On this page of StockholderLetter.com we present the latest annual shareholder letter from PRICESMART INC — ticker symbol PSMT. Reading current and past PSMT letters to shareholders can bring important insights into the investment thesis.

 •  12/18/2024 Letter Continued (Full PDF)
 •  12/19/2023 PSMT Stockholder Letter
 •  More "Department Stores" Category Stockholder Letters
 •  PSMT Benford's Law Stock Score = 72

PSMT Shareholder/Stockholder Letter Transcript:

December 18, 2024
Dear Stockholders,
For our fiscal year 2024 which ended on August 31, 2024, PriceSmart continued to produce a
strong financial performance. Revenues were $4.9 billion, an 11.4% increase over the prior year.
Earnings were $138.9 million compared with $109.2 million in the prior year, an increase of
27.2%. Operating cash flow was $207.6 million, and stockholders    equity increased to $1.12 billion.
Fiscal year 2024 was an especially rewarding year for me because of the progress we have
made in our business and the positive impact PriceSmart continues to have on the lives of so many
people   employees, Members, suppliers, and our communities.
We are making many improvements in our business, but I would like to highlight three that are
proving to be especially impactful: distribution centers, our US income initiatives, and investment in
technology.
We currently have major distribution centers in Miami, Costa Rica, and Panama. We are now
adding distribution centers in Guatemala, Trinidad, and the Dominican Republic while continuing to
determine the best location for a future distribution center in Colombia. We believe these in-country
distribution centers will provide numerous advantages, including shortening the time to market for
imported products, lowering the net landed cost for most of our merchandise, providing better instocks, reducing handling expenses, providing a cost-effective way to fulfill PriceSmart.com orders,
and possibly reducing the cost of building and equipping our PriceSmart locations. Along with
additional distribution centers, we are beginning to operate our own fleet of trucks to deliver
merchandise from our distribution centers and to pick up merchandise from our suppliers.
Related to our US income initiatives, although we do not operate PriceSmart locations in the
United States, we do generate profits in the United States because of the markup we make on products
sourced by our US buyers and sold to PriceSmart locations in the countries in which we operate, and
our US parent company earns a royalty from sales made at PriceSmart locations. All this income is
considered foreign-sourced income. When we file our income taxes, we offset this foreign-sourced
income against foreign tax credits, so there ends up being no US tax on foreign-sourced income. We
have been aware of and taken advantage of this tax benefit for many years, but we typically have more
foreign tax credits than we can use. As a result, more recently, we are being more proactive in gaining
more benefits from foreign tax credits. For example, we have set up a new business in the US, an
export division, selling merchandise primarily to businesses in countries where PriceSmart does not
currently have clubs. The profits made on these sales qualify as foreign-sourced income.
Related to technology, PriceSmart historically has underinvested in technology. The
technology investments we are prioritizing now are for supply chain enhancements, back-office
productivity improvements, and initiatives to both optimize and transform the brick and mortar
experience and to make the digital experience more efficient and Member-centric. In fiscal year 2024,
we launched several new technology initiatives related to merchandise procurement, supply chain,
point of sale, and PriceSmart.com. We believe that this heightened focus on technology and process
improvement will result in numerous benefits, including better stock and inventory control, lower
labor costs, an improved Member experience, and a better online shopping experience for our business
and retail Members. It goes without saying that investment in technology is expensive; however, we
feel confident that these investments will pay off.
In addition to the positive results we are experiencing with our PriceSmart business, I feel even
more gratified by the positive impact our business is having on our employees and the communities in
which we do business. I am so proud of the fact that PriceSmart has an outstanding record related to
employee retention. Many of our employees have been with our company for more than 20 years. The
loyalty and spirit of our employees have been built up over many years and are based on excellent pay
and benefits, a respectful and welcoming work environment, and opportunities for advancement as
PriceSmart continues to grow.

We also believe it is our mission to find synergies and win/win situations in the communities in
which we operate. One way we do this is by partnering with Price Philanthropies Foundation   s
Aprender y Crecer program which provides free school supplies and eyeglasses to thousands of lowincome children. The purchasing of school supplies and eyeglasses leverages the buying power of
PriceSmart. Also, our recently formed PriceSmart Foundation is making grants to non-profits to
support youth employment training and to help small businesses improve their operations. More
organically, PriceSmart is fostering entrepreneurship in the countries in which we do business. First,
many smaller PriceSmart suppliers have scaled their businesses because they have PriceSmart as a
customer. Second, many entrepreneurs have been able to start their businesses because they can
purchase small quantities of products at very good prices and then resell those products, often in
communities in which PriceSmart is not doing business.
Finally, I would like to share with you our current investments in real estate. These investments
take two forms: one is investing in existing PriceSmart locations to either enlarge the selling area,
provide more parking, and/or modernize fixtures and income. This past year, we made major
investments in the following locations: Liberia, Costa Rica; San Pedro Sula, Honduras; San Salvador,
El Salvador; Santiago, Dominican Republic; and Portmore, Jamaica. We are planning to open two new
locations this fiscal year, one in Costa Rica in the spring of 2025 and the other in Guatemala in the
summer of 2025. In addition, we have other potential sites under consideration but do not announce
new locations until all permits have been received.
I am so grateful to our amazing employees who are so committed to our company. I also want
to recognize our outstanding members of our board of directors. Each director provides unique
knowledge and experience, contributing so much to our company   s success.
On behalf of myself and our board of directors, best wishes for a very happy holiday season
and a healthy and fulfilling new year.
Sincerely,
Robert E. Price

PRICESMART, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
OTHER INFORMATION
August 31, 2024
Selected Financial Data
Management   s Discussion and Analysis of Financial Condition and Results of Operations
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of August 31, 2024, and 2023
Consolidated Statements of Income for each of the three years in the period ended August 31, 2024
Consolidated Statements of Comprehensive Income for each of the three years in the period ended August 31, 2024
Consolidated Statements of Equity for each of the three years in the period ended August 31, 2024
Consolidated Statements of Cash Flows for each of the three years in the period ended August 31, 2024
Notes to Consolidated Financial Statements
Market for Registrant   s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Additional Information
Directors & Officers of PriceSmart, Inc.
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 12/18/2024 Letter Continued (Full PDF)