in all but one market on a staggered basis in fiscal year 2024.
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.
With nearly two million membership accounts and almost four million cardholders, we believe PriceSmart is an essential part of the shopping experience for consumers and small businesses in PriceSmart’s markets. PriceSmart sources slightly more than half its merchandise from suppliers within the region, with the balance of merchandise sourced throughout the rest of the world.
We believe PriceSmart has become one of the most respected and trusted brands in the countries where we operate and with over two million membership accounts, and almost four million cardholders, we believe PriceSmart is an essential part of the shopping experience for consumers and small businesses in PriceSmart’s markets.
Business Members include a broad cross section of businesses such as restaurants, institutions, and other businesses that purchase products for resale and supplies used in their businesses. These business Members represent a significant source of sales and profit and provide purchasing volume that gives us better prices from our suppliers. Worldwide Sourcing.
Our product selection, larger pack sizes, and low prices appeal to both business and retail consumers. Business Members include a broad cross section of businesses such as restaurants, institutions, and other businesses that purchase products for resale and supplies used in their businesses.
Our ability to move products efficiently and in a timely manner from the suppliers to our Members is key to the cost structure of our business and, consequentially, to how low we can price our products for our Members.
Our ability to move products efficiently and in a timely manner from the suppliers to our Members is key to the cost structure of our business and, consequentially, to how low we can price our products for our Members. 5 Table of Contents Historically, our international suppliers and especially our U.S. suppliers have generally shipped their products to our Miami distribution facility, which operates within a Free Trade Zone, where the products are received and assigned to various containers for direct shipment to our locations.
The information on our website is not incorporated by reference in this Annual Report on Form 10-K. 8 Table of Contents Available Information The PriceSmart, Inc. investor relations website or internet address is https://investors.pricesmart.com.
Other trademarks, service marks or trade names referred to in this Annual Report are the property of their respective owners. 9 Table of Contents Available Information The PriceSmart, Inc. investor relations website or internet address is https://investors.pricesmart.com.
Product selection includes basic consumable merchandise for consumers and businesses, “ Member’s Selection ® ” private label merchandise and unique consumable and non-consumable products that are often not otherwise available in our markets. PriceSmart continually focuses on innovation. In recent years, PriceSmart has added optical, audiology, and pharmacy services in many of its locations.
PriceSmart sources approximately half of its merchandise from suppliers within Latin America and the Caribbean, with the balance of merchandise sourced throughout the rest of the world. Product selection includes basic consumable merchandise for consumers and businesses, “ Member’s Selection ® ” private label merchandise and consumable and non-consumable products that are often not otherwise available in our markets.
In addition to promoting knowledge sharing, they empower our employees to grow personally and professionally, fostering an inclusive environment where we celebrate unique perspectives and strengthen our organizational culture. Seasonality Historically, our merchandising businesses have experienced holiday retail seasonality in their markets.
The activities we facilitate do more than bring employees together. They create platforms for celebrating our diversity, enriching our experiences, and fueling our shared journey toward success. In addition to promoting knowledge sharing, we believe they empower our employees to grow personally and professionally, fostering an inclusive environment where we celebrate unique perspectives and strengthen our organizational culture.
Virgin Islands 1 1 — Totals 51 54 2 Our warehouse clubs, one regional distribution center and several smaller local distribution centers are located in Latin America and the Caribbean, and our corporate headquarters, U.S. buying operations and our larger regional distribution center are located i n the United States.
Our distribution centers, including two regional distribution centers, which are located in the United States (Miami) and Costa Rica, operate in conjunction with our local distribution centers in all of our multi-club markets throughout Latin America and the Caribbean. Our corporate headquarters, U.S. buying operations and support service center offices are located i n the United States.
Developing a Diverse Workforce Representative of Our Markets Fundamental to our mission is the ability to attract, retain, and develop a diverse workforce representative of the countries in which we operate.
Developing a Diverse Workforce Representative of Our Markets At the heart of our mission is the conviction that our success depends on people, their talent, their diversity, and their ability to thrive. We are committed to attracting, developing, and retaining a workforce that reflects the rich cultural and social fabric of the countries in which we operate.
We provided specialized training in developing a “member-centric mindset” to over 2,100 employees, as well as courses on emotional intelligence and psychological safety.
In fiscal year 2025, we conducted more than 2,100 corporate talent development sessions, including general leadership training. We provided specialized training to over 2,500 employees on developing a “Member-centric mindset,” along with courses on emotional intelligence and overcoming unconscious bias.
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 spend per Member as part of determining how Members see our value.
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.
The world of merchandising has evolved during this period, particularly with respect to how technology impacts operational efficiencies and how consumers shop. We are leveraging technological innovations we have developed to enhance our worldwide sourcing of products and make these products available in our countries in a manner that meets current consumer preferences.
The warehouse club industry has been operating for over 49 years, following the founding of Price Club in 1976. The world of merchandising has evolved during this period, particularly with respect to how technology impacts operational efficiencies and how consumers shop.
This club will be built on a four-acre property and is anticipated to open in the summer of 2025. Once these two new clubs are open, we will operate 56 warehouse clubs in total.
We have acquired land for two new warehouse clubs and entered into a land lease for a third new warehouse club. These warehouse clubs will be our sixth warehouse club in the Dominican Republic and our third and fourth warehouse clubs in Jamaica. Once these three new clubs are open, PriceSmart will operate 59 warehouse clubs in total.
In addition to our regional distribution center in Costa Rica, we have PriceSmart-operated distribution centers in various stages of development and implementation in markets such as Panama, Guatemala, and Trinidad. II. Increase Membership Value. We are seeking to attract more Members and retain our current Members by expanding the benefits of being a Member of PriceSmart.
We expect 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.
The Via Brasil club had the highest sales volume in our Panama market during fiscal year 2024. We continue to pursue opportunities to add new warehouse clubs in our existing markets and to assess opportunities in new markets.
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.
Our operating segments are the United States, Central America, the Caribbean and Colombia. We have purchased land and plan to open our ninth warehouse club in Costa Rica, located in Cartago, approximately 10 miles east from the nearest club in the capital of San Jose.
Lastly, we have additional support service centers in some of our markets. Our operating segments are the United States, Central America, the Caribbean and Colombia.
We also send company-wide communications to celebrate events that recognize diversity and cultural heritage and educate team members about the history and significance of these events. The activities we facilitate do more than bring employees together. They create platforms for celebrating our diversity, enriching our experiences, and fueling our shared journey toward success.
We also send company-wide messages to highlight events that honor diversity and cultural heritage and to educate team members about their history and importance. We also recognize the role of communication and transparency in employee engagement.
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As of August 31, 2024 , we had 54 warehouse clubs in operation in Central America, the Caribbean and Colombia. We believe PriceSmart has become one of the most respected and trusted brands in the region.
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As of August 31, 2025 , we had 56 warehouse clubs in operation in Central America, the Caribbean and Colombia. In addition, we are continuing to advance our planned expansion into Chile, which we believe is a promising new market for our business model.
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As of August 31, 2024, we had 53 optical locations, 14 pharmacies and 29 audiology locations open. We expect to continue the rollout of audiology in fiscal year 2025. In addition, we expect to have pharmacies in substantially all clubs in Costa Rica, Panama and Guatemala by the end of fiscal year 2025.
Added
PriceSmart continually focuses on innovation. In recent years, PriceSmart has added optical, audiology, and pharmacy services in many of its locations. Beyond in-club shopping, our Members can shop via our mobile app or online at PriceSmart.com, both of which offer home delivery and curbside pickup via its Click & Go® service.
Removed
Price has served as PriceSmart's Interim Chief Executive Officer since February 2023 and has been Chairman of the Board of Directors of the Company since its spin-off from Price Enterprises, Inc. in 1997. He served as Executive Chairman from October 2018 to February 2020. Mr.
Added
Virgin Islands 1 1 — — Totals 54 56 2 1 (1) In July 2025, the Company announced its plans to expand into Chile. Our member-facing warehouse clubs are all located in Latin America and the Caribbean.
Removed
Price has served as Chief Executive Officer and President of the Company at various times during the Company’s history, including as Chief Executive Officer from April 2006 until July 2010. Mr.
Added
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.
Removed
Price was a founder of The Price Company, which operated the Price Club, and served as its Chief Executive Officer and a member of its board of directors from the time of The Price Company’s founding in 1976. John D. Hildebrandt became our Chief Operating Officer in May 2022 and our President in December 2022.
Added
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.
Removed
He previously served as the Company’s Executive Vice President – Operations since February 2010. Before that office, Mr. Hildebrandt held various management positions with the Company dating back to 1997. Mr. Hildebrandt was a Senior Operations Manager of Price/Costco from 1994 through 1996 and served in various management roles for The Price Company beginning in 1979. Michael L.
Added
Once these three new clubs are open, we will operate 59 warehouse clubs in total. 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.
Removed
McCleary is Executive Vice President and Chief Financial Officer. Mr. McCleary joined the Company in 2003 and has over 30 years of international finance, tax and accounting experience. David N. Price was elected as a director of the Company in February 2022.
Added
As part of this initiative, we have appointed a country general manager and entered into an executory agreement for a potential site for a new warehouse club in Chile. We have hired local consultants to help us in this process.
Removed
He has been with the Company since July 2017 and was promoted to Executive Vice President and Chief Transformation Officer in July 2023. Mr. Price leads several important areas, including Information Technology, PriceSmart.com, and Payment Solutions and Services.
Added
However, opening PriceSmart warehouse clubs in Chile remains subject to our finding appropriate sites for warehouse clubs and distribution facilities, the results of our continuing market analyses and the receipt of required governmental permits, among other uncertainties.
Removed
Prior to his current role, he was the Executive Vice President and Chief of Staff to the Chairman of the Board and the Company's Interim Chief Executive Officer, Robert Price, from December 2022 to July 2023. Between August 2021 and December 2022, Mr. Price served as Vice President for Environmental and Social Responsibility.
Added
These Business Members represent a significant source of sales and profit and provide purchasing volume that gives us better prices from our suppliers. Worldwide Sourcing. Approximately 49% of our sales come from merchandise sourced in the U.S., Asia and Europe.
Removed
Before that, he was Vice President for Omnichannel Initiatives and Environmental and Social Responsibility. From August 2018 to August 2020, Mr. Price worked as a Director in our E-Commerce division. He holds a Master's degree in International Affairs from the University of California San Diego and a Bachelor of Science from the University of Southern California.
Added
We are leveraging technology to enhance our buying process to more efficiently source merchandise and procure products in a manner that meets current and ever-evolving member preferences.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

96 edited+32 added−18 removed96 unchanged
Biggest changeDollar 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. 21 Table of Contents Additionally, during fiscal year 2023, the Honduran Central Bank began limiting the availability and controlling the allocation of U.S. dollars for the conversion from Honduran lempiras to U.S. dollars.
Biggest changeHowever, 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.
For example, the Colombian peso exchange rate with the U.S. dollar devalued approximately 15% on average throughout fiscal year 2023 compared to fiscal year 2022, reducing our U.S. dollar value of sales and negatively affecting overall demand for our merchandise in Colombia during that year.
For example, the Colombian peso exchange rate with the U.S. dollar devalued approximately 15% on average throughout fiscal year 2023 compared to fiscal year 2022, reducing the U.S. dollar value of our sales and negatively affecting overall demand for our merchandise in Colombia during that year.
We receive, retain, and transmit personal information about our Members and employees and entrust that information to third-party business associates, including cloud service-providers that perform activities for us. In addition, we and our third-party service providers store and maintain health-related personal information, pharmacy, and medical records in connection with our health and wellness and pharmacy businesses.
We receive, retain, and transmit personal information about our Members and employees, and we entrust that information to third-party business associates, including cloud service-providers that perform activities for us. In addition, we and our third-party service providers store and maintain health-related personal information, pharmacy, and medical records in connection with our health and wellness and pharmacy businesses.
Each year, computer hackers, cyber terrorists, and others make numerous attempts to access the information stored in companies’ information systems. The increased use of remote work infrastructure has also increased cybersecurity risk, as remote work continues even post COVID-19.
Each year, computer hackers, cyber terrorists, and others make numerous attempts to access the information stored in companies’ information systems. The use of remote work infrastructure has also increased cybersecurity risk, as remote work continues even post-COVID-19.
Additionally, the rapid evolution of artificial intelligence and integration of machine learning technologies into our internal systems may intensify our cybersecurity risks and create new risks to our business, operations, and financial condition. The use of data by our business and our business associates is regulated in all of our operating countries.
Additionally, the rapid evolution of artificial intelligence and the integration of machine learning technologies into our internal systems may intensify our cybersecurity risks and create new risks to our business, operations, and financial condition. The use of data by our business and our business associates is regulated in all our operating countries.
Moreover, a security breach could require us to devote significant management resources to address the problems created by the security breach and to expend significant additional resources to upgrade further the security measures that we employ to guard such important personal information against cyberattacks and other attempts to access such information, resulting in a disruption of our operations.
Moreover, a security breach could require us to devote significant management resources to address the problems created by the security breach and to expend significant additional resources to further upgrade the security measures that we employ to guard such important personal information against cyberattacks and other attempts to access such information, resulting in a disruption of our operations.
However, we do face competition from various retail formats such as hypermarkets, supermarkets, cash and carry outlets, home improvement centers, electronic retailers and specialty stores, including those within Latin America that are owned and operated by large U.S. and international retailers, including Walmart Inc. in Central America and Grupo Éxito and Cencosud in Colombia.
However, we do face competition from various retail formats such as hypermarkets, supermarkets, cash and carry outlets, home improvement centers, electronic retailers and specialty stores, including those within Latin America that are owned and operated by large U.S. and international retailers, including Walmart Inc. in Central America and Grupo Éxito in Colombia and Cencosud in South America.
We have noted that certain retailers are making investments in upgrading their locations or opening of new stores which may result in increased competition. Further, it is possible that other warehouse club operators may decide to enter our markets and compete more directly with us in a similar warehouse club format.
We have noted that certain retailers are making investments in upgrading their locations or opening new stores which may result in increased competition. Further, it is possible that other warehouse club operators may decide to enter our markets and compete more directly with us in a similar warehouse club format.
In recent years, multiple domestic and international tax proposals were proposed to impose greater tax burdens on large multinational enterprises. For example, the Organisation for Economic Co-operation and Development ("OECD") continues to advance proposals or guidance in international taxation, including the establishment of a global minimum tax.
In recent years, multiple domestic and international tax proposals were proposed to impose greater tax burdens on large multinational enterprises. For example, the Organisation for Economic Co-operation and Development continues to advance proposals or guidance in international taxation, including the establishment of a global minimum tax.
While major international online retailers have not established a significant penetration in any of our markets, AmazonGlobal continues to expand its online marketplace and ships into most of our markets. However, other regional online retailers, such as MercadoLibre, have continued to increase their presence in our markets.
While major international online retailers have not established a significant penetration in any of our markets, AmazonGlobal continues to expand its online marketplace and ships into most of our markets, and other regional online retailers, such as MercadoLibre, have continued to increase their presence in our markets.
In order to mitigate the significant price increase to our Members that would be required to maintain our target margins, we absorbed the increase in the costs of goods resulting from the devaluation and we took pricing actions on certain product categories that reduced our Total gross margin during that period until the exchange rate normalized and we were able to return to a more normalized margin profit.
In order to mitigate the significant price increase to our Members that would be required to maintain our target margins, we absorbed some of the increase in the costs of goods resulting from the devaluation and took pricing actions on certain product categories, which reduced our Total gross margin during that period until the exchange rate normalized and we were able to return to a more normalized profit margin.
Our computer systems, including back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, internal or external security breaches, catastrophic events such as fires, earthquakes, tornadoes and hurricanes, and errors by our employees. Our information systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities.
Our computer systems, including back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, catastrophic events such as fires, earthquakes, tornadoes and hurricanes, and errors by our employees. Our information systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities.
We have experienced these limitations in Colombia, primarily in Bogotá, and in some of our other existing markets, which has negatively affected our growth rates in those markets. Limitations on the availability of appropriate sites for new warehouse clubs in the areas targeted by us could have a material adverse effect on the future growth of PriceSmart.
We have experienced these limitations in Colombia, primarily in Bogotá, and in some of our other existing markets, which has negatively affected our growth rates in those markets. Limitations on the availability of appropriate sites for new warehouse clubs and distribution facilities in the areas targeted by us could have a material adverse effect on the future growth of PriceSmart.
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.
Additionally, we 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.
Additionally, the potential problems and interruptions associated with implementing technology initiatives could disrupt or reduce the efficiency of our operations in the short term. These initiatives might not provide the anticipated benefits or may provide them on a delayed schedule or at a higher cost.
Additionally, the potential problems and interruptions associated with implementing technology initiatives could disrupt or reduce the efficiency of our operations in the short term. These initiatives might not deliver the anticipated benefits, or they may provide them on a delayed schedule or at a higher cost.
Pursuant to these indemnification obligations, during fiscal year 2023, we wrote off approximately $700,000 of accounts receivable from Aeropost to fully settle claims from Aeropost’s acquiror alleging that we breached representations and warranties regarding cybersecurity matters and worker classification. Failure to attract and retain qualified employees could materially adversely affect our financial performance.
Pursuant to these indemnification obligations, during fiscal year 2023, we wrote off approximately $700,000 of accounts receivable from Aeropost to fully settle claims from Aeropost’s acquiror alleging that we breached representations and warranties regarding cybersecurity matters and worker classification. 20 Table of Contents Failure to attract and retain qualified employees could materially adversely affect our financial performance.
Error or malfeasance by our employees and consultants, faulty password management or other irregularities may result in a defeat of our or our third-party service providers’ security measures and breach our or our third-party service providers’ information systems (whether digital or otherwise).
Error or malfeasance by our employees or consultants, faulty password management, or other irregularities may result in the defeat of our or our third-party service providers' security measures and a breach of our or our third-party service providers` information systems (whether digital or otherwise).
Our financial performance is subject to risks inherent in operating and expanding our international membership warehouse club business, which include: • changes in, and inconsistent enforcement of, laws and regulations, including those related to tariffs and taxes; • the imposition of foreign and domestic governmental controls, including expropriation risks; • natural disasters; • trade restrictions, including import-export quotas and general restrictions on importation; • difficulty and costs associated with international sales and the administration of an international merchandising business; • crime and security concerns that can adversely affect the economies of the countries in which we operate and which require us to incur additional costs to provide additional security at our warehouse clubs; • political instability, such as anti-government protests in Panama and Guatemala in 2023 and civil unrest in Colombia in 2022 and 2021; • product registration, permitting and regulatory compliance; • volatility in foreign currency exchange rates; • limitations on our ability to convert foreign currencies; • general economic and business conditions; • pandemics; and • interruption of our supply chain.
Our financial performance is subject to risks inherent in operating and expanding our international membership warehouse club business, which include: • changes in, and inconsistent enforcement of, laws and regulations, including those related to tariffs and taxes; • the imposition of foreign and domestic governmental controls, including expropriation risks; • natural disasters; • trade restrictions, including import-export quotas and general restrictions on importation; • difficulty and costs associated with international sales and the administration of an international merchandising business; • crime and security concerns that can adversely affect the economies of the countries in which we operate and which require us to incur additional costs to provide additional security at our warehouse clubs; • political instability, such as civil unrest in Panama during the third quarter of fiscal year 2025 and in Colombia in 2022 and 2021 as well as anti-government protests in Panama and Guatemala in 2023; • product registration, permitting and regulatory compliance; • volatility in foreign currency exchange rates; • limitations on our ability to convert foreign currencies; • general economic and business conditions; • pandemics; and • interruption of our supply chain.
Also, accidents or personal injuries that sometimes occur in our facilities, such as a Member slipping and falling or injuries caused by product falling from a rack, could result in negative publicity or otherwise damage the Company's reputation. 15 Table of Contents We face the risk of exposure to product liability claims, a product recall and adverse publicity.
Also, accidents or personal injuries that sometimes occur in our facilities, such as a Member slipping and falling or injuries caused by product falling from a rack, could result in negative publicity or otherwise damage the Company's reputation. We face the risk of exposure to product liability claims, a product recall and adverse publicity.
Our operations are subject to volatile weather conditions and natural disasters, such as earthquakes, hurricanes and volcanic activity, which are encountered periodically in the regions in which our warehouse clubs and other facilities are located.
Our operations are subject to volatile weather conditions and natural disasters, such as earthquakes, hurricanes and volcanic activity, which occur periodically in the regions in which our warehouse clubs and other facilities are located.
We will need to continually evaluate the adequacy of our existing infrastructure, systems and procedures, financial controls, operating controls, inventory, and safety controls and make upgrades from time to time. Moreover, we will be required to continually analyze the sufficiency of our inventory distribution channels and systems and may require additional or expanded facilities in order to support our operations.
We need to continually evaluate the adequacy of our existing infrastructure, systems and procedures, financial controls, operating controls, inventory, and safety controls and make upgrades from time to time. Moreover, we are required to continually analyze the sufficiency of our inventory distribution channels and systems and may require additional or expanded facilities in order to support our operations.
The economic factors that affect our operations may also adversely affect the operations of our suppliers, which can result in an increase in the cost to us of the goods we sell to our customers or, in more extreme cases, in certain suppliers not producing goods in the volume typically available to us. Our profitability is vulnerable to cost increases.
The economic factors that affect our operations may also adversely affect the operations of our suppliers, which can result in an increase in the cost to us of the goods we sell to our customers or, in more extreme cases, in certain suppliers not producing goods in the volume typically available to us.
We are continuing to work on the implementation of a packaged forecast and replenishment system (RELEX) for buying and upgrades to our packaged WMS (Warehouse Management System) and TMS (Transportation Management System) for logistics.
We are continuing to work on the implementation of a packaged forecast and replenishment system (RELEX) for buying and upgrades to our packaged WMS (Warehouse Management System), TMS (Transportation Management System) and GTM (Global Trade Management) for logistics.
Price, the Company’s Chairman of the Board and Interim Chief Executive Officer, and affiliates of Mr. Price, including Price Philanthropies, The Price Group, LLC, The Robert & Allison Price Charitable Remainder Trust and various other trusts, collectively beneficially own approximately 15.3% of our outstanding shares of common stock.
Price, the Company’s Chairman of the Board and Interim Chief Executive Officer, and affiliates of Mr. Price, including Price Philanthropies, The Price Group, LLC, The Robert & Allison Price Charitable Remainder Trust and various other trusts, collectively beneficially own approximately 14.8% of our outstanding shares of common stock.
Any breach of our security measures or those of our third-party service providers and loss of our confidential information, which could be undetected for a period of time, or any failure by us to comply with applicable privacy and information security laws and regulations, could cause us to incur significant costs to protect any Members and/or employees whose personal data was compromised and to restore Member and employee confidence in us and to make changes to our information systems and administrative processes to address security issues and compliance with applicable laws and regulations.
Any breach of our security measures or those of our third-party service providers and loss of our confidential information, or any failure by us to comply with applicable privacy and information security laws and regulations, could cause us to incur significant costs to protect any Members and/or employees whose personal data was compromised to restore Member and employee confidence in us and to make changes to our information systems and administrative processes to address security issues and compliance with applicable laws and regulations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this Form 10-K for further discussion of the effect of currency rate changes, inflation and other economic factors on our operations. We face significant competition. Our international warehouse club business competes with exporters, importers, wholesalers, local retailers and trading companies in various international markets.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion of the effect of currency rate changes, inflation and other economic factors on our operations. We face significant competition. Our international warehouse club business competes with exporters, importers, wholesalers, local retailers and trading companies in various international markets.
We believe these upgrades plus several other projects, such as our point-of-sale system replacement and e-commerce replacement, will modernize our key revenue-generating systems and reduce risk of disruption.
We believe these upgrades plus several other projects, such as our point-of-sale system replacement and e-commerce/mobile application upgrade, will modernize our key revenue-generating systems and reduce the risk of disruption.
Natural disasters could result in physical damage to, or the complete loss of, one or more of our properties, the closure of one or more clubs or distribution centers, limitations on store or club operating hours, the lack of an adequate work force in a market, the inability of customers and employees to reach our clubs, the unavailability of our digital platforms to our customers, disruption in the supply of products or increases in the costs of procuring products.
Natural disasters could result in physical damage to, or the complete loss of, one or more of our properties, the closure of one or more clubs or distribution centers, limitations on store or club operating hours, the lack of an adequate work force in a market, the inability of customers and employees to reach our clubs, extended power outages and spoilage of our fresh and frozen food products, the unavailability of our digital platforms to our customers, disruption in the supply of products or increases in the costs of procuring products.
Of this amount, approximately 71.1% (i.e., 10.9% of our total outstanding shares) is held by charitable entities. As a result of their beneficial ownership, these stockholders have the ability to significantly affect the outcome of all matters submitted to our stockholders for approval, including the election of directors.
Of this amount, approximately 70.5% (i.e., 10.4% of our total outstanding shares) is held by charitable entities. As a result of their beneficial ownership, these stockholders have the ability to significantly affect the outcome of all matters submitted to our stockholders for approval, including the election of directors.
As of August 31, 2024, we had 54 warehouse clubs in operation, located in 12 countries and one U.S. territory (ten in Colombia; eight in Costa Rica ; seven in Panama ; six in 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) .
As of August 31, 2025, we had 56 warehouse clubs in operation, located 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) .
We also utilize third-party service providers for a variety of reasons, including, without limitation, cloud services, back-office support, and other functions. In addition, our online operations depend upon the secure transmission of confidential information over public networks, including information permitting cashless payments.
We also utilize third-party service providers for a variety of reasons, including, without limitation, cloud services, back-office support, and other functions and our online operations depend on the secure transmission of confidential information over public networks, including information used for cashless payments.
In addition, there are newer versions available from the vendors of some of our other internal systems offering greater functionality and reliability that we have not yet implemented. We also continue to rely on other systems we developed internally a number of years ago, and we are in the process of migrating these systems to more industry-standard technologies.
In addition, newer versions of some of our other internal systems offered by the vendors, offer greater functionality and reliability that we have not yet implemented. We also continue to rely on other systems we developed internally a number of years ago, and we are in the process of migrating these systems to more industry-standard technologies.
We will be at a competitive disadvantage if, over time, our competitors are more effective than us in their utilization and integration of rapidly evolving technologies, including artificial intelligence and machine learning technologies. Our current ERP (Enterprise Resource Planning) system is no longer supported by the developer of the software, which could increase the risk of a system disruption.
We will be at a competitive disadvantage if, over time, our competitors are more effective than we are in utilizing and integrating rapidly evolving technologies, including artificial intelligence and machine learning. Our current ERP (Enterprise Resource Planning) system is no longer supported by its developer, which could increase the risk of a disruption.
If our computer systems and back-up systems are damaged or cease to function properly, we may have to make significant investments to fix or replace them, and we may suffer interruptions in our operations in the interim. Any material interruption in our computer systems could have a material adverse effect on our business or results of operations.
If our computer systems and backup systems are damaged or fail to function properly, we may have to make significant investments to repair or replace them, and we may suffer interruptions in our operations in the interim. Any material interruption in our computer systems could have a material adverse effect on our business or results of operations.
As part of the settlement, we will pay the minimum tax on a go-forward basis. 20 Table of Contents A few of our stockholders own approximately 15.3% of our voting stock as of August 31, 2024, which may make it difficult to complete some corporate transactions without their support and may impede a change in control. Robert E.
As part of the settlement, we will pay the minimum tax on a go-forward basis. A few of our stockholders own approximately 14.8% of our voting stock as of August 31, 2025, which may make it difficult to complete some corporate transactions without their support and may impede a change in control. Robert E.
For example, we have begun migrating to the Elera™ point-of-sale system, which is a Toshiba product, and if we are not able to successfully implement this product, or experience significant delays, it may jeopardize our operations or result in additional costs. 16 Table of Contents Not updating our systems on a timely basis could leave us at a disadvantage relative to our competitors.
For example, we are in the midst of migrating to the Toshiba Elera™ point-of-sale system and if we cannot successfully implement this product, or experience significant delays, it may jeopardize our operations or result in additional costs. Not updating our systems on a timely basis could leave us at a disadvantage relative to our competitors.
If we buy too much of a product, we might be required to reduce prices or otherwise liquidate the excess inventory, which could have an adverse effect on margins (net sales less merchandise costs) and operating income. If we do not have sufficient quantities of a popular product, we might lose sales and profits we otherwise could have made.
If we buy too much of a product, we might be required to reduce prices or otherwise liquidate the excess inventory, which could have an adverse effect on margins (net sales less merchandise costs) and operating income.
Our balance as of August 31, 2024 of Trinidad dollar denominated cash and cash equivalents and short and long-term investments measured in U.S. dollars was $60.2 million, a decrease of $40.3 mill ion from the peak of $100.5 million as of November 30, 2020.
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. dollars was $59.7 million, a decrease of $40.8 mill ion from the peak of $100.5 million as of November 30, 2020.
The monetary lease liability subject to revaluation as of August 31, 2024 was $31.5 million. Due to the mix of foreign currency exchange rate fluctuations during fiscal year 2024, the impact to the consolidated statements of income of revaluing this liability was immaterial. Item 1B. Unresolved Staff Comments None.
The monetary lease liability subject to revaluation as of August 31, 2025 was $52.7 million. Due to the mix of foreign currency exchange rate fluctuations during fiscal year 2025, the impact to the consolidated statements of income of revaluing this liability was immaterial. Item 1B. Unresolved Staff Comments None. 23 Table of Contents
As of August 31, 2024, we had a total of 54 warehouse clubs operating in 12 foreign countries and one U.S. territory, 42 of which operate under currencies other than the U.S. dollar. For fiscal year 2024, approximately 79.5% of our net merchandise sales were in foreign currencies.
As of August 31, 2025, we had a total of 56 warehouse clubs operating in 12 foreign countries and one U.S. territory, 44 of which operate under currencies other than the U.S. dollar. For fiscal year 2025, approximately 80.1% of our net merchandise sales were in foreign currencies.
As cyber threats evolve and become more difficult to detect and successfully defend against, one or more hackers, cyber terrorists or others might defeat our security measures or those of our third-party service providers and obtain the personal information of Members, employees and vendors that we hold or to which our third-party service providers have access, and we or our third-party service providers may not discover any security breach and loss of information for a significant period of time after the security breach occurs.
As a result, one or more hackers, cyber terrorists or others might obtain the personal information of Members, employees and vendors that we hold or to which our third-party service providers have access, and we or our third-party service providers may not discover any security breach and loss of information for a significant period of time after the security breach occurs.
The inability or failure of one or more key transportation companies to provide transportation services to us, any collusion among the transportation companies regarding shipping prices or terms, changes in the regulations that govern shipping tariffs or the importation of products, or any other disruption to our ability to import our merchandise could have a material adverse effect on our business and results of operations. 12 Table of Contents We are subject to payment related risks, including risks to the security of payment card information.
The inability or failure of one or more key transportation companies to provide transportation services to us, any collusion among the transportation companies regarding shipping prices or terms, changes in the regulations that govern shipping tariffs or the importation of products, or any other disruption to our ability to import our merchandise could have a material adverse effect on our business and results of operations.
In addition, even if a product liability claim is not successful or is not fully pursued, the negative publicity surrounding a product recall or any assertion that our products caused illness or injury could have a material adverse effect on our reputation with existing and potential Members and on our business, financial condition and results of operations.
In addition, even if a product liability claim is not successful or is not fully pursued, the negative publicity surrounding a product recall or any assertion that our products caused illness or injury could have a material adverse effect on our reputation with existing and potential Members and on our business, financial condition and results of operations. 17 Table of Contents We rely extensively on computer systems to process transactions, summarize results and manage our business.
We rely extensively on computer systems to process transactions, summarize results and manage our business. Failure to adequately maintain our systems or disruptions of our systems could harm our business and adversely affect our results of operations . Given the high number of individual transactions we have each year, we seek to maintain uninterrupted operation of our business-critical computer systems.
Failure to adequately maintain our systems, or disruptions to them, could harm our business and adversely affect our results of operations . Given the high volume of individual transactions we process each year, we seek to maintain the uninterrupted operation of our business-critical computer systems.
Changes to the rules and regulations governing the importation of merchandise may result in additional delays, costs or barriers in our deliveries of products to our warehouse clubs or may affect the type of products we select to import. In addition, only a limited number of transportation companies service our regions.
Changes to the rules and regulations governing the importation of merchandise may result in additional delays, costs or barriers in our deliveries of products to our warehouse clubs or may affect the type of products we select to import.
The retail business is quickly evolving, and consumers are increasingly embracing shopping online and through mobile commerce applications. As a result, the portion of total consumer expenditures with all retailers and wholesale clubs occurring online and through mobile commerce applications is increasing and the pace of this increase could accelerate.
As a result, the portion of total consumer expenditures with all retailers and wholesale clubs occurring online and through mobile commerce applications is increasing, and the pace of this increase could accelerate.
Targeting the wrong opportunities, failing to make the right investments, or making an investment commitment significantly above or below our needs could result in the loss of our competitive position and adversely impact our financial condition and results of operations.
The risk of system disruption increases when changes are made to these processes and systems. Targeting the wrong opportunities, failing to make the right investments, or making an investment commitment significantly above or below our needs could result in the loss of our competitive position and adversely impact our financial condition and results of operations.
Additionally, any investments we make in AI technologies might not actually make us more efficient. Our competitors or other third parties may incorporate AI into their businesses more rapidly or more successfully than us, which could hinder our ability to compete effectively and adversely affect our results of operations.
Our competitors or other third parties may incorporate AI into their businesses more rapidly or more successfully than us, which could hinder our ability to compete effectively and adversely affect our results of operations.
We rely on third parties to provide secure and reliable payment transaction processing services, including the processing of credit and debit cards, and it could disrupt our business if these companies become unwilling or unable to provide these services to us.
For certain payment methods, we pay interchange and other related card acceptance fees, along with additional transaction processing fees. We rely on third parties to provide secure and reliable payment transaction processing services, including the processing of credit and debit cards, and it could disrupt our business if these companies become unwilling or unable to provide these services to us.
However, if we are not successful in this strategy, we might be required to operate with obsolete technology and will be subject to risks of system disruption, which would put us at a disadvantage relative to our competitors.
However, if we are not successful with this strategy, we might be required to operate with obsolete technology and face the risk of system disruption, putting us at a disadvantage relative to our competitors.
However, if the Colombia peso were to weaken again and we were to again absorb the costs of the devaluation or take pricing actions to lower the cost to our Members to mitigate a decrease in demand, consolidated Total gross margins could be negatively impacted.
However, if the Colombia peso were to weaken again and we were to again absorb the costs of the devaluation or take pricing actions to lower the cost to our Members to mitigate a decrease in demand, consolidated Total gross margins could be negatively impacted. 22 Table of Contents From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity).
Our success depends, to a significant degree, on the continued contributions of members of our senior management and other key operations, merchandising and administrative personnel, and the loss of any such persons could have a material adverse effect on our business.
Our success depends, to a significant degree, on the continued contributions of members of our senior management and other key operations, merchandising and administrative personnel.
Our ability to collect and use that data, however, is subject to a number of external factors, including the impact of legislation or regulations governing data privacy, data-driven technologies such as artificial intelligence, and data security, as well as customer expectations around data collection, retention, and use.
Our ability to collect and use that data, however, is subject to a number of external factors, including the impact of legislation or regulations governing data privacy, data-driven technologies such as artificial intelligence, and data security, as well as customer expectations around data collection, retention, and use. 15 Table of Contents Future sales growth depends, in part, on our ability to successfully open new warehouse clubs in our existing and new markets .
We depend on our brands, such as the PriceSmart name and logo, to attract Members and make sales of goods and services. We monitor and protect against activities that might infringe, dilute or otherwise violate our trademarks and other intellectual property, and rely on trademark and other laws of the United States and other countries in which we operate.
We monitor and protect against activities that might infringe, dilute or otherwise violate our trademarks and other intellectual property, and rely on trademark and other laws of the United States and other countries in which we operate.
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. A lengthy work stoppage or significant limitation on operations could have a substantial adverse effect on our financial condition and results of operations.
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.
As a result, the Company has made and may continue to make income tax payments substantially in excess of those it would expect to pay based on taxable income, and the rules that allow the Company to obtain refunds or to offset payments that are substantially in excess of taxes payable based on taxable income are unclear or complex.
As a result, the Company has made and may continue to make income tax payments substantially in excess of those it would expect to pay based on taxable income, and the rules that allow the Company to obtain refunds or to offset payments that are substantially in excess of taxes payable based on taxable income are unclear or complex. 21 Table of Contents For example, in fiscal year 2023, we recorded a $7.2 million charge to settle the minimum tax payment dispute in one country.
While new AI initiatives, laws, and regulations are emerging and evolving, what they ultimately will look like remains uncertain, and our obligation to comply with them could entail significant costs, negatively affect our business, or limit our ability to incorporate certain AI capabilities into our business. 18 Table of Contents Any failure by us to protect our trademarks, trade secrets and other intellectual property, or our actual or alleged infringement of other companies’ intellectual property, could harm our business.
While new AI initiatives, laws, and regulations are emerging and evolving, what they ultimately will look like remains uncertain, and our obligation to comply with them could entail significant costs, negatively affect our business, or limit our ability to incorporate certain AI capabilities into our business.
If we or those with whom we share information fail to comply with these laws and regulations, we could be subjected to legal risk as a result of non-compliance. 17 Table of Contents We or our third-party service providers may be unable to anticipate one or more of the rapidly evolving and increasingly sophisticated means by which computer hackers, cyber terrorists and others may attempt to defeat our security measures or those of our third-party service providers and breach our or our third-party service providers' information systems.
We or our third-party service providers may be unable to anticipate one or more of the rapidly evolving and increasingly sophisticated means by which computer hackers, cyber terrorists and others may attempt to defeat our security measures or those of our third-party service providers and breach our or our third-party service providers' information systems.
In addition, protestors set up roadblocks in Panama in October and November 2023 disrupting traffic to our clubs throughout most of the market as a reaction to an agreement between the Panamanian government and a mining company.
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.
As a result, our new warehouse clubs might not be successful in new markets. Failure to grow our e-commerce business through the integration of physical and digital retail channels and the investments we are making to develop a robust e-commerce platform could materially adversely affect our market position, net sales and/or financial performance.
Failure to grow our e-commerce business through the integration of physical and digital retail channels and the investments we are making to develop a robust e-commerce platform could materially adversely affect our market position, net sales and/or financial performance. The retail business is quickly evolving, and consumers are increasingly embracing shopping online and through mobile commerce applications.
We are exposed to significant weather events and other natural disaster risks that might not be adequately compensated by insurance, and we are susceptible to the long-term impacts of climate change.
In either case, sales through our online platform or warehouse clubs could be adversely affected. 12 Table of Contents We are exposed to significant weather events and other natural disaster risks that might not be adequately compensated by insurance, and we are susceptible to the long-term impacts of climate change.
The sale of these items exposes us to the risk of product liability claims, a product recall and adverse publicity. We may inadvertently redistribute food products or prepare food products that are contaminated, which may result in illness, injury or death if the contaminants are not eliminated by processing at the food service or consumer level.
In particular, we may inadvertently redistribute food products or prepare food products that are contaminated, which may result in illness, injury or death if the contaminants are not eliminated by processing at the food service or consumer level.
Fluctuations in exchange rates for foreign currencies have and could continue to reduce the U.S. dollar value of sales, earnings and cash flows we receive from our non-U.S. markets, increase our supply costs (as measured in U.S. dollars) in those markets, negatively impact our competitiveness in those markets or otherwise adversely impact our business results or financial condition. 9 Table of Contents Our business depends heavily on the uninterrupted operation of our distribution facilities located in Miami, Florida and San Jose, Costa Rica, our warehouse clubs located in Colombia, Central America and the Caribbean, and our headquarters and buying operations in San Diego, California.
Fluctuations in exchange rates for foreign currencies have and could continue to reduce the U.S. dollar value of sales, earnings and cash flows we receive from our non-U.S. markets, increase our supply costs (as measured in U.S. dollars) in those markets, negatively impact our competitiveness in those markets or otherwise adversely impact our business results or financial condition.
Depending on the severity of the devaluation and corresponding price increase (as experienced in Colombia in fiscal 2023), the demand for, sales of, and profitability of those products could be negatively impacted. From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity).
Depending on the severity of the devaluation and corresponding price increase (as experienced in Colombia in fiscal year 2023), the demand for, sales of, and profitability of those products could be negatively impacted.
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. Roadblocks in Guatemala in October 2023 relating to election protests also limited access to certain of our warehouse clubs.
Civil unrest in certain countries in which we operate may adversely affect the flow of goods through those countries. 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 some cases, we have more than one warehouse club in a single metropolitan area, and we may open new warehouse clubs in certain areas where we already have warehouse clubs. A new warehouse club in an area already served by existing warehouse clubs may draw Members away from existing warehouse clubs and adversely affect comparable store sales performance.
In addition, in some cases, we have more than one warehouse club in a single metropolitan area, and we may open new warehouse clubs in certain areas where we already have warehouse clubs.
Our warehouse clubs typically import nearly half or more of the merchandise that they sell.
We face difficulties in the shipment of, and risks inherent in the importation of, merchandise to our warehouse clubs. Our warehouse clubs typically import nearly half or more of the merchandise that they sell.
We are also subject to payment card association and network operating rules, including data security rules, certification requirements and rules governing electronic funds transfers, which could change over time. If we fail to comply with these rules or transaction processing requirements, we may not be able to accept certain payment methods.
We are also subject to fee increases by these service providers. We are also subject to payment card association and network operating rules, including data security rules, certification requirements and rules governing electronic funds transfers, which could change over time.
As our customers expect a more personalized experience, our ability to collect, use, retain, and protect relevant customer data is important to our ability to effectively meet their expectations.
If we do not have sufficient quantities of a popular product, we might lose sales and profits we otherwise could have made. As our customers expect a more personalized experience, our ability to collect, use, retain, and protect relevant customer data is important to our ability to effectively meet their expectations.
Any failure by us to maintain the security of the information that we hold relating to our Company, Members, employees and vendors, could damage our reputation with them, could disrupt our operations, could cause us to incur substantial additional costs and to become subject to litigation and could materially affect our operating results.
These initiatives might not deliver the anticipated benefits, may do so on a delayed schedule or at a higher cost, or may disrupt our business. 18 Table of Contents Any failure by us to maintain the security of the information we hold relating to our Company, Members, employees, and vendors, could damage our reputation with them, disrupt our operations, cause us to incur substantial additional costs, expose us to litigation, and materially affect our operating results.
These include, but are not limited to, local, regional, and international merchandise suppliers, information technology suppliers, equipment suppliers, financial institutions, credit card issuers and processors, and lessors. Significant changes in the relationships or the agreements that govern the terms through which business is conducted could have a material adverse effect on our business, financial condition and results of operations.
Significant changes in the relationships or the agreements that govern the terms through which business is conducted could have a material adverse effect on our business, financial condition and results of operations.
For example, in 2022, a third party that supported our point-of-sale system became insolvent, which required us to quickly develop and implement short-term workarounds and delayed our migration to a cloud-based system integrating in-store and online functionality.
For example, in 2022, a third-party provider supporting our point-of-sale system became insolvent, requiring us to quickly develop and implement short-term workarounds and delaying our migration to a cloud-based system integrating in-store and online functionality. From time to time, we make technology investments to improve or replace key information processes and systems that support our business.
Some of our computer systems currently, and might in the future, incorporate artificial intelligence (“AI”) solutions, including machine learning and generative AI tools that collect, aggregate, and analyze data to assist in the development of our services and products and in the use of internal tools that support our business.
Some of our computer systems currently, and might in the future, incorporate artificial intelligence (“AI”) solutions, including machine learning and generative AI tools that collect, aggregate, and analyze data to assist in the operations of our business. These applications may become increasingly important in our operations over time. This emerging technology presents a number of risks inherent in its use.
In this regard, we compete with other retailers and businesses for suitable locations. Additionally, local land use, environmental and other regulations restricting the construction and operation of our warehouse clubs may impact our ability to find suitable locations, and increase the cost of constructing, leasing and operating our warehouse clubs.
Additionally, local land use, environmental and other regulations restricting the construction and operation of our warehouse clubs and distribution facilities, as well as local community actions opposed to the location of our warehouse clubs or distribution facilities at specific sites, may impact our ability to find suitable locations, and increase the cost of constructing, leasing and operating our warehouse clubs and distribution facilities.
The risks associated with entering a new market include potential difficulties in attracting Members due to a lack of familiarity with us and our lack of familiarity with local Member preferences. In addition, entry into new markets may bring us into competition with new competitors or with existing competitors with a large, established market presence.
We intend to open warehouse clubs in new markets in the future, including Chile. The risks associated with entering a new market include potential difficulties in attracting Members due to a lack of familiarity with us and our lack of familiarity with local Member preferences.
We are working with our banks in Trinidad and government officials to convert all of our Trinidad dollars into tradable currencies. For instance, during fiscal year 2021, we experienced significant limitations on our ability to convert Trinidad dollars to U.S. dollars or other tradable currencies.
We are working with our banks in Trinidad and government officials to convert all of our Trinidad dollars into tradable currencies.
The extent to which we achieve growth in our membership base and sustain high renewal rates materially influences our profitability.
We believe membership promotes Member loyalty, and membership fees contribute to our ability to operate our business on lower margins than conventional retailers and wholesalers. The extent to which we achieve growth in our membership base and sustain high renewal rates materially influences our profitability.
We do not maintain life or disability insurance for our key executives. 19 Table of Contents Legal and Compliance Risks We face compliance risks related to our international operations. In the United States and within the international markets where we operate, there are multiple laws and regulations that relate to our business and operations.
In the United States and within the international markets where we operate, there are multiple laws and regulations that relate to our business and operations.
As we offer new payment options to our Members, we may be subject to additional rules, regulations and compliance requirements, along with the risk of higher fraud losses. For certain payment methods, we pay interchange and other related card acceptance fees, along with additional transaction processing fees.
Our operations, like those of most retailers, require the transmission of information associated with cashless payments. As we offer new payment options to our Members, we may be subject to additional rules, regulations and compliance requirements, along with the risk of higher fraud losses.
For more information about the lack of U.S. dollar availability risks we face, see "Financial and Accounting Risks – We are subject to volatility in foreign currency exchange rates and limits on our ability to convert foreign currencies into U.S. dollars." Negative economic conditions created or exacerbated by inflation, and higher interest rates could adversely impact our business in various respects.
For more information about foreign currency exchange rate risks and risks associated with the lack of U.S. dollar availability, see "Financial and Accounting Risks – We are subject to volatility in foreign currency exchange rates and limits on our ability to convert foreign currencies into U.S. dollars." 10 Table of Contents Political and other factors in each of our markets may have significant effects on our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur FVPIS spent over three decades in federal law enforcement working in cyber related roles.
Biggest changeOur CIO, FVPIS, and SVPITSS collectively have over eight decades of IT and cybersecurity experience, including five decades in senior-level leadership roles. Our FVPIS spent over three decades in federal law enforcement working in cyber related roles. 25 Table of Contents
The Audit Committee oversees management's implementation of our cybersecurity risk management program. The Audit Committee receives quarterly reports from our CIO and/or our FVPIS regarding any significant cybersecurity incidents, as well as any incidents with lesser impact potential.
The Audit Committee oversees management's implementation of our cybersecurity risk management program. The Audit Committee receives quarterly reports from our CIO, FVPIS, and/or our SVPITSS regarding any significant cybersecurity incidents, as well as any incidents with lesser impact potential.
The CIO and FVPIS report quarterly to the Audit Committee and Board regarding cybersecurity risks and the status of our cyber risk management program. Our CIO and/or FVPIS also periodically make presentations to Board members on cybersecurity topics as part of the Board's continuing education on topics that impact our company.
The CIO, FVPIS, and SVPSS report quarterly to the Audit Committee and Board regarding cybersecurity risks and the status of our cyber risk management program. Our CIO, FVPIS, and/or our SVPITSS also periodically make presentations to Board members on cybersecurity topics as part of the Board's continuing education on topics that impact our company.
Our cybersecurity risk management program includes but is not limited to the following: • risk assessments performed both internally and by external vendors to assist in the identification of material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise Information Technology (IT) environment; • contracting with and use of third-party service providers, where deemed necessary, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training for our employees; • adoption of a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a risk management process for selecting and working with key service providers, suppliers, and vendors that takes into account our assessment of their criticality to our operations and their respective risk profiles.
Our cybersecurity risk management program includes but is not limited to the following: • risk assessments performed both internally and by external vendors to assist in the identification of material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise Information Technology (IT) environment; • contracting with and use of third-party service providers, where deemed necessary, to assess, test, or otherwise assist with aspects of our security controls; • cybersecurity awareness training for our employees; • adoption of a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a risk management process for selecting and working with key service providers, suppliers, and vendors that utilizes our internal assessment of their criticality to our operations and their respective risk profiles.
These frameworks are a set of coordinated procedures and tasks that our incident response teams execute with the goal of ensuring timely and accurate identification, resolution and reporting of cybersecurity incidents both internally and externally, as necessary. We regularly test and update these frameworks to ensure timely and accurate identification, resolution, and reporting of cybersecurity incidents.
These frameworks are a set of coordinated procedures and tasks that our incident response teams execute with the goal of ensuring timely and accurate identification, resolution and reporting of cybersecurity incidents both internally and externally, as necessary.
While we have based our cybersecurity risk management program on these frameworks, we have not obtained these specific certifications to date. Our cybersecurity risk management program is overseen by our 22 Table of Contents Chief Information Officer ("CIO") and/or our First Vice President of Information Security ("FVPIS") and reviewed annually.
While we have based our cybersecurity risk management program on these frameworks, we have not obtained these specific certifications to date. Our cybersecurity risk management program is overseen by our Chief Information Officer ("CIO"), our First Vice President Information Security ("FVPIS") and our Senior Vice President Information Technology Shared Services (“SVPITSS”) and reviewed annually.
We have not identified and are not aware of any risks from cybersecurity threats, including as a result of any prior cybersecurity incidents, which have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
We regularly test and update these frameworks to ensure timely and accurate identification, resolution, and reporting of cybersecurity incidents. 24 Table of Contents We have not identified and are not aware of any risks from cybersecurity threats, including as a result of any prior cybersecurity incidents, which have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
This may include briefings from internal security personnel; sharing publicly or privately available threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and forwarding alerts and reports produced by network monitoring and security tools we deploy. 23 Table of Contents Our CIO and FVPIS collectively have over eight decades of IT and cybersecurity experience, including five decades in senior-level leadership roles.
This may include briefings from internal security personnel; sharing publicly or privately available threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and forwarding alerts and reports produced by network monitoring and security tools we deploy.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of August 31, 2024, sales floors of the Company’s warehouse club buildings occupied a total of approximately 2,646,130 square feet, of which 400,191 square feet were on leased property. 24 Table of Contents We operate two large regional distribution centers, one in Miami, Florida and the other in San Jose, Costa Rica, along with several smaller local distribution centers for the consolidation and distribution of merchandise shipments to our warehouse clubs.
Biggest changeWe operate two large regional distribution centers, one in Miami, Florida and the other in San Jose, Costa Rica, along with several smaller local distribution centers for the consolidation and distribution of merchandise shipments to our warehouse clubs.
The term on these leases for our warehouse clubs generally run for 20 to 30 years and contain options to renew from 5 to 20 years. We actively seek to secure lease extensions or find suitable replacement properties before our leases expire.
The terms on these leases for our warehouse clubs generally run for 20 to 30 years and contain options to renew from 5 to 20 years. We actively seek to secure lease extensions or find suitable replacement properties before our leases expire.
As current leases expire, we believe that we will be able to obtain lease renewals, if desired, for these present locations, or to obtain leases for equivalent or better locations in the same general area.
As current leases expire, we believe that we will be able to obtain lease renewals, if desired, for these present locations, or to obtain leases for equivalent or better locations in the same general area. 26 Table of Contents
For instance, we've recently entered into a lease agreement to relocate our Miraflores, Guatemala club, for which the current lease was due to expire on December 31, 2025, to a new location adjacent to the current club location. We expect to relocate our Miraflores club to this new location in fiscal year 2026.
For instance, we've recently entered into a lease agreement to relocate our Miraflores, Guatemala club, for which the current lease was due to expire on December 31, 2025, to a new location adjacent to the current club location. We expect to relocate our Miraflores club to this new location in the second half of calendar year 2026.
Properties At August 31, 2024, PriceSmart operated 54 membership warehouse clubs, as detailed below: Location Own land and building Lease land and/or building COLOMBIA SEGMENT Colombia 9 1 CENTRAL AMERICA SEGMENT Costa Rica (1) 8 — El Salvador 4 — Guatemala (2) 3 3 Honduras 2 1 Nicaragua 2 — Panama (3) 6 1 CARIBBEAN SEGMENT Aruba — 1 Barbados 1 — Dominican Republic 5 — Jamaica 2 — Trinidad 3 1 USVI — 1 Total 45 9 (1) The Company purchased land located in Cartago, Costa Rica, where we plan to open our ninth warehouse club in Costa Rica in the spring of 2025.
Properties At August 31, 2025, PriceSmart operated 56 membership warehouse clubs, as detailed below: Location Own land and building Lease land and/or building COLOMBIA SEGMENT Colombia 9 1 CENTRAL AMERICA SEGMENT Costa Rica 9 — El Salvador 4 — Guatemala 3 4 Honduras 2 1 Nicaragua 2 — Panama 6 1 CARIBBEAN SEGMENT Aruba — 1 Barbados 1 — Dominican Republic (1) 5 — Jamaica (2) 2 — Trinidad 3 1 USVI — 1 Total 46 10 (1) The Company purchased land located in La Romana, Dominican Republic, where we plan to open our sixth warehouse club in Dominican Republic in the spring of 2026.
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(2) The Company expects to formalize a land lease in the first quarter of fiscal year 2025 for land in Quetzaltenango, Guatemala, where we plan to open our seventh warehouse club in Guatemala in the summer of 2025. (3) In January 2024, the Company purchased one of its club's buildings and land, which was previously leased, in Panama City, Panama.
Added
(2) The Company purchased land located in Montego Bay, Jamaica, and leased land located on South Camp Road, Jamaica, where we plan to open our third and fourth warehouse clubs in Jamaica in the summer and fall of 2026, respectively.
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As of August 31, 2025, sales floors of the Company’s warehouse club buildings occupied a total of approximately 2,732,467 square feet, of which 441,461 square feet were on leased property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFinancial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 9 – Commitments and Contingencies” for additional information regarding our legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 25 Table of Contents PART II
Biggest changeFinancial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 9 – Commitments and Contingencies” for additional information regarding our legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 27 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends Declared Amount First Payment Second Payment Record Date Date Paid Amount Record Date Date Paid Amount 4/3/2024 $ 1.00 4/19/2024 4/30/2024 $ 1.00 N/A N/A N/A 2/1/2024 $ 1.16 2/15/2024 2/29/2024 $ 0.58 8/15/2024 8/30/2024 $ 0.58 2/3/2023 $ 0.92 2/16/2023 2/28/2023 $ 0.46 8/15/2023 8/31/2023 $ 0.46 2/3/2022 $ 0.86 2/15/2022 2/28/2022 $ 0.43 8/15/2022 8/31/2022 $ 0.43 On April 3, 2024, the Company's Board of Directors declared a one-time $1.00 per share special dividend paid on April 30, 2024 to stockholders of record on April 19, 2024 to distribute excess cash to stockholders.
Biggest changeDividends Declared Amount First Payment Second Payment Record Date Date Paid Amount Record Date Date Paid Amount 2/3/2023 $ 0.92 2/16/2023 2/28/2023 $ 0.46 8/15/2023 8/31/2023 $ 0.46 2/1/2024 $ 1.16 2/15/2024 2/29/2024 $ 0.58 8/15/2024 8/30/2024 $ 0.58 4/3/2024 $ 1.00 4/19/2024 4/30/2024 $ 1.00 N/A N/A N/A 2/6/2025 $ 1.26 2/18/2025 2/28/2025 $ 0.63 8/15/2025 8/29/2025 $ 0.63 On February 6, 2025, the Company's Board of Directors declared an annual cash dividend in the total amount of $1.26 per share, with $0.63 per share paid on February 28, 2025 to stockholders of record as of February 18, 2025 and $0.63 per share paid on August 29, 2025 to stockholders of record as of August 15, 2025.
The declaration of future dividends (ongoing or otherwise), if any, the amount of such dividends, and the establishment of record and payment dates is subject to final determination by the Board of Directors at its discretion after its review of the Company’s financial performance and anticipated capital requirements, taking into account the uncertain macroeconomic conditions on our results of operations and cash flows. 26 Table of Contents Repurchase of Equity Securities Upon vesting of restricted stock awarded by the Company to employees, the Company repurchases shares and withholds the amount of the repurchase payment to cover employees’ tax withholding obligations.
The declaration of future dividends (ongoing or otherwise), if any, the amount of such dividends, and the establishment of record and payment dates is subject to final determination by the Board of Directors at its discretion after its review of the Company’s financial performance and anticipated capital requirements, taking into account the uncertain macroeconomic conditions on our results of operations and cash flows. 28 Table of Contents Repurchase of Equity Securities Upon vesting of restricted stock awarded by the Company to employees, the Company repurchases shares and withholds an amount of the repurchase payment to cover employees’ tax withholding obligations.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock has been quoted and traded on the NASDAQ Global Select Market under the symbol “PSMT” since September 2, 1997. As of October 25, 2024, there were approximately 385 holders of record of the common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock has been quoted and traded on the NASDAQ Global Select Market under the symbol “PSMT” since September 2, 1997. As of October 24, 2025, there were approximately 354 holders of record of the common stock.
Dates Stock Price From To High Low 2024 FISCAL QUARTERS First Quarter 9/1/2023 11/30/2023 $ 81.41 $ 61.82 Second Quarter 12/1/2023 2/29/2024 84.93 67.48 Third Quarter 3/1/2024 5/31/2024 87.99 77.86 Fourth Quarter 6/1/2024 8/31/2024 92.76 77.51 2023 FISCAL QUARTERS First Quarter 9/1/2022 11/30/2022 $ 73.76 $ 56.29 Second Quarter 12/1/2022 2/28/2023 75.92 60.01 Third Quarter 3/1/2023 5/31/2023 79.55 66.54 Fourth Quarter 6/1/2023 8/31/2023 82.63 69.08 Recent Sales of Unregistered Securities In September 2022, the Company issued restricted stock awards (RSAs) and performance stock units (PSUs) covering 156,225 shares of the Company’s common stock, $0.0001 par value per share.
Dates Stock Price From To High Low 2025 FISCAL QUARTERS First Quarter 9/1/2024 11/30/2024 $ 94.82 $ 82.00 Second Quarter 12/1/2024 2/28/2025 99.23 81.66 Third Quarter 3/1/2025 5/31/2025 108.54 81.25 Fourth Quarter 6/1/2025 8/31/2025 114.01 99.98 2024 FISCAL QUARTERS First Quarter 9/1/2023 11/30/2023 $ 81.41 $ 61.82 Second Quarter 12/1/2023 2/29/2024 84.93 67.48 Third Quarter 3/1/2024 5/31/2024 87.99 77.86 Fourth Quarter 6/1/2024 8/31/2024 92.76 77.51 Recent Sales of Unregistered Securities In September 2022, the Company issued restricted stock awards (RSAs) and performance stock units (PSUs) covering 156,225 shares of the Company’s common stock, $0.0001 par value per share.
The following table sets forth information on our common stock repurchase activity for fiscal year 2024 (dollars in thousands, except per share data): Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs September 1, 2023 - September 30, 2023 221,272 $ 75.57 221,272 $ 52,655 October 1, 2023 - October 31, 2023 722,797 73.67 714,391 — November 1, 2023 - November 30, 2023 — — — — December 1, 2023 - December 31, 2023 — — — — January 1, 2024 - January 31, 2024 23,106 76.44 — — February 1, 2024 - February 29, 2024 — — — — March 1, 2024 - March 31, 2024 615 84.00 — — April 1, 2024 - April 30, 2024 764 81.58 — — May 1, 2024 - May 31, 2024 — — — — June 1, 2024 - June 30, 2024 — — — — July 1, 2024 - July 31, 2024 1,437 87.02 — — August 1, 2024 - August 31, 2024 10,085 88.96 — — Total 980,076 $ 74.36 935,663 Item 6.
The following table sets forth information on our common stock repurchase activity for fiscal year 2025 (dollars in thousands, except per share data): Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs September 1, 2024 - September 30, 2024 — $ — — N/A October 1, 2024 - October 31, 2024 35,893 91.70 — N/A November 1, 2024 - November 30, 2024 — — — N/A December 1, 2024 - December 31, 2024 — — — N/A January 1, 2025 - January 31, 2025 27,198 90.45 — N/A February 1, 2025 - February 28, 2025 — — — N/A March 1, 2025 - March 31, 2025 466 88.82 — N/A April 1, 2025 - April 30, 2025 832 100.26 — N/A May 1, 2025 - May 31, 2025 — — — N/A June 1, 2025 - June 30, 2025 — — — N/A July 1, 2025 - July 31, 2025 561 106.25 — N/A August 1, 2025 - August 31, 2025 7,334 108.06 — N/A Total 72,284 $ 93.08 — N/A Item 6.
Removed
The $1.00 per share special dividend was in addition to the Company’s annual cash dividend in the total amount of $1.16 per share, with $0.58 per share paid on February 29, 2024 to stockholders of record as of February 15, 2024 and $0.58 per share paid on August 30, 2024 to stockholders of record as of August 15, 2024.
Removed
In addition, in July 2023 we announced a program authorized by our Board of Directors to repurchase up to $75 million of our common stock. We began repurchases in the fourth quarter of fiscal year 2023 and successfully completed the share repurchase program in the first quarter of fiscal year 2024.
Removed
We purchased a total of approximately 1,007,000 shares of our common stock under the program.
Removed
The repurchases were made on the open market pursuant to a trading plan established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which permitted us to repurchase common stock at a time that we might otherwise have been precluded from doing so under insider trading laws or self-imposed trading restrictions.
Removed
We have no plans to continue repurchases or adopt a new repurchase plan at this time. However, the Board of Directors could choose to commence another program in the future, at its discretion, after its review of the Company’s financial performance and anticipated capital requirements.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

118 edited+29 added−64 removed68 unchanged
Biggest changeComparable net merchandise sales - constant currency for the 13 weeks ended September 1, 2024 increased 6.0%. • Membership income for the fourth quarter of fiscal year 2024 increased 14.1% to $19.7 million over the comparable prior year period. • Total gross margins (net merchandise sales less associated cost of goods sold) increased 10.3% over the prior-year period, and merchandise gross profits as a percent of net merchandise sales were 15.7%, an increase of 10 basis points or 0.1% from the same period in the prior year. • Selling, general and administrative expenses increased $3.4 million or 2.2% compared to the fourth quarter of fiscal year 2023, primarily due to higher compensation costs, professional fees, depreciation expense and bank fees which were partially offset by costs associated with the reserve for the AMT settlement and asset impairment and closure costs which occurred during the fourth quarter of fiscal year 2023. • Operating income for the fourth quarter of fiscal year 2024 was $49.2 million, an increase of 53.1%, or $17.1 million, compared to the fourth quarter of fiscal year 2023. • We recorded a $7.4 million net loss in total other expense, net in the fourth quarter of fiscal year 2024 compared to a $1.5 million net loss in total other expense, net in the same period last year primarily due to an increase in other expense of $4.2 million, primarily driven by an increase in total foreign currency transaction losses and a decrease of $1.2 million in interest income. • Our effective tax rate decreased in the fourth quarter of fiscal year 2024 to 30.4% from 49.9% in the fourth quarter of fiscal year 2023.
Biggest changeNet merchandise sales - constant currency increased 9.1% over the comparable prior year period. • 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%. • Membership income for the fourth quarter of fiscal year 2025 increased 14.9% to $22.6 million over the comparable prior year period. • 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. • Selling, general and administrative expenses increased $16.5 million or 10.1% compared to the fourth quarter of fiscal year 2024, primarily due to investments in technology, such as the RELEX and Elera projects. • 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. • 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. • Our effective tax rate increased in the fourth quarter of fiscal year 2025 to 32.0% from 30.4% in the fourth quarter of fiscal year 2024 primarily due to the impact of foreign exchange transactions and reduced intercompany charges during the quarter. • 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. • 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. 33 Table of Contents Financial highlights for fiscal year 2025 included: • Total revenues increased 7.2% over the prior year. • Net merchandise sales increased 7.7% over the prior year.
To address the inherent risk of operating in a country in which tax legislation changes can significantly impact our low margin business model and in which our ability to successfully appeal the application of these taxes is limited, we have increased prices in this market to offset or partially offset the rise in costs to comply with the annual AMT payment.
To address the inherent risk of operating in a country in which tax legislation changes can significantly impact our business because of our low-margin business model and in which our ability to successfully appeal the application of these taxes is limited, we have increased prices in this market to offset or partially offset the rise in costs to comply with the annual AMT payment.
We base our estimates on historical experience and on other assumptions that management believes to be reasonable under the present circumstances. Using different estimates could have a material impact on our financial condition and results of operations. We believe that the accounting policies described below involve a significant degree of judgment and complexity.
We base our estimates on historical experience and on other assumptions that management believes to be reasonable under the present circumstances. Using different estimates could have a material impact on our financial condition and results of operations. The accounting policies described below involve a significant degree of judgment and complexity.
As of August 31, 2024, we evaluated our deferred tax assets and liabilities and determined that a valuation allowance was necessary for certain deferred tax asset balances, primarily because of the existence of significant negative objective evidence, such as the fact that certain subsidiaries are in a cumulative loss position for the past three years, indicating that certain net operating loss carry-forward periods are not sufficient to realize the related deferred tax assets.
As of August 31, 2025, we evaluated our deferred tax assets and liabilities and determined that a valuation allowance was necessary for certain deferred tax asset balances, primarily because of the existence of significant negative objective evidence, such as the fact that certain subsidiaries are in a cumulative loss position for the past three years, indicating that certain net operating loss carry-forward periods are not sufficient to realize the related deferred tax assets.
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. For fiscal year 2024, some markets, especially Costa Rica, benefited from currency appreciation, which helped offset currency devaluations we experienced in some of the other countries.
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. 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.
For a comparison of the fiscal years ended August 31, 2023 and 2022, 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, 2023 filed with the SEC on October 30, 2023.
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.
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 exchanges 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.
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.
We did not record any impairment charges during fiscal year 2024 related to the loss of legal ownership or title to assets; significant changes in the Company's strategic business objectives or utilization of assets; or the impact of significant negative industry or economic trends.
We did not record any significant impairment charges during fiscal year 2025 related to the loss of legal ownership or title to assets; significant changes in the Company's strategic business objectives or utilization of assets; or the impact of significant negative industry or economic trends.
These and other challenges may persist or become more acute and could have a material adverse effect on our business and results of operations. From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity).
These and other challenges may persist or become more acute and could have a material adverse effect on our business and results of operations. 32 Table of Contents From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity).
This collection mechanism generally leaves us with net VAT and/or income tax receivables, forcing us to process significant refund claims on a recurring basis. These refund or offset processes can take anywhere from several months to several years to complete.
This collection mechanism generally leaves us with net VAT and/or income tax receivables, forcing us to process significant refund claims on a recurring basis. These refund or offset processes can take anywhere from several months to several years to complete, depending on the country.
As of August 31, 2024, we have signed one lease agreement for a facility to be built by the lessor on which construction has not yet commenced. Refer to Part II. "Item 8. Financial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 9 - Commitments and Contingencies" for further discussion. Derivatives Please refer to Part II. “Item 8.
As of August 31, 2025, we have signed one lease agreement for a facility to be built by the lessor which has not yet commenced. Refer to Part II. "Item 8. Financial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 9 - Commitments and Contingencies" for further discussion. Derivatives Please refer to Part II. “Item 8.
While the rules related to refunds of income tax receivables in these countries are unclear and complex, the Company has not placed any type of allowance on the recoverability of the remaining tax receivables or deferred tax assets, because the Company believes that it is more likely than not that it will ultimately succeed in its refund requests.
While the rules related to refunds of income tax receivables in some of the countries where the Company operates are unclear and complex, the Company has not placed any type of allowance on the recoverability of the remaining tax receivables or deferred tax assets, because the Company believes that it is more likely than not that it will ultimately succeed in its refund requests.
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 and, meanwhile, enhance Member experience and engagement. 28 Table of Contents Factors Affecting the Business Overall economic trends, foreign currency exchange volatility, and other factors impacting the business 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.
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. 30 Table of Contents Factors Affecting the Business Overall economic trends, foreign currency exchange volatility, and other factors impacting the business 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.
In addition to relevant GAAP measures, we also provide non-GAAP measures including adjusted net income, adjusted net income per diluted share, adjusted EBITDA, net merchandise sales - constant currency and comparable net merchandise sales - constant currency because management believes these metrics are useful to investors and analysts by excluding items that we do not believe are indicative of our core operating performance.
In addition to relevant GAAP measures, we also provide non-GAAP measures including adjusted EBITDA, net merchandise sales - constant currency and comparable net merchandise sales - constant currency because management believes these metrics are useful to investors and analysts by excluding items that we do not believe are indicative of our core operating performance.
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 exchanges rates. Net merchandise sales - constant currency results exclude the effects of foreign currency translation.
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.
There were no material changes in our uncertain income tax positions for the period ended on August 31, 2024.
There were no material changes in our uncertain income tax positions for the period ended on August 31, 2025.
We operate 54 warehouse clubs in 12 countries and one U.S. territory (ten in Colombia; eight in Costa Rica ; seven in Panama ; six in 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).
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).
Shifts in consumer preferences contributed to the changes in category mix. 36 Table of Contents Comparable Net Merchandise Sales 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.
Shifts in consumer preferences contributed to the changes in category mix. Comparable Net Merchandise Sales 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.
As the Company believes that, in one country where it operates, it should only be ultimately liable for an income-based tax, it has accumulated income tax receivables of $10.9 million and $10.7 million and deferred tax assets of $3.4 million and $3.2 million as of August 31, 2024 and August 31, 2023, respectively, in this country.
As the Company believes that, in one country where it operates, it should only be ultimately liable for an income-based tax, it has accumulated income tax receivables of $10.5 million and $10.9 million and deferred tax assets of $3.9 million and $3.4 million as of August 31, 2025 and August 31, 2024, respectively, in this country.
Events directly or indirectly related to COVID-19 resulted in market and supply-chain disruptions, which increased the complexity of managing our inventory flow and business and resulted in substantial inventory markdowns on certain non-food product categories in the third quarter of fiscal year 2022. In addition, shipping and freight rates increased dramatically during that time.
For example, the COVID-19 pandemic resulted, directly or indirectly, in market and supply-chain disruptions, which increased the complexity of managing our inventory flow and business and resulted in substantial inventory markdowns on certain non-food product categories in the third quarter of fiscal year 2022. In addition, shipping and freight rates increased dramatically during that time.
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 and delivery service transactions. Average ticket represents the amount our Members spend on each visit or PriceSmart.com order.
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.
While supply chains and transportation rates have normalized, we continue to work to hold down and/or mitigate the price increases passed on to our Members while maintaining the right inventory mix to grow sales.
Similar challenges could reoccur in the future. While supply chains and transportation rates have normalized, we continue to work to hold down and/or mitigate price increases passed on to our Members while maintaining the right inventory mix to grow sales.
Our balance as of August 31, 2024 of Trinidad dollar denominated cash and cash equivalents and short and long-term investments measured in U.S. dollars was $60.2 million, a decrease of $40.3 mill ion from the peak of $100.5 million as of November 30, 2020.
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. dollars was $59.7 million, a decrease of $40.8 mill ion from the peak of $100.5 million as of November 30, 2020.
During fiscal year 2024, approximately 79.5% 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.
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.
Currency fluctuations within our Caribbean segment accounted for approximately 70 basis points (0.7%) of negative impact on total comparable merchandise sales for the 52-week period ended September 1, 2024. Our Jamaica and Dominican Republic markets experienced currency devaluation when compared to the same period last year.
Our Dominican Republic and Jamaica markets experienced currency devaluation when compared to the same period last year. Currency fluctuations within our Colombia segment accounted for approximately 70 basis points (0.7%) of negative impact on total comparable net merchandise sales for the 52-week period ended August 31, 2025.
The following table summarizes the equity securities repurchased as part of the Company's stock-based compensation programs during fiscal years 2024, 2023 and 2022: Years Ended August 31, 2024 August 31, 2023 August 31, 2022 Shares repurchased 44,413 99,998 88,415 Cost of repurchase of shares (in thousands) $ 3,512 $ 7,245 $ 6,259 We reissued 3,000 treasury shares as part of our stock-based compensation programs during fiscal year 2024, 6,333 treasury shares during fiscal year 2023 and 8,314 treasury shares during fiscal year 2022.
The following table summarizes the equity securities repurchased as part of the Company's stock-based compensation programs during fiscal years 2025, 2024 and 2023: Years Ended August 31, 2025 August 31, 2024 August 31, 2023 Shares repurchased 72,284 44,413 99,998 Cost of repurchase of shares (in thousands) $ 6,710 $ 3,512 $ 7,245 We reissued 65,000 treasury shares as part of our stock-based compensation programs during fiscal year 2025, 3,000 treasury shares during fiscal year 2024 and 6,333 treasury shares during fiscal year 2023.
Financial highlights for the fourth quarter of fiscal year 2024 included: • Total revenues increased 9.6% over the prior year period. • Net merchandise sales increased 9.5% over the prior year period. We ended the quarter with 54 warehouse clubs compared to 51 warehouse clubs at the end of the fourth quarter of fiscal year 2023.
Financial highlights for the fourth quarter of fiscal year 2025 included: • Total revenues increased 8.6% over the comparable prior year period. • 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.
Years Ended August 31, 2024 August 31, 2023 Amount Change Amount Other expense, net $ (17,607) $ (3,451) $ (14,156) Monetary assets and liabilities denominated in currencies other than the functional currency of the respective entity (primarily U.S. dollars) are revalued to the functional currency using the exchange rate on the balance sheet date.
Years Ended August 31, 2025 August 31, 2024 Amount Change Amount Other expense, net $ (24,636) $ (7,029) $ (17,607) Monetary assets and liabilities denominated in currencies other than the functional currency of the respective entity (primarily U.S. dollars) are revalued to the functional currency using the exchange rate on the balance sheet date.
We have no plans to continue repurchases or adopt a new repurchase plan at this time. However, the Board of Directors could choose to commence another program in the future at its discretion after its review of the Company’s financial performance and anticipated capital requirements.
We have no plans to continue repurchases or adopt a new repurchase plan at this time. However, the Board of Directors could choose to commence another program in the future at its discretion after its review of the Company’s financial performance and anticipated capital requirements. During fiscal year 2025, the Company did not repurchase shares under a share repurchase program.
The following table indicates the comparable net merchandise sales in the reportable segments in which we operate and the percentage changes in net merchandise sales by segment during the 52-week periods ended September 1, 2024 and September 3, 2023 compared to the prior year: 52 Weeks Ended September 1, 2024 September 3, 2023 % Increase in Comparable Net Merchandise Sales % Increase/(Decrease) in Comparable Net Merchandise Sales Central America 7.7 % 10.9 % Caribbean 6.0 5.9 Colombia 12.9 (9.2) Consolidated comparable net merchandise sales 7.7 % 7.1 % 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 September 1, 2024 increased 7.7%.
Therefore, comparable net merchandise sales includes 54 warehouse clubs for the 52- week period ended August 31, 2025 . 37 Table of Contents The following table indicates the comparable net merchandise sales in the reportable segments in which we operate and the percentage changes in net merchandise sales by segment during the 52-week periods ended August 31, 2025 and September 1, 2024 compared to the prior year: Fifty-Two Weeks Ended August 31, 2025 September 1, 2024 % Increase in Comparable Net Merchandise Sales % Increase in Comparable Net Merchandise Sales Central America 5.6 % 7.7 % Caribbean 7.2 6.0 Colombia 11.8 12.9 Consolidated comparable net merchandise sales 6.7 % 7.7 % 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%.
We had 54 clubs in operation as of August 31, 2024 compared to 51 clubs as of August 31, 2023. Net merchandise sales in our Central America segment increased 11.0% during fiscal year 2024. This increase had a 670 basis point (6.7%) positive impact on total net merchandise sales growth.
We had 56 clubs in operation as of August 31, 2025 compared to 54 clubs as of August 31, 2024. 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.
The following tables illustrate the comparable net merchandise sales - constant currency percentage growth and the impact that changes in foreign currency exchange rates had on our comparable merchandise sales percentage growth for the 52-week period ended September 1, 2024: Fifty-Two Weeks Ended September 1, 2024 Comparable Net Merchandise Sales Growth Comparable Net Merchandise Sales - Constant Currency Growth/ (Decline) % Impact of Foreign Currency Exchange Central America 7.7 % 4.7 % 3.0 % Caribbean 6.0 8.4 (2.4) Colombia 12.9 (0.8) 13.7 Consolidated comparable net merchandise sales 7.7 % 5.2 % 2.5 % Overall, the mix of currency fluctuations within our markets had 250 basis points (2.5%) of positive impact on comparable net merchandise sales for the 52-week period ended September 1, 2024.
The following tables illustrate the comparable net merchandise sales - constant currency percentage growth and the impact that changes in foreign currency exchange rates had on our comparable merchandise sales percentage growth for the 52-week period ended August 31, 2025: Fifty-Two Weeks Ended August 31, 2025 Comparable Net Merchandise Sales Growth Comparable Net Merchandise Sales - Constant Currency Growth % Impact of Foreign Currency Exchange Central America 5.6 % 4.9 % 0.7 % Caribbean 7.2 9.0 (1.8) Colombia 11.8 18.0 (6.2) Consolidated comparable net merchandise sales 6.7 % 7.5 % (0.8) % Overall, the mix of currency fluctuations within our markets had 80 basis points (0.8%) of negative impact on comparable net merchandise sales for the 52-week period ended August 31, 2025.
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.
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.
Net Merchandise Sales by Category The following table indicates the approximate percentage of net sales accounted for by each major category of items sold during the fiscal years ended August 31, 2024 and 2023: Years Ended August 31, 2024 2023 Foods & Sundries 49 % 50 % Fresh Foods 30 29 Hardlines 11 11 Softlines 5 5 Food Service and Bakery 4 4 Health Services 1 1 Net Merchandise Sales 100 % 100 % The mix of sales by major category changed slightly.
Net Merchandise Sales by Category The following table indicates the approximate percentage of net sales accounted for by each major category of items sold during the fiscal years ended August 31, 2025 and 2024: Years Ended August 31, 2025 2024 Foods & Sundries 47 % 49 % Fresh Foods 31 30 Hardlines 11 11 Softlines 6 5 Food Service and Bakery 4 4 Health Services 1 1 Net Merchandise Sales 100 % 100 % The mix of sales by major category remained mostly steady year-over-year.
Comparable net merchandise sales in our Colombia segment increased 12.9% for the 52-week period ended September 1, 2024. This increase contributed approximately 130 basis points (1.3%) of positive impact to the increase in total comparable net merchandise sales.
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.
Cash used in operations generally consist of payments to our merchandise vendors, warehouse club and distribution center operating costs (including payroll, employee benefits and utilities), as well as payments for income taxes.
We generate cash from operations primarily through net merchandise sales and membership fees. Cash used in operations generally consist of payments to our merchandise vendors, warehouse club and distribution center operating costs (including payroll, employee benefits and utilities), as well as payments for income taxes.
The economies of many of our markets are dependent on foreign trade, tourism, 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.
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.
Interest Expense Years Ended August 31, 2024 August 31, 2023 Amount Change Amount Interest expense on loans $ 11,544 $ (354) $ 11,898 Interest expense related to hedging activity 2,354 1,149 1,205 Less: Capitalized interest (939) 1,144 (2,083) Interest expense $ 12,959 $ 1,939 $ 11,020 Interest expense reflects borrowings by PriceSmart, Inc. and our wholly owned foreign subsidiaries to finance new land acquisition and construction for new warehouse clubs and distribution centers, warehouse club expansions, the capital requirements of warehouse club and other operations, and ongoing working capital requirements.
Interest Expense Years Ended August 31, 2025 August 31, 2024 Amount Change Amount Interest expense on loans $ 9,853 $ (1,691) $ 11,544 Interest expense related to hedging activity 3,088 734 2,354 Less: Capitalized interest (1,426) (487) (939) Interest expense $ 11,515 $ (1,444) $ 12,959 Interest expense reflects borrowings by PriceSmart, Inc. and our wholly owned foreign subsidiaries to finance new land acquisition and construction for new warehouse clubs and distribution centers, warehouse club expansions, the capital requirements of warehouse club and other operations, and ongoing working capital requirements.
Net merchandise sales - constant currency increased 8.6% over the prior year period. • Comparable net merchandise sales (that is, sales in the 51 warehouse clubs that have been open for greater than 13 ½ calendar months) for the 52 weeks ended September 1, 2024 increased 7.7%.
Net merchandise sales - constant currency increased 8.5% over the prior year. • 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%.
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.
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 uncertainties about tariffs may have an adverse effect on our Company.
Foods & Sundries increased approximately 8% between fiscal year 2024 and 2023 but decreased by 1% as a percent of Net Merchandise Sales. Fresh Foods increased approximately 12% between fiscal year 2024 and 2023 and increased by 1% as a percent of Net Merchandise Sales.
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.
Comparable net merchandise sales in our Caribbean segment increased 6.0% for the 52-week period ended September 1, 2024. This increase contributed approximately 180 basis points (1.8%) of positive impact in total comparable net merchandise sales. Our Jamaica market continued its strong performance in the 52-week period, with 12.2% comparable net merchandise sales growth.
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.
Mission and Business Strategy PriceSmart exists 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.
Purpose 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.
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.
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.
Interest Income Interest income represents the earnings generated from interest-bearing assets held by PriceSmart, Inc. and our wholly owned foreign subsidiaries. These assets include investments in fixed income securities and deposits held with financial institutions. The interest income is derived from the interest payments received on these assets, which serve to enhance our overall financial returns.
These assets include investments in fixed income securities and deposits held with financial institutions. The interest income is derived from the interest payments received on these assets, which serve to enhance our overall financial returns.
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.
Net Merchandise Sales - Constant Currency 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.
If we decide to repatriate cash through the payment of a cash dividend by our foreign subsidiaries to our domestic operations, we will accrue taxes if and when appropriate.
Repatriation of cash and cash equivalents held by foreign subsidiaries may require us to accrue and pay taxes for certain jurisdictions. If we decide to repatriate cash through the payment of a cash dividend by our foreign subsidiaries to our domestic operations, we will accrue taxes if and when appropriate.
Refer to “Management’s Discussion & Analysis – Factors Affecting Our Business” for our quantitative analysis and discussion.
Refer to “Management’s Discussion & Analysis – Factors Affecting Our Business” and "Quantitative and Qualitative Disclosures about Market Risk" for quantitative analysis and discussion.
Although we have seen recent inflationary pressures subsiding, substantial product cost increases and commodity price increases have and could continue to impact our financial results and could lead to reduced sales, fewer units sold, and/or margin pressure.
Inflationary pressures could significantly impact product costs, and commodity price increases have and could again impact our financial results and could lead to reduced sales, fewer units sold, and/or margin pressure.
Currency fluctuations had a $78.4 million, or 300 basis point (3.0%), positive impact on net merchandise sales in our Central America segment for the twelve months ended August 31, 2024. These currency fluctuations contributed approximately 180 basis points (1.8%) of positive impact on total net merchandise sales for fiscal year 2024.
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.
Our policy for classification and presentation of VAT receivables, income tax receivables and other tax receivables is as follows: • Short-term VAT and Income tax receivables, recorded as Other current assets: This classification is used for any countries where our subsidiary has generally demonstrated the ability to recover the VAT or income tax receivable within one year.
There can be no assurance, however, that the Company will be successful in recovering all tax receivables or deferred tax assets. 50 Table of Contents Our policy for classification and presentation of VAT receivables, income tax receivables and other tax receivables is as follows: • Short-term VAT and Income tax receivables, recorded as Prepaid expenses and other current assets: This classification is used for any countries where our subsidiary has generally demonstrated the ability to recover the VAT or income tax receivable within one year.
Currency fluctuations within our Central America segment accounted for approximately 180 basis points (1.8%) of positive impact on total comparable merchandise sales for the 52-week period ended September 1, 2024. Our Costa Rica market was the main contributor as the market experienced currency appreciation when compared to the same period last year.
Our Costa Rica market was the main contributor as the market experienced currency appreciation when compared to the same period last year. 38 Table of Contents Currency fluctuations within our Caribbean segment accounted for approximately 50 basis points (0.5%) of negative impact on total comparable merchandise sales for the 52-week period ended August 31, 2025.
As a result, sales related to three of our clubs opened during fiscal year 2024 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 51 warehouse clubs for the 52- week period ended September 1, 2024 .
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.
Net merchandise sales in our Caribbean segment increased 6.4% during fiscal year 2024. This increase had a 190 basis point (1.9%) positive impact on total net merchandise sales growth. All of our markets in this segment had positive net merchandise sales growth. Net merchandise sales in our Colombia segment increased 26.4% during fiscal year 2024.
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. Net merchandise sales in our Colombia segment increased 11.4% during fiscal year 2025. This increase had a 130 basis point (1.3 %) positive impact on total net merchandise sales gro wth.
Provision for Income Taxes The tables below summarize the effective tax rate for the periods reported: Years Ended August 31, 2024 August 31, 2023 Amount Change Amount Current tax expense $ 66,701 $ 3,458 $ 63,243 Net deferred tax benefit (4,083) (791) (3,292) Provision for income taxes $ 62,618 $ 2,667 $ 59,951 Effective tax rate 31.1 % 35.4 % For fiscal year 2024, the effective tax rate was 31.1% compared to 35.4% for fiscal year 2023.
Provision for Income Taxes The tables below summarize the effective tax rate for the periods reported: Years Ended August 31, 2025 August 31, 2024 Amount Change Amount Current tax expense $ 62,800 $ (3,901) $ 66,701 Net deferred tax benefit (4,183) (100) (4,083) Provision for income taxes $ 58,617 $ (4,001) $ 62,618 Effective tax rate 28.4 % 31.1 % For fiscal year 2025, the effective tax rate was 28.4% compared to 31.1% for fiscal year 2024.
Civil unrest in Colombia in response to tax reform and austerity measures paralyzed significant portions of the country’s infrastructure as roadblocks and riots disrupted normal economic activity during the third quarter of fiscal year 2021. Our operations are subject to volatile weather conditions and natural disasters.
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. Our operations are subject to volatile weather conditions and natural disasters.
Net cash provided by operating activities decreased primarily due to shifts in working capital resulting from changes in our merchandise inventory and accounts payable positions, which contributed $58.0 million to the overall decrease.
Net cash provided by operating activities increased primarily due to a net change in our various operating assets and liabilities which contributed $19.4 million. Shifts in working capital resulting from changes in our merchandise inventory and accounts payable positions contributed $17.7 million to the overall increase.
These currency fluctuations contributed approximately 70 basis points (0.7%) 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.
These currency fluctuations contributed approximately 70 basis points (0.7%) of negative impact on total net merchandise sales for the current fiscal year period.
Currency fluctuations within our Colombia segment accounted for approximately 140 basis points (1.4%) of positive impact on total comparable net merchandise sales for the 52-week period ended September 1, 2024.
Currency fluctuations within our Central America segment accounted for approximately 40 basis points (0.4%) of positive impact on total comparable merchandise sales for the 52-week period ended August 31, 2025.
The consolidated increase in membership income is primarily due to the $5 increase to our membership fee in all but one market during fiscal year 2024 and an increase in the membership base since the prior year. In our Central America segment, membership income increased compared to fiscal year 2023, attributable to the opening of two new clubs.
In our Central America segment, membership income increased compared to fiscal year 2024, primarily attributable to the $5 increase and the opening of two new clubs. In our Colombia segment, membership income rose compared to fiscal year 2024 due to an increase in membership accounts.
Therefore, for the twelve-month period ended August 31, 2024 and August 31, 2023, we have recorded valuation allowances of $12.5 million and $12.6 million against our foreign tax credits, respectively.
We expect foreign tax credits generated to exceed U.S. income tax liability for the foreseeable future. Therefore, for the twelve-month period ended August 31, 2025 and August 31, 2024, we have recorded valuation allowances of $7.0 million and $12.5 million against our foreign tax credits, respectively.
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. Roadblocks in Guatemala in October 2023 relating to election protests also limited access to certain of our warehouse clubs.
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.
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. 34 Table of Contents Comparison of Fiscal Year 2024 to 2023 The following discussion and analysis compares the results of operations for the fiscal years ended August 31, 2024 and 2023 and should be read in conjunction with the consolidated financial statements and the accompanying notes included elsewhere in this report.
Comparison of Fiscal Year 2025 to 2024 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.
The preparation of our consolidated financial statements requires that management make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.” 48 Table of Contents Critical Accounting Estimates The preparation of our consolidated financial statements requires that management make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
Capital Expenditures Capital expenditures were $168.5 million for the year ended August 31, 2024, of which the mix between maintenance and growth expenditures were $72.3 million and $96.2 million, respectively. Capital expenditures for fiscal year 2023 were $142.5 million, of which the mix between maintenance and growth expenditures were $69.3 million and $73.2 million, respectively.
Capital Expenditures Capital expenditures were $158.1 million for the year ended August 31, 2025, with maintenance and growth expenditures of $82.1 million and $76.0 million, respectively. Capital expenditures for fiscal year 2024 were $168.5 million, with maintenance and growth expenditures of $72.3 million and $96.2 million, respectively.
Membership income increased 13.9% compared to the prior year. Membership income increased in all of our segments in the twelve months ended August 31, 2024.
Membership income increased 13.7% compared to the prior year. Membership income, which is recognized ratably over the 12-month term of the membership, increased in all of our segments in the twelve months ended August 31, 2025.
Loss on disposal of assets recorded during the years reported resulted from improvements to operations and normal preventive maintenance. Seasonality Historically, our merchandising businesses have experienced holiday retail seasonality in their markets.
Loss on disposal of assets recorded during the years reported resulted from improvements to operations and normal preventive maintenance.
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. 29 Table of Contents Our operations depend on shipping, trucking, ports and other elements of the supply chain that often rely on unionized labor.
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. 31 Table of Contents At times we face difficulties in the shipment of, and the risks inherent in the importation of, merchandise to our warehouse clubs.
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 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. 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.
Years Ended August 31, 2024 August 31, 2023 Amount Increase from prior year % Change Amount Miscellaneous income $ 13,684 $ 2,511 22.5 % $ 11,173 Rental income 2,417 243 11.2 2,174 Other revenue $ 16,101 $ 2,754 20.6 % $ 13,347 Comparison of Fiscal Year 2024 to 2023 The primary driver of the increase in other revenue for the year ended August 31, 2024 was an increase in Miscellaneous income driven primarily by an increase in incentive fee revenue due to Members having higher average outstanding balances on our co-branded credit cards compared to the prior year. 40 Table of Contents Results of Operations Years Ended Results of Operations Consolidated August 31, 2024 August 31, 2023 (Amounts in thousands, except percentages and number of warehouse clubs) Net merchandise sales Net merchandise sales $ 4,783,119 $ 4,300,706 Total gross margin $ 753,629 $ 678,352 Total gross margin percentage 15.8% 15.8% Revenues Total revenues $ 4,913,898 $ 4,411,842 Percentage change from prior period 11.4% 8.5% Comparable net merchandise sales Total comparable net merchandise sales increase 7.7% 7.1% Total revenue margin Total revenue margin $ 846,924 $ 759,331 Total revenue margin percentage 17.2% 17.2% Selling, general and administrative Selling, general and administrative $ 625,980 $ 574,815 Selling, general and administrative percentage of total revenues 12.7% 13.0% Operational data Warehouse clubs at period end 54 51 Warehouse club sales floor square feet at period end 2,646 2,524 Years Ended Results of Operations Consolidated August 31, 2024 % of Total Revenue August 31, 2023 % of Total Revenue Operating income by segment Central America $ 227,986 4.6 % $ 191,721 4.3 % Caribbean 95,642 1.9 87,223 2.0 Colombia 15,231 0.3 15,467 0.4 United States 24,868 0.5 29,844 0.7 Reconciling Items (1) (142,783) (2.8) (139,739) (3.2) Operating income - Total $ 220,944 4.5 % $ 184,516 4.2 % (1) The reconciling items reflect the amount eliminated upon consolidation of intersegment transactions. 41 Table of Contents The following table summarizes the selling, general and administrative expense for the periods disclosed: Years Ended August 31, 2024 % of Total Revenue August 31, 2023 % of Total Revenue Warehouse club and other operations $ 466,457 9.5 % $ 417,272 9.4 % General and administrative 156,385 3.2 134,783 3.1 Reserve for AMT settlement — — 7,179 0.2 Separation costs associated with Chief Executive Officer departure — — 7,747 0.2 Pre-opening expenses 970 — 1,432 — Asset impairment and closure costs — — 5,658 0.1 Loss on disposal of assets 2,168 — 744 — Total Selling, general and administrative $ 625,980 12.7 % $ 574,815 13.0 % Total gross margin is derived from our Revenue – Net merchandise sales less our Cost of goods sold – Net merchandise sales and represents our sales and cost of sales generated from the business activities of our warehouse clubs.
Years Ended August 31, 2025 August 31, 2024 Amount Increase from prior year % Change Amount Miscellaneous income $ 15,202 $ 1,518 11.1 % $ 13,684 Rental income 2,964 547 22.6 2,417 Other revenue $ 18,166 $ 2,065 12.8 % $ 16,101 Comparison of Fiscal Year 2025 to 2024 The primary driver of the increase in other revenue for the year ended August 31, 2025 was an increase in Miscellaneous income driven primarily by an increase in interest-generating portfolio revenue due to Members having higher average outstanding balances on our co-branded credit cards compared to the prior year. 40 Table of Contents Results of Operations Years Ended Results of Operations Consolidated August 31, 2025 August 31, 2024 (Amounts in thousands, except percentages and number of warehouse clubs) Net merchandise sales Net merchandise sales $ 5,151,120 $ 4,783,119 Total gross margin $ 809,762 $ 753,629 Total gross margin percentage 15.7% 15.8% Revenues Total revenues $ 5,270,094 $ 4,913,898 Percentage change from prior period 7.2% 11.4% Comparable net merchandise sales Total comparable net merchandise sales increase 6.7% 7.7% Total revenue margin Total revenue margin $ 914,372 $ 846,924 Total revenue margin percentage 17.4% 17.2% Selling, general and administrative Selling, general and administrative $ 681,862 $ 625,980 Selling, general and administrative percentage of total revenues 12.9% 12.7% Operational data Warehouse clubs at period end 56 54 Warehouse club sales floor square feet at period end 2,732 2,646 Years Ended Results of Operations Consolidated August 31, 2025 % of Total Revenue August 31, 2024 % of Total Revenue Operating income by segment Central America $ 216,588 4.1 % $ 183,486 3.7 % Caribbean 89,036 1.7 74,875 1.5 Colombia 28,588 0.5 15,335 0.3 United States (18,401) (0.3) 22,306 0.5 Reconciling Items (1) (83,301) (1.6) (75,058) (1.5) Operating income - Total $ 232,510 4.4 % $ 220,944 4.5 % (1) The reconciling items reflect the amount eliminated upon consolidation of intersegment transactions. 41 Table of Contents The following table summarizes the selling, general and administrative expense for the periods disclosed: Years Ended August 31, 2025 % of Total Revenue August 31, 2024 % of Total Revenue Warehouse club and other operations $ 498,409 9.5 % $ 466,457 9.5 % General and administrative 179,859 3.4 156,385 3.2 Pre-opening expenses 1,127 — 970 — Loss on disposal of assets 2,467 — 2,168 — Total Selling, general and administrative $ 681,862 12.9 % $ 625,980 12.7 % Total gross margin is derived from our Revenue – Net merchandise sales less our Cost of goods sold – Net merchandise sales and represents our sales and cost of sales generated from the business activities of our warehouse clubs.
However, these non-GAAP financial measures should not be reviewed in isolation or considered as an alternative to any other performance measure derived in accordance with GAAP and may not be comparable to similarly titled measures used by other companies in our industry or across different industries. 32 Table of Contents Adjusted Net Income and Adjusted Net Income per Diluted Share Adjusted net income and adjusted net income per diluted share metrics are important measures used by management to compare the performance of our core operations results between periods.
However, these non-GAAP financial measures should not be reviewed in isolation or considered as an alternative to any other performance measure derived in accordance with GAAP and may not be comparable to similarly titled measures used by other companies in our industry or across different industries. 34 Table of Contents Adjusted EBITDA Adjusted EBITDA is defined as net income before interest expense, provision for income taxes and depreciation and amortization, adjusted for the impact of certain other items, including interest income and; other income (expense), net.
Following the implementation of certain tax optimization initiatives at the end of fiscal year 2024, we expect a decrease in the effective tax rate by approximately 2-4% in fiscal year 2025. 44 Table of Contents Other Comprehensive Income (Loss) Other comprehensive income (loss) for fiscal years 2024 and 2023 resulted primarily from foreign currency translation adjustments related to assets and liabilities and the translation of the statements of income related to revenue, costs and expenses of our subsidiaries whose functional currency is not the U.S. dollar.
Other Comprehensive Income (Loss) Other comprehensive income (loss) for fiscal years 2025 and 2024 resulted primarily from foreign currency translation adjustments related to assets and liabilities and the translation of the statements of income related to revenue, costs and expenses of our subsidiaries whose functional currency is not the U.S. dollar.
“Item 8. Financial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 11 - Debt” for further discussion. Future Lease and Other Commitments We place a strong emphasis on managing future lease commitments related to various facilities and equipment that support our operations. We believe our current liquidity and cash flow projections can cover future lease commitments.
Future Lease and Other Commitments We place a strong emphasis on managing future lease commitments related to various facilities and equipment that support our operations. Based on our current liquidity and cash flow projections, we believe we will have sufficient cash to cover future lease commitments.
The Company consults and evaluates with legal and tax advisors regularly to understand the strength of its legal arguments and probability of successful outcomes in addition to its own experience handling these complex tax issues.
The Company’s various outstanding VAT receivables and/or income tax receivables are based on individual procedures or appeals with their own set of facts and circumstances. The Company consults with legal and tax advisors regularly to understand the strength of its legal arguments and probability of successful outcomes in addition to its own experience handling these complex tax issues.
However, during fiscal year 2023, the currency in Colombia devalued approximately 15%, but we held pricing steady or took pricing actions to mitigate declines in demand that negatively impacted our consolidated Total Gross Margin rate. 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.
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.
In total, selling, general and administrative expenses increased $51.2 million compared to the prior year, and decreased as a percentage of total revenues 30 basis points (0.3%) to 12.7% of total revenues for fiscal year 2024 compared to 13.0% of total revenues for fiscal year 2023 offset, in part, by our Interim Chief Executive Officer's election not to receive compensation.
In total, selling, general and administrative expenses increased $55.9 million compared to the prior year, and increased as a percentage of total revenues by 20 basis points (0.2%) to 12.9% of total revenues for fiscal year 2025 compared to 12.7% of total revenues for fiscal year 2024.
Our cash flows are summarized as follows (in thousands): Years Ended August 31, 2024 August 31, 2023 Change Net cash provided by operating activities $ 207,589 $ 257,331 $ (49,742) Net cash used in investing activities (175,450) (222,082) 46,632 Net cash used in financing activities (150,026) (41,055) (108,971) Effect of exchange rates 1,996 6,635 (4,639) Net increase (decrease) in cash, cash equivalents $ (115,891) $ 829 $ (116,720) Net cash provided by operating activities totaled $207.6 million and $257.3 million for the twelve months ended August 31, 2024 and 2023, respectively.
Our cash flows are summarized as follows (in thousands): Years Ended August 31, 2025 August 31, 2024 Change Net cash provided by operating activities $ 261,307 $ 207,589 $ 53,718 Net cash used in investing activities (128,881) (175,450) 46,569 Net cash provided by (used in) financing activities 14,198 (150,026) 164,224 Effect of exchange rates 2,356 1,996 360 Net increase (decrease) in cash, cash equivalents $ 148,980 $ (115,891) $ 264,871 Net cash provided by operating activities totaled $261.3 million and $207.6 million for the twelve months ended August 31, 2025 and 2024, respectively.
We express our Total gross margin percentage as a percentage of our Net merchandise sales. On a consolidated basis, total gross margin as a percent of net merchandise sales for the twelve months ended August 31, 2024 was 15.8%, unchanged from the prior year.
We express our Total gross margin percentage as a percentage of our Net merchandise sales. On a consolidated basis, total gross margin as a percent of net merchandise sales for fiscal year 2025 decreased to 15.7% compared to 15.8% for fiscal year 2024.
The following table summarizes the cash and cash equivalents, including restricted cash, held by our foreign subsidiaries and domestically (in thousands): August 31, 2024 August 31, 2023 Amounts held by foreign subsidiaries $ 121,580 $ 139,050 Amounts held domestically 14,731 113,152 Total cash and cash equivalents, including restricted cash $ 136,311 $ 252,202 45 Table of Contents The following table summarizes the short-term investments held by our foreign subsidiaries and domestically (in thousands): August 31, 2024 August 31, 2023 Amounts held by foreign subsidiaries $ 100,165 $ 74,294 Amounts held domestically — 16,787 Total short-term investments $ 100,165 $ 91,081 As of August 31, 2024 and August 31, 2023, there were no certificates of deposit with a maturity of over one year held by our foreign subsidiaries or domestically.
The following table summarizes the cash and cash equivalents, including restricted cash, held by our foreign subsidiaries and domestically (in thousands): August 31, 2025 August 31, 2024 Amounts held by foreign subsidiaries $ 222,770 $ 121,580 Amounts held domestically 62,521 14,731 Total cash and cash equivalents, including restricted cash $ 285,291 $ 136,311 The following table summarizes the short-term investments held by our foreign subsidiaries and domestically (in thousands): August 31, 2025 August 31, 2024 Amounts held by foreign subsidiaries $ 73,186 $ 100,165 Amounts held domestically — — Total short-term investments $ 73,186 $ 100,165 As of August 31, 2025 and August 31, 2024, there were no certificates of deposit with a maturity of over one year held by our foreign subsidiaries or domestically. 45 Table of Contents From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity).
We are working with our banks in Trinidad and government officials to convert all of our Trinidad dollars into tradable currencies. For instance, during fiscal year 2021, we experienced significant limitations on our ability to convert Trinidad dollars to U.S. dollars or other tradable currencies.
We are working with our banks in Trinidad and government officials to convert all of our Trinidad dollars into tradable currencies.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe weighted-average variable rates are based upon prevailing market interest rates and the outstanding balances as of August 31, 2024. 52 Table of Contents Annual maturities of long-term debt and derivatives are as follow (in thousands): Twelve Months Ended August 31, (Amounts in thousands) 2025 2026 2027 2028 2029 Thereafter Total Long-Term Debt (Unhedged): Long-term debt with fixed interest rate $ 12,786 $ 9,681 $ 6,386 $ 13,176 $ 3,770 $ 10,677 $ 56,476 (1) Weighted-average interest rate 6.40 % 6.40 % 6.20 % 6.20 % 6.70 % 6.70 % 6.40 % Long-term debt with variable interest rate $ 23,131 $ 8,781 $ 26,818 $ 620 $ 676 $ 13,858 $ 73,884 Weighted-average interest rate 5.60 % 4.70 % 3.90 % 4.40 % 4.40 % 4.40 % 4.80 % Total long-term debt $ 35,917 $ 18,462 $ 33,204 $ 13,796 $ 4,446 $ 24,535 $ 130,360 (1) Derivatives: Interest Rate Swaps: Variable to fixed interest $ 1,518 $ 1,804 $ 26,818 $ 620 $ 676 $ 13,858 $ 45,294 (2) Weighted-average pay rate 3.78 % 3.88 % 3.67 % 4.43 % 4.43 % 4.43 % Weighted-average receive rate 6.72 % 6.50 % 6.94 % 5.34 % 5.34 % 5.34 % Cross-Currency Interest Rate Swaps: Variable to fixed interest $ 19,770 $ — $ — $ — $ — $ — $ 19,770 (2) Weighted-average pay rate 7.92 % — % — % — % — % — % Weighted-average receive rate 7.59 % — % — % — % — % — % Long-Term Debt Payments with Fixed Interest or Subject to Financial Derivatives: Long-term debt with fixed interest rate or with variable to fixed interest rate swaps $ 34,074 $ 11,485 $ 33,204 $ 13,796 $ 4,446 $ 24,535 $ 121,540 Portion of long-term debt with fixed interest rate or with variable to fixed interest rate swaps 94.9 % 62.2 % 100.0 % 100.0 % 100.0 % 100.0 % 93.2 % Portion of long-term debt with variable interest rates and no swaps 5.1 % 37.8 % — % — % — % — % 6.8 % (1) The Company has disclosed the future annual maturities of long-term debt, for which it has entered into cross-currency interest rate swaps by using the derivative obligation as of August 31, 2024 to estimate the future commitments.
Biggest changeAnnual maturities of long-term debt and derivatives are as follows (in thousands): Twelve Months Ended August 31, (Amounts in thousands) 2026 2027 2028 2029 2030 Thereafter Total Long-Term Debt (Unhedged): Long-term debt with fixed interest rate $ 27,207 $ 22,640 $ 25,282 $ 15,113 $ 830 $ — $ 91,072 (1) Weighted-average interest rate 7.80 % 7.80 % 7.80 % 7.30 % 7.50 % — % 7.70 % Long-term debt with variable interest rate $ 11,468 $ 30,778 $ 7,155 $ 2,821 $ 2,899 $ 40,404 $ 95,525 Weighted-average interest rate 5.40 % 5.40 % 6.10 % 6.40 % 6.40 % 6.40 % 5.90 % Total long-term debt $ 38,675 $ 53,418 $ 32,437 $ 17,934 $ 3,729 $ 40,404 $ 186,597 (1) Derivatives: Interest Rate Swaps: Variable to fixed interest $ 1,981 $ 27,046 $ 1,044 $ 1,121 $ 1,199 $ 23,965 $ 56,356 (2) Weighted-average pay rate 3.93 % 3.67 % 4.34 % 4.34 % 4.34 % 4.23 % 3.96 % Weighted-average receive rate 5.51 % 6.11 % 4.33 % 4.33 % 4.33 % 4.34 % 5.23 % Long-Term Debt Payments with Fixed Interest or Subject to Financial Derivatives: Long-term debt with fixed interest rate or with variable to fixed interest rate swaps $ 29,188 $ 49,686 $ 26,326 $ 16,234 $ 2,029 $ 23,965 $ 147,428 Portion of long-term debt with fixed interest rate or with variable to fixed interest rate swaps 75.5 % 93.0 % 81.2 % 90.5 % 54.4 % 59.3 % 79.0 % Portion of long-term debt with variable interest rates and no swaps 24.5 % 7.0 % 18.8 % 9.5 % 45.6 % 40.7 % 21.0 % (1) The Company has disclosed the future annual maturities of long-term debt as of August 31, 2025.
Financial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 13 - Derivative Instruments and Hedging Activities.” Information about the movements in currency exchange rates and the related impact on the translation of the balance sheets of our subsidiaries whose functional currency is not the U.S. dollar for the twelve-month period ended August 31, 2024 is disclosed in “Item 7.
Financial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 13 - Derivative Instruments and Hedging Activities.” Information about the movements in currency exchange rates and the related impact on the translation of the balance sheets of our subsidiaries whose functional currency is not the U.S. dollar for the twelve-month period ended August 31, 2025 is disclosed in “Item 7.
Management’s Discussion & Analysis – Other Comprehensive Income (Loss).” Each market risk sensitivity analysis presented below is based on hypothetical scenarios used to calibrate potential risk and do not represent our view of future market changes. The effect of a change in a particular assumption is calculated without adjusting any other assumption.
Management’s Discussion & Analysis – Other Comprehensive Income (Loss).” Each market risk sensitivity analysis presented below is based on hypothetical scenarios used to calibrate potential risk and does not represent our view of future market changes. The effect of a change in a particular assumption is calculated without adjusting any other assumption.
We may enter into additional foreign countries in the future or open additional locations in existing countries, which may increase the percentage of net merchandise sales denominated in foreign currencies. 53 Table of Contents Currency exchange rate changes either increase or decrease the cost of imported products that we purchase in U.S. dollars and price in local currency.
We may enter into additional foreign countries in the future or open additional locations in existing countries, which may increase the percentage of net merchandise sales denominated in foreign currencies. 52 Table of Contents Currency exchange rate changes either increase or decrease the cost of imported products that we purchase in U.S. dollars and price in local currency.
Information about the change in the fair value of our hedges and the financial impact thereof for the twelve-month period ended August 31, 2024 is disclosed in Part II. “Item 8.
Information about the change in the fair value of our hedges and the financial impact thereof for the twelve-month period ended August 31, 2025 is disclosed in Part II. “Item 8.
Information about the financial impact of foreign currency exchange rate fluctuations for the twelve months ended August 31, 2024 is disclosed in Part II. “Item 7.
Information about the financial impact of foreign currency exchange rate fluctuations for the twelve months ended August 31, 2025 is disclosed in Part II. “Item 7.
The following tables summarize by country, for those countries with functional currencies other than the U.S. dollar, the weakening of the countries' currency against the U.S. dollar (devaluation) or the strengthening of their currencies (revaluation): Country Revaluation/(Devaluation) Twelve Months Ended August 31, 2024 2023 % Change % Change Colombia (1.84) % 7.15 % Costa Rica 3.25 18.30 Dominican Republic (5.23) (7.06) Guatemala 1.81 (1.72) Honduras (0.62) (0.48) Jamaica (2.11) (2.29) Nicaragua (0.33) (1.42) Trinidad (0.01) % (0.09) % We seek to manage foreign exchange risk by (1) adjusting prices on goods acquired in U.S. dollars on a periodic basis to maintain our target margins after taking into account changes in exchange rates; (2) obtaining local currency loans from banks within certain markets where it is economical to do so and where management believes the risk of devaluation and the level of U.S. dollar denominated liabilities warrants this action; (3) reducing the time between the acquisition of product in U.S. dollars and the settlement of that purchase in local currency; (4) maintaining a balance between assets held in local currency and in U.S. dollars; and (5) entering into cross-currency interest rate swaps and forward currency derivatives.
The following tables summarize by country, for those countries with functional currencies other than the U.S. dollar, the weakening of the countries' currency against the U.S. dollar (devaluation) or the strengthening of their currencies (revaluation): Country Revaluation/(Devaluation) Twelve Months Ended August 31, 2025 2024 % Change % Change Colombia 3.41 % (1.84) % Costa Rica 2.68 3.25 Dominican Republic (5.63) (5.23) Guatemala 0.88 1.81 Honduras (5.15) (0.62) Jamaica (1.76) (2.11) Nicaragua — (0.33) Trinidad 0.09 % (0.01) % We seek to manage foreign exchange risk by (1) adjusting prices on goods acquired in U.S. dollars on a periodic basis to maintain our target margins after taking into account changes in exchange rates; (2) obtaining local currency loans from banks within certain markets where it is economical to do so and where management believes the risk of devaluation and the level of U.S. dollar denominated liabilities warrants this action; (3) reducing the time between the acquisition of product in U.S. dollars and the settlement of that purchase in local currency; (4) maintaining a balance between assets held in local currency and in U.S. dollars; and (5) entering into cross currency interest rate swaps and forward currency derivatives.
Approximately 49.0% of our net merchandise sales are comprised of products we purchased in U.S. dollars that were sold in countries whose currencies were other than the U.S. dollar. Approximately 79.5% of our net merchandise sales are in markets whose functional currency is other than the U.S. dollar.
Approximately 49.0% of our net merchandise sales are comprised of products we purchased in U.S. dollars that were sold in countries whose currencies were other than the U.S. dollar. Approximately 80.1% of our net merchandise sales are in markets whose functional currency is other than the U.S. dollar.
Conversely, a hypothetical 10% appreciation in the currency exchange rates underlying these swaps from the market rates at August 31, 2024 would have resulted in a net decrease in the value of the swaps of approximately $3.3 million. 55 Table of Contents From time to time, we use non-deliverable forward foreign exchange contracts primarily to address exposure to U.S. dollar merchandise inventory expenditures made by our international subsidiaries whose functional currency is other than the U.S. dollar.
Conversely, a hypothetical 10% appreciation in the currency exchange rates underlying these swaps from the market rates at August 31, 2025 would have resulted in a further decrease in the value of the swaps of approximately $4.1 million. 54 Table of Contents From time to time, we use non-deliverable forward foreign exchange contracts primarily to address exposure to U.S. dollar merchandise inventory expenditures made by our international subsidiaries whose functional currency is other than the U.S. dollar.
We have local-currency-denominated long-term loans in Barbados, Honduras, Guatemala, and Trinidad and we have cross-currency interest rate swaps in Colombia. Turbulence in the currency markets can have a significant impact on the value of the foreign currencies within the countries in which we operate.
We have local-currency-denominated long-term loans in Barbados, Honduras, Guatemala, and Trinidad. Turbulence in the currency markets can have a significant impact on the value of the foreign currencies within the countries in which we operate.
Management’s Discussion and Analysis – Other Expense, net.” Examples of where we have significant U.S. dollar net asset positions subjecting us to exchange rate losses if the local currency strengthens against the U.S. dollar are our Costa Rica and Nicaragua subsidiaries, with balances of $73.5 million, and $36.9 million, respectively, as of August 31, 2024.
Management’s Discussion and Analysis – Other Expense, net.” Examples of where we have significant U.S. dollar net asset positions subjecting us to exchange rate losses if the local currency strengthens against the U.S. dollar are our Costa Rica, Nicaragua and Honduras subsidiaries, with balances of $87.9 million, $42.6 million, and $1.1 million, respectively, as of August 31, 2025.
The aggregate fair value of these swaps was in a net asset position of approximately $1.3 million at August 31, 2024 and approximately $2.3 million at August 31, 2023.
The aggregate fair value of these swaps was in a net liability position of approximately $5.4 million at August 31, 2025 and a net asset position of approximately $1.3 million at August 31, 2024.
A hypothetical 10% devaluation in the currency exchange rates underlying these swaps from the market rates at August 31, 2024 would have resulted in a further increase in the value of the swaps of approximately $4.4 million.
A hypothetical 10% devaluation in the currency exchange rates underlying these swaps from the market rates at August 31, 2025 would have resulted in an increase in the value of the swaps of approximately $5.2 million.
Examples where we have significant U.S. dollar net liability positions subjecting us to exchange rate losses if the local currency weakens against the U.S. dollar are our Honduras, Guatemala, Dominican Republic, and Trinidad subsidiaries, with balances of $28.3 million, $23.9 million, $13.0 million, and $11.0 million, respectively, as of August 31, 2024.
Examples where we have significant U.S. dollar net liability positions subjecting us to exchange rate losses if the local currency weakens against the U.S. dollar are our Guatemala, Trinidad, and Dominican Republic subsidiaries, with balances of $60.2 million, $16.0 million, and $10.2 million, respectively, as of August 31, 2025.
The table below provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the table represents the principal cash flows and related weighted-average interest rates by expected maturity dates.
The notional amounts and interest payments of these swaps match the terms of the associated debt. 51 Table of Contents The table below provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the table represents the principal cash flows and related weighted-average interest rates by expected maturity dates.
Due to the mix of foreign currency exchange rate fluctuations during fiscal year 2024, the impact to the consolidated statements of income of revaluing the monetary liabilities for these leases was immaterial. 54 Table of Contents The following table discloses the net effect on other expense, net for U.S. dollar-denominated and other foreign-denominated accounts relative to a hypothetical simultaneous currency revaluation based on balances as of August 31, 2024 (in thousands) including the lease-related monetary liabilities described above: Overall weighted negative currency movement Losses based on change in U.S. dollar denominated and other foreign denominated cash, cash equivalents and restricted cash balances Gains based on change in U.S. dollar denominated inter-company balances Gains based on change in U.S. dollar denominated other asset/liability balances Net Loss (1) 5% $ (372) $ 1,616 $ (1,680) $ (436) 10% $ (744) $ 3,232 $ (3,360) $ (872) 20% $ (1,488) $ 6,463 $ (6,721) $ (1,746) (1) Amounts are before consideration of income taxes.
Due to the mix of foreign currency exchange rate fluctuations during fiscal year 2025, the impact to the consolidated statements of income of revaluing the monetary liabilities for these leases was immaterial. 53 Table of Contents The following table discloses the net effect on other expense, net for U.S. dollar-denominated and other foreign-denominated accounts relative to a hypothetical simultaneous currency revaluation based on balances as of August 31, 2025 (in thousands) including the lease-related monetary liabilities described above: Overall weighted negative currency movement Losses based on change in U.S. dollar denominated and other foreign denominated cash, cash equivalents and restricted cash balances Gains based on change in U.S. dollar denominated inter-company balances Gains based on change in U.S. dollar denominated other asset/liability balances Net Loss (1) 5% $ (1,827) $ 12 $ 839 $ (976) 10% $ (3,655) $ 24 $ 1,678 $ (1,953) 20% $ (7,310) $ 48 $ 3,355 $ (3,907) (1) Amounts are before consideration of income taxes.
The monetary liability for these leases as of August 31, 2024 was $31.5 million.
The monetary liability for these leases as of August 31, 2025 was $52.7 million.
We have mitigated a portion of our interest rate risk by managing the mix of fixed and variable rate debt and by entering into interest rate swaps and cross-currency interest rate swaps to hedge interest rate risk. The notional amount, interest payment and maturity dates of the swap match the terms of the associated debt.
We have mitigated a portion of our interest rate risk by managing the mix of fixed and variable rate debt and by entering into interest rate swaps to hedge interest rate risk.
For interest rate swaps, including cross-currency interest rate swaps, the table represents the contractual cash flows and weighted-average interest rates by the contractual maturity date, unless otherwise noted. The notional amounts are used to calculate contractual cash flows to be exchanged under the contracts.
For interest rate swaps, the table represents the contractual cash flows and weighted-average interest rates by the contractual maturity date, unless otherwise noted. The notional amounts are used to calculate contractual cash flows to be exchanged under the contracts. The weighted-average variable rates are based upon prevailing market interest rates and the outstanding balances as of August 31, 2025.
Foreign Currency Risk We have foreign currency risks related to sales, operating expenses and financing transactions in currencies other than the U.S. dollar. As of August 31, 2024, we had a total of 54 consolidated warehouse clubs operating in 12 foreign countries and one U.S. territory, 42 of which operate under currencies other than the U.S. dollar.
As of August 31, 2025, we had a total of 56 consolidated warehouse clubs operating in 12 foreign countries and one U.S. territory, 44 of which operate under currencies other than the U.S. dollar.
The following table discloses the net effect on other comprehensive loss for these local currency denominated accounts relative to hypothetical simultaneous currency devaluation in all the countries listed in the table above, based on balances as of August 31, 2024: Overall weighted negative currency movement Other comprehensive loss on the decline in local currency denominated cash and cash equivalents and restricted cash (in thousands) Other comprehensive gain on the decline in foreign currency denominated debt obligations (in thousands) Other comprehensive loss on the decline in all other foreign currency denominated current assets net of current liabilities (in thousands) Other comprehensive loss on the decline in all other foreign currency denominated long-term assets net of long-term liabilities (in thousands) 5% $ 4,642 $ (3,812) $ 7,610 $ 32,469 10% $ 9,284 $ (7,625) $ 15,219 $ 64,939 20% $ 18,568 $ (15,249) $ 30,438 $ 129,877 In addition, we are exposed to foreign currency exchange rate fluctuations associated with our U.S. dollar-denominated debt obligations that we hedge.
The following table discloses the net effect on other comprehensive loss for these local currency denominated accounts relative to hypothetical simultaneous currency devaluation in all the countries listed in the table above, based on balances as of August 31, 2025: Overall weighted negative currency movement Other comprehensive loss on the decline in local currency denominated cash and cash equivalents and restricted cash (in thousands) Other comprehensive gain on the decline in foreign currency denominated debt obligations (in thousands) Other comprehensive loss on the decline in all other foreign currency denominated current assets net of current liabilities (in thousands) Other comprehensive loss on the decline in all other foreign currency denominated long-term assets net of long-term liabilities (in thousands) 5% $ 5,426 $ (3,453) $ 5,401 $ 34,628 10% $ 10,852 $ (6,907) $ 10,802 $ 69,257 20% $ 21,703 $ (13,813) $ 21,603 $ 138,514 In addition, we are exposed to foreign currency exchange rate fluctuations associated with our U.S. dollar-denominated debt obligations that we hedge.
Therefore, the total annual commitments reflects these obligations, including the effect of the cross-currency interest rate swaps on the total-long term debt as disclosed on the consolidated balance sheet. (2) The derivative obligations of the interest rate swaps and cross-currency interest rate swaps are included in the Total long-term debt section of this table.
These amounts include fixed rate debt obligations and derivative liabilities associated with interest rate swaps. Therefore, the total annual commitments reflects these obligations, including the effect of the interest rate swaps on the total long-term debt as disclosed on the consolidated balance sheet.
Added
(2) The derivative obligations of the interest rate swaps are included in the Total long-term debt section of this table. Foreign Currency Risk We have foreign currency risks related to sales, operating expenses and financing transactions in currencies other than the U.S. dollar.

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