Pricesmart Inc (NASDAQ: PSMT) reported third-quarter fiscal year 2026 net income of $39.7 million, a 12.3% increase year over year. Total revenue reached approximately $1.5 billion, driven by a 12.5% rise in net merchandise sales.

The warehouse club operator expanded its membership base by 8.6% to over 2.1 million accounts. Membership income grew 17.6%, supported by Platinum tier upgrades which now represent 21.3% of total accounts, up from 16.1% in the prior year period.

Financial Performance

Total gross margin as a percentage of net merchandise sales increased 20 basis points to 16% versus the same quarter last year. This improvement was primarily due to better margins in the non-foods category. Total revenue margins improved 30 basis points to 17.7% of total revenues from 17.4% in the prior-year period.

Operating income rose 16.7% to $65.6 million, or 4.4% of revenue, compared to 4.3% in the previous year. Adjusted EBITDA grew 14.5% to $90.4 million from $79 million in Q3FY25.

Sales performance varied by region. Colombia saw the strongest growth with net merchandise sales increasing 35.3%, or 18.6% in constant currency. Central America sales rose 10.6%, while Caribbean sales increased 6.8%. Comparable net merchandise sales across all regions grew 10.7%, or 6.9% in constant currency.

What the Numbers Show

Membership income as a percentage of revenue held steady at 1.7%, consistent with the prior year. This stability indicates that while membership fees are growing in absolute terms, they are scaling proportionally with overall revenue growth. The company’s 12-month renewal rate hit an all-time high of 90.5%, suggesting strong member retention despite macroeconomic pressures and inflation affecting consumer purchasing power in several markets.

Operational Updates

Pricesmart announced its entry into Chile, executing a lease for its first warehouse club in Santiago’s Comuna Las Condes, anticipated to open in spring 2027. The company plans to invest approximately $100 million in capital expenditures for its first three clubs and central offices in Chile over the next several fiscal years.

Digital channel sales reached a record $99.6 million, up 26.2% year over year, representing 6.9% of total net merchandise sales. The company also completed the implementation of its new point-of-sale system, Alera, across English-speaking Caribbean markets and one Spanish-speaking country.

Cash flow from operating activities for the first nine months of FY26 totaled $192.2 million, an increase of $13.1 million versus the prior-year period. This was partially offset by higher inventory balances that consumed $9 million of cash. The company ended the quarter with $254.6 million in cash, cash equivalents, and restricted cash, plus approximately $113.7 million in short-term investments.

PriceSmart reported third-quarter earnings per share of $1.28, beating the analyst consensus estimate of $1.19 by 7.56%. This represents a 12.28% increase compared to earnings of $1.14 per share from the same period last year. The company's financial performance was driven by strong top-line growth, with quarterly sales rising 12.50% year-over-year to $1.482 billion.

The sales figure exceeded the analyst consensus estimate of $1.433 billion by 3.40%. This growth marks an increase from sales of $1.317 billion reported in the same period last year. The results highlight the company's ability to expand its revenue base while improving profitability on a per-share basis.

Financial Performance Summary

The following table outlines PriceSmart's Q3 performance compared to analyst estimates and the prior year:

The double-digit growth in both earnings per share and sales underscores the effectiveness of PriceSmart's operational strategy during the quarter.