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PriceSmart (PSMT), a U.S.-style membership warehouse club operator with stores primarily in Central America, the Caribbean, and Colombia., delivered a solid 3Q25 earnings report, narrowly surpassing EPS expectations while revenue of $1.32 bln aligned with forecasts. The company reported robust comparable net merchandise sales growth of 7.0%, or 8.5% in constant currency, reflecting strong performance across its 55 clubs. Adding to the positive sentiment, PSMT announced it is evaluating Chile as a potential new market, hiring local consultants and scouting sites, which has fueled a surge in its stock price to multi-year highs as investors anticipate further growth in its emerging markets footprint.

• The potential entry into Chile is a significant catalyst for PSMT, as it represents an opportunity to expand its proven warehouse club model into a new South American market with favorable demographics and economic stability. Chile’s GDP per capita, higher than PSMT’s existing South American markets like Colombia and Ecuador, suggests strong potential for membership uptake among middle- and upper-income consumers.
• Based on the company’s measured expansion strategy -- averaging 1-2 new clubs annually in markets like Colombia (population ~52 mln, 10 clubs) and Ecuador (population ~18 mln, 3 clubs) -- Chile’s population of ~20 mln could conservatively support 3-5 clubs over the next decade, assuming suitable site availability and regulatory approvals. Chile’s developed retail infrastructure, urban concentration in cities like Santiago, and consumer preference for value-driven formats align well with PSMT’s low-price, high-quality model, making it a compelling fit, though challenges like site acquisition and permit uncertainties remain.
• Turning to the Q3 performance, PSMT’s comparable net merchandise sales growth was driven by strong demand across key product categories, particularly food and consumables, which benefit from the company’s focus on sourcing 50% of products locally or regionally. The company’s omni-channel strategy also played a pivotal role, with digital sales rising to 6.1% of total net merchandise sales. Membership growth further bolstered results, with total accounts reaching 1.97 mln (up 4.1% yr/yr) and a high 88.0% renewal rate, particularly driven by uptake in the premium Platinum tier.
• Profitability also showed notable improvement, with adjusted EBITDA climbing to $79.0 mln from $71.0 mln in the prior-year quarter, an 11.3% increase. Key drivers included higher membership income, which surged 13.4% to $21.9 mln, reflecting strong member retention and premium tier growth, alongside operational efficiencies from increased sales volumes. Furthermore, investments in technology and digital channels, while increasing expenses, are yielding higher-margin digital sales, positioning the company for sustained profitability gains as it scales.

PSMT’s stock rally to multi-year highs is partly driven by optimism surrounding its potential Chile expansion, which promises to extend its successful emerging markets strategy. The company’s strong Q3 FY25 results, underpinned by robust comparable sales and improving profitability, further reinforce the growth trajectory.