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Pricesmart (PSMT)
NASDAQ:PSMT
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Pricesmart
(NASDAQ:PSMT)
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Rating:73Outperform
Price Target:
$169.00
▲(38.55% Upside)
The score is driven primarily by solid financial fundamentals (steady growth and low leverage) and a constructive earnings update with strong operational momentum and expansion/technology execution plans. These positives are moderated by elevated valuation (P/E ~30) and technically stretched momentum signals (RSI/Stoch), alongside margin and free-cash-flow variability risk.
Positive Factors
Membership-driven recurring revenue
A growing, high-renewal membership base creates predictable recurring revenue and customer stickiness. Higher premium (Platinum) penetration improves monetization and lifetime value, supporting steady membership income and resilience to cyclical retail swings over the next several quarters.
Strategic real estate & distribution expansion
Targeted club openings and land acquisitions deepen local market presence and scale procurement advantages. New distribution centers and planned geographic entries reduce lead times and unit costs, reinforcing long-term competitive position in underpenetrated Central America/Caribbean markets.
Conservative balance sheet & improving cash
Low and declining leverage plus steady equity growth give management flexibility to invest in stores, DCs and technology while maintaining capital returns. A conservative capital structure reduces refinancing risk and supports sustainable investment through economic variability.
Negative Factors
Gross-margin compression risk
Material compression in gross margin threatens long-term earnings power if persistent. With a bulk/discount model, sustaining margins depends on supply-chain execution and pricing; prolonged margin erosion would constrain reinvestment, dividend capacity and ROE over multiple quarters.
Volatile free-cash-flow conversion
Inconsistent cash conversion and historically choppy free cash flow reduce financial flexibility for capex and expansion. Even with recent improvement, uneven FCF increases reliance on careful working-capital management and can pressure investment pacing or dividend sustainability during downturns.
FX, local liquidity & weather/geopolitical exposure
Significant local-currency cash, recurring foreign-exchange losses and weather/disruption risk create structural operational and repatriation constraints. These exposures can raise landed costs, complicate cash deployment and intermittently hamper inventory availability across the regional footprint.
Pricesmart (PSMT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.69B
Dividend Yield1.02%
Average Volume (3M)219.84K
Price to Earnings (P/E)31.1
Beta (1Y)0.56
Revenue Growth7.25%
EPS Growth5.42%
CountryUS
Employees12,000
SectorConsumer Defensive
Sector Strength42
IndustryDiscount Stores
Share Statistics
EPS (TTM)1.29
Shares Outstanding30,815,416
10 Day Avg. Volume187,529
30 Day Avg. Volume219,845
Financial Highlights & Ratios
PEG Ratio4.07
Price to Book (P/B)2.58
Price to Sales (P/S)0.61
P/FCF Ratio31.25
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue0.90
Enterprise Value/Gross Profit5.16
Enterprise Value/Ebitda15.35
Forecast
1Y Price Target
$134.00Price Target Upside9.85% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)5.41
Revenue Forecast (FY)$5.73B
Pricesmart Business Overview & Revenue Model
Company DescriptionPriceSmart, Inc. owns and operates U.S. style membership shopping warehouse clubs in the United States, Central America, the Caribbean, and Colombia. Its warehouse clubs sell brand name and private label consumer products, essential goods, fresh produce, prepared foods, and fresh-baked goods, as well as provides services, such as optical, tire center, and other ancillary services. The company also operates Click & Go, an e-commerce platform for online ordering, curbside pickup, and delivery services. As of March 29, 2022, it operated 49 warehouse clubs in 12 countries and one U.S. territory. PriceSmart, Inc. was incorporated in 1994 and is headquartered in San Diego, California.
How the Company Makes MoneyPriceSmart generates revenue primarily through membership fees and sales of merchandise. Customers pay an annual membership fee to gain access to the warehouse clubs, which creates a steady stream of income. The company then sells a variety of products, including food, household items, and electronics, often at lower prices than traditional retailers due to its bulk purchasing model. Additionally, PriceSmart benefits from private label products, which typically have higher margins. The company's strategic partnerships with suppliers and manufacturers also enhance its ability to offer competitive pricing while maintaining profitability. Seasonal promotions and limited-time offers further drive sales and increase customer traffic, contributing to its overall earnings.
Pricesmart Earnings Call Summary
Earnings Call Date:Jan 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Apr 15, 2026
Earnings Call Sentiment Positive
The call conveyed a predominately positive operational and financial picture: solid top-line growth, strong comparable sales, notable regional outperformance (especially Colombia), meaningful membership and digital progress, margin stability and improved operating profit and adjusted EBITDA. Management also outlined an active capital and supply-chain investment program (new clubs, distribution centers, technology). The principal negatives were transitory operational disruptions during the holiday period (elections, weather and supply-chain out-of-stocks), modest SG&A and tax headwinds, foreign currency losses and increased investing cash use. Overall, the positives — including robust sales, membership momentum and margin resilience — outweigh the manageable near-term challenges and monitored macro risks.Q1-2026 Updates
Positive Updates
Strong Top-Line Growth
Net merchandise sales and total revenue reached almost $1.4 billion; net merchandise sales increased 10.6% year-over-year (9.5% in constant currency). Comparable net merchandise sales increased 8.0% (6.9% in constant currency).
Improving Transaction Dynamics
Average sales ticket grew 2.1% and transactions increased 8.4% year-over-year; average price per item rose 1.8% while items per basket remained relatively flat.
Regional Outperformance — Colombia
Colombia delivered exceptional growth with net merchandise sales up 27.8% (15.0% in constant currency) and comparable net merchandise sales up 27.9% (14.7% in constant currency), contributing ~320 basis points to consolidated comparable growth.
Regional Strength — Central America and Caribbean
Central America net merchandise sales increased 9.6% (9.2% cc) with comps +5.4% (5.1% cc) contributing ~320 bps to consolidated comps; Caribbean net merchandise sales increased 5.7% (7.8% cc) with comps +5.6% (7.7% cc) contributing ~160 bps.
Category Growth
Food sales grew ~11.3%, non-foods ~7.2%, food service & bakery ~10.1%, and health services (optical/audiology/pharmacy) ~17.8% year-over-year.
Membership Progress and Monetization
Membership accounts grew 6.7% year-over-year to over 2 million; 12-month renewal rate 89.3%. Platinum (premium) accounts increased to 19.3% of base from 14% a year ago, and membership income as a percent of revenue rose to 1.7% from 1.6%.
Digital Channel Momentum
Digital channel sales reached $89.8 million, up 29.4% year-over-year and representing 6.6% of net merchandise sales. Website/app orders grew 18.1% with average transaction value up 10.1%. 73% of members have an online profile and 27.1% have purchased online.
Supply Chain & Distribution Advances
Panama facility adapted for cold merchandise; new distribution center began operations in Guatemala; plans to open DCs in Trinidad, Colombia and the Dominican Republic; third-party consolidation in China underway; RELEX and e2open implementations progressing to improve inventory and trade management.
Financial and Profitability Improvements
Operating income increased 8% to $62.9 million; net income rose to $40.2 million ($1.29 diluted EPS) from $37.4 million ($1.21); adjusted EBITDA was $86.9 million, up 9.8% year-over-year. Gross margin as a percent of net merchandise sales remained steady at 15.9% and total revenue margin improved 30 basis points to 17.7%.
Cash Flow and Liquidity
Ended quarter with $249.6 million cash and cash equivalents plus ~$114.2 million short-term investments. Net cash provided by operating activities was $71.2 million, up $32.7 million year-over-year.
Real Estate Expansion Pipeline
Purchased land for new clubs: La Romana (Dominican Republic), Montego Bay and South Camp Road (Jamaica), and Ciudad Quesada (Costa Rica). Plan to open four new clubs in FY2026 to reach ~60 clubs and progressing on entry into Chile with two prospective sites and a hired country GM.
Technology & Operational Upgrades
Completed ELERA point-of-sale roll-out in English-speaking Caribbean; migrating mobile app to native iOS/Android; initiating Workday HCM — all intended to improve member and employee experience and operational efficiency.
Negative Updates
Holiday/December Softening and Transitory Disruptions
Comparable net merchandise sales for the 9-week period ended Dec 28 grew 7.1% in USD (5.4% in constant currency), a deceleration versus the quarter. December was negatively impacted by Honduras election-related uncertainty, Panama's extended rainy season affecting traffic/logistics, and supply chain timing issues that caused out-of-stocks in several high-volume food items.
Foreign Currency and Other Expense Pressure
Recorded $7.2 million net loss in total other expense primarily due to foreign currency-related losses, similar to prior year ($7.3 million).
SG&A and Investment-Related Margin Pressure
Total SG&A increased to 13.1% of total revenues from 12.8% (30 basis points), driven by continued technology investments and CEO compensation adjustments.
Higher Effective Tax Rate
Effective tax rate rose to 27.9% from 26.5% a year ago, driven by nonrecurring items including tax contingency approval and foreign exchange fluctuations.
Private Label Reporting Anomaly
Private label sales represented 27% of total merchandise sales, down 70 basis points year-over-year due to a reclassification of the produce category; management noted that on a comparable basis private label penetration would have increased by 70 basis points.
Increased Investing Cash Use
Net cash used in investing activities increased by $61 million year-over-year, reflecting higher purchases of short-term and long-term investments and a $10.4 million increase in property and equipment to support real estate growth.
Local Currency Liquidity Limitation
Approximately $80.2 million of cash, cash equivalents and short-term investments were denominated in local currency in Trinidad and not readily convertible to U.S. dollars, reflecting local FX availability constraints and cash fluctuations.
Weather and Natural-Disaster Related Operational Impact
Hurricane Melissa caused operational disruptions in Jamaica and prompted adjustments to club opening timelines (though management does not anticipate further delays); Panama's rainy season also affected operations.
Geopolitical and Macro Risks Being Monitored
Management is monitoring remittance flow changes to the region and unfolding events in Venezuela; while no impact has been observed to date, these remain potential downside risks.
Company Guidance
Management's guidance focused on execution and timelines for fiscal 2026: they expect to complete the RELEX forecasting/replenishment implementation in FY2026, advance e2open rollouts, open distribution centers in Trinidad, Colombia and the Dominican Republic in FY2026, and continue POS, Workday and native mobile app rollouts while opening four new clubs (La Romana DR — 5 acres, spring 2026; Montego Bay JA — 5 acres, fall 2026; South Camp Rd JA — 3 acres, winter 2026; Ciudad Quesada CR — 6 acres, fall 2026) to bring the total to 60 clubs; Q1 metrics underpinning the plan included nearly $1.4 billion of net merchandise sales (+10.6% / +9.5% cc), comparable net merchandise sales +8.0% (+6.9% cc), average ticket +2.1%, transactions +8.4%, average price per item +1.8%, foods +11.3%, non-foods +7.2%, food service & bakery +10.1% and health services +17.8%, digital sales $89.8M (+29.4%, 6.6% of NMS), membership +6.7% to >2.0M with 12‑month renewal rate 89.3% and Platinum at 19.3% (from 14%), private label ~27% penetration, gross margin 15.9% of NMS, total revenue margin 17.7% (+30 bps), SG&A 13.1% of revenue, operating income $62.9M, adjusted EBITDA $86.9M (+9.8% YoY), net income $40.2M ($1.29 diluted), and cash, cash equivalents and short‑term investments of roughly $363.8M — all framed as drivers to improve product availability, reduce lead times and lower landed costs.Pricesmart Financial Statement Overview
Summary
Steady multi-year revenue growth and consistently positive (but thin) profitability support a solid score, reinforced by a conservative, improving leverage profile (low and declining debt-to-equity) and healthy ~12% ROE. Offsetting factors include TTM gross-margin compression versus FY2025 and historically choppy free-cash-flow conversion/volatility despite improved TTM operating cash flow and free cash flow.Income Statement
Revenue has grown steadily over the last several years (from ~$3.62B in 2021 to $5.27B in FY2025, and $5.39B in TTM (Trailing-Twelve-Months)), supporting a positive growth narrative. Profitability is consistent but thin: net margin is ~2.8% in both FY2025 and TTM, while operating profitability (EBITDA margin ~5–6%) is stable. A key watch item is margin pressure in TTM (gross margin down to ~12.9% vs ~17.4% in FY2025), which could limit earnings upside if it persists despite modest revenue growth in TTM.72
Positive
Balance Sheet
The balance sheet looks conservative with low leverage and improving debt positioning: debt-to-equity is ~0.14 in TTM (Trailing-Twelve-Months), down from ~0.26 in FY2025. Equity has grown over time (from ~$915M in 2021 to ~$1.30B in TTM), and returns on equity are healthy and steady around ~12% in FY2024–TTM. The main limitation is that assets have expanded alongside the business, so maintaining returns will depend on sustaining margins and operating efficiency.83
Very Positive
Cash Flow
Cash generation is solid in absolute terms, with operating cash flow improving to ~$294M in TTM (Trailing-Twelve-Months) and free cash flow rising to ~$125M (up ~21.6%). However, cash conversion is somewhat uneven: free cash flow is less than half of net income in TTM (about ~43%), signaling reinvestment needs and/or working-capital swings. The multi-year pattern shows volatility (very weak free cash flow in FY2022 and FY2024), which is a risk factor even though the latest period is stronger.70
Positive
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.39B | 5.27B | 4.91B | 4.41B | 4.07B | 3.62B |
| Gross Profit | 939.70M | 914.37M | 846.92M | 758.57M | 679.53M | 642.13M |
| EBITDA | 315.78M | 306.17M | 297.00M | 252.93M | 233.90M | 219.38M |
| Net Income | 147.43M | 144.90M | 137.12M | 107.89M | 103.29M | 96.68M |
Balance Sheet | ||||||
| Total Assets | 2.39B | 2.27B | 2.02B | 2.01B | 1.81B | 1.71B |
| Cash, Cash Equivalents and Short-Term Investments | 329.79M | 325.27M | 225.53M | 331.06M | 248.87M | 252.29M |
| Total Debt | 325.17M | 329.06M | 249.63M | 278.18M | 281.36M | 267.29M |
| Total Liabilities | 1.09B | 1.02B | 899.73M | 898.57M | 817.33M | 789.58M |
| Stockholders Equity | 1.30B | 1.25B | 1.12B | 1.11B | 991.07M | 915.35M |
Cash Flow | ||||||
| Free Cash Flow | 125.46M | 103.17M | 39.04M | 114.82M | 1.17M | 13.99M |
| Operating Cash Flow | 294.02M | 261.31M | 207.59M | 257.33M | 121.83M | 127.17M |
| Investing Cash Flow | -189.84M | -128.88M | -175.45M | -222.08M | -74.76M | -116.72M |
| Financing Cash Flow | 15.64M | 14.20M | -150.03M | -41.05M | -12.21M | -95.14M |
Pricesmart Technical Analysis
Positive
121.98
Price Trends
136.81
Positive
128.51
Positive
117.87
Positive
Market Momentum
5.08
Positive
66.37
Neutral
53.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSMT, the sentiment is Positive. The current price of 121.98 is below the 20-day moving average (MA) of 148.31, below the 50-day MA of 136.81, and above the 200-day MA of 117.87, indicating a bullish trend. The MACD of 5.08 indicates Positive momentum. The RSI at 66.37 is Neutral, neither overbought nor oversold. The STOCH value of 53.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PSMT.
Pricesmart Risk Analysis
Pricesmart disclosed 30 risk factors in its most recent earnings report. Pricesmart reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Pricesmart Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $442.13B | 53.36 | 30.32% | 0.59% | 8.34% | 9.58% | |
73 Outperform | $4.69B | 31.06 | 11.97% | 1.02% | 7.25% | 5.42% | |
73 Outperform | $1.01T | 46.38 | 22.97% | 0.85% | 4.34% | 17.27% | |
73 Outperform | $33.46B | 26.25 | 16.45% | 1.88% | 4.86% | -4.51% | |
71 Outperform | $12.95B | 22.86 | 29.24% | ― | 2.82% | 3.77% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
61 Neutral | $26.36B | -9.92 | 20.07% | ― | -39.27% | -182.36% |
* Consumer Defensive Sector Average
PSMT
Pricesmart
152.93
64.15
72.27%
COST
Costco
987.82
-41.57
-4.04%
DG
Dollar General
151.79
76.76
102.29%
DLTR
Dollar Tree
133.57
58.61
78.19%
WMT
Walmart
124.87
30.99
33.01%
BJ
Bj's Wholesale Club Holdings
99.19
-2.30
-2.27%
Pricesmart Corporate Events
DividendsShareholder Meetings
PriceSmart Shareholders Reelect Board and Declare Annual Dividend
Positive
Feb 6, 2026
At its February 5, 2026 annual meeting, PriceSmart stockholders re-elected all director nominees to the board, approved on an advisory basis the compensation of the company’s named executive officers for fiscal 2025, and ratified Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending August 31, 2026, with a high proportion of the company’s 30.8 million outstanding shares represented. On the same date, the board declared an annual cash dividend of $1.40 per share, to be paid in two equal installments in February and August 2026 to stockholders of record on specified dates, underscoring the company’s continued capital-return policy while leaving future dividend decisions subject to board review of financial performance and capital needs amid uncertain macroeconomic conditions.
The most recent analyst rating on (PSMT) stock is a Buy with a $150.00 price target. To see the full list of analyst forecasts on Pricesmart stock, see the PSMT Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.