PSMT - Earnings call transcript Q2 2018

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Operator

Good day and welcome to PriceSmart, Inc.’s Earnings Release Conference Call for the Second Quarter of Fiscal Year 2018, the Three and Six-month Period Ended on February 28, 2018. All participants are currently in a listen-only mode. After remarks from Jose Luis Laparte, PriceSmart’s President and Chief Executive Officer; and John Heffner, PriceSmart’s Executive Vice President and Chief Financial Officer, you will be given an opportunity to ask questions as time permits. [Operator Instructions] As a reminder, this conference call is being recorded on Friday, April 06, 2018. A digital replay will be available through April 13, 2018, following the conclusion of the call by dialing 877-344-7529 for domestic callers or 412-317-0088 for international callers, and entering replay access code 10117031. to conference like Heffner. to now would turn over the John I go sir. Please ahead,

John Heffner

and earnings Thank second to welcome you, our fiscal XXXX. quarter call year of the for

our information We sales. discussing we March also released XXXX. XX-Q, that released earnings XX, which press April morning, we both will of release the warehouse provided This be yesterday, our our and on in we report

related no this materially, with differ both but report will, that year and risks that statements to filed XXXX future on may, this We to, may on forward-looking to find These can matters. believe, during may our and could containing statements estimate subject These press to note duty statement uncertainties www.pricesmart.com. expressions. results Please and similar plans, any statements update XX-K in annual the XX, of to XXXX. date ended disclaim statements for Form actual including filing expressly forward-looking You obligation the are the the not fiscal forward-looking and should, releases XX-Q website, of expect, or after statements anticipated made concerning Exchange include, Commission call contain and circumstances the any the the XX, Company’s on the words Company’s arise occurrence events cause and which Securities call. August reflect the revenues are limited October detailed assume risks

Laparte, President I will call Officer. Executive Now, and Chief Jose the to PriceSmart’s turn over Luis

Jose Luis Laparte

share tax U.S. legislation changes results. million passed the from Yesterday, XXXX. quarter joining the of you and announced we into resulting our and in Net that law thank new $X.XX quarter of financial effect, of everyone reflected income morning December the today. the in impact $XX.X in went for earnings per Good second us

$X.X year that March results John will net of the the For most million, be of improvement of purchase impact technology go development as Aeropost. increased on focusing negative longer sales tax remarks and will X.X%. XXXX the the the my online cost acquisition an good a X.X% $X.XX. fiscal Aeropost, activity onetime in of acquisition XXXX second the million second compared included $XXX.X of We year. e-commerce deal-related our because acquisition period in with the versus the of detail in earnings last part quarter ending increase associated to capabilities. and resulted X, to in quarter. charges period The with are the $XXX,XXX Inc. warehouse activities our us, business of more of This a the for related in tax in Operating operating his address expenses quarter million the no charges operating in in Inc., comments for Company of current XX-week these needed with cross-border on income our quarter costs these comparable of totaling fundamental of of first showing I X.X%, increase sales package warehouse quarter comp online I to finished period, our technologies, also a charges. will delivery recent Aeropost, the $X.X into included

more give now me color our results quarter. you the for on Let sales

Central largest growth of Salvador. and driven the compared club high-single what countries in increase warehouse the was sales of in X%, This that several Rica to a El Costa this Nicaragua is had low we in X.X% first each in our sales comp Ana a opened that in overall In X.X% first of from X.X%, good continuation positive by Panama The Our net Central Caribbean a small on in average for of of and due year market results sales to and a warehouse of X.X% Trinidad, in from reported segment Costa robust returned up a the XXXX, saw was This sales Rica. saw to Santa the growth contributing earlier slight saw America, October growth. also sales quarter digit growth had of an quarter positive increase we transactions driven our where America a a growth of sales segments. experience segment sales the that after total quarter. years Guatemala of We having year single fiscal in in positive positive for we addition the period. the primarily the digit, in growth X.X%. improvement Honduras, decrease growth decrease the resulted again quarter ticket. to rest

sales level. period with sales margins, sales again currency To even has mention of growth in reopened X.X%. the just damage slight stable, additional dollar XXXX. growth a relatively mode continued due pesos I sustained year other a continue still XX-week incremental digit compared also same moving while, growth positive comparable a ago. X, results during Barbados XX.X%, yet in the quarter year increased the Dominican the fact the the double-digit this where the past conclude see hurricanes to March small island double million the only more in operating income for had to improving to due Colombia in have ending we’re band, $X.X Aruba that compared business are recovery competitors or period Republic period not would and warehouse sales, decrease capturing USVI, We to to reported below the remained ago. Jamaica, have a in overall to membership good accounts in same to that the and September X,XXX club That

comparable overall a the finished to Company on basis sales X, a region of which was and with that This for comps show results. basis the terms released of $XXX.X sales the morning, we of March from We Escazu about negative a Santa the Costa warehouse having Rica. representing in comps. X.X. increase seeing month in warehouse the four same transfer XXX sales Ana million, versus year in ago; meaningful our of ended XXX X.X% impact this still XXXX, weeks April of our sales Central We’re is also points good estimate our cannibalization about growth We the points a in continued month to America

be offset weekend the the and compared As it but March on the that all our happens Easter period, sometimes, clubs during generally this our year, month April from sales are ago. year this of Semana versus normal We our purchases Easter or Friday fell Santa members the Semana fact in a largely from can see see increased Santa to lower Good closed warehouse by we weekend.

been appliances this In a inventory growth additional of softlines were to departments that merchandise SKUs good also of were XX% that vegetables. canned The than growth the fresh department by area, differentiation. terms lot excitement we toys, driven nuts, also comp grow the food, creates that [ph] in In where have some and reported results to and In new adding growth. fashion had good meat and categories, items see deli quarter more XX% area and more continue growth growing hardline, in we and major with departments. computers, especially teams for canned to the invested our candy, department highest on have that than of gourmet the apparel

business service and reported bakery quarter. during growth this food also Our

results and furniture. came drive [ph] in areas Warehouse the in salvage ago XX.X% issuing seen were like at office soda, as decreases favorable sporting XX.X% slight liquor, as [Ph] challenges, pricing and compared a less margins a sales result to Some throwaway. to of goods and year period actions

X.X% up up Moving February at the X,XXX,XXX on and a by quarter income ago XX-month to we membership, more accounts, membership from The renewal finished rate was than year X.X%. end of XX%. with the was

XX%. renewal have this and the Panama and with results of fee in overall in was membership average The seen collected on pleased and X% an during fiscal contribute account. acceptance platinum year new the of Colombia, introduced the Dominican the the which rate to we we’re increase was per membership first level membership XXXX, quarter of Excluding Republic

also to efforts our existing our with to our Jamaica. are handle well continue membership fiscal completed provide year. of our members. in ability prove active in proceeding growth and some the Pradera support building our City in We this expansions capacity of and Kingston Currently, QX include our our our be during location of projects location these warehouse in will and Both additional Guatemala clubs to in

Our San our construction Dominican the City in Isidro location Republic open on and Domingo, to Santo as of XXXX. is planned scheduled May X, is moving

opening, and forward the look new successful the another in Xth to We’re Dominican pleased warehouse our Republic. club members sign-ups with of

warehouse from modern members about XXX country the David, municipalities clubs, of location slight Panama. with distance may in is well the for of from miles. but in the David, announce new new happy trip province city acquisition in of Santiago see to increased a approximately I’m XXX from members new in frequency to we that Panama club the the a site that We of from City in Panama The about is attract opening and from this In us completing Santiago a a of city. sure much city the allow for that we area. some Veraguas. operate capital will currently will the city Cocle. those people miles The located we’re at city cannibalization Herrera, This successful of as much to we to the club see shopping as like of The to where Veraguas warehouse XX,XXX vicinity, make closer primary de are square attract members in current this meters that communities long Los city location new to new terms is Santos this close of

open for of of club On we end Inc. March be for and club transaction. the or Caribbean. our at and total providers start Aeropost, in cross-border and our early most sixth holiday. acquired for consideration logistics club the largest and December and XXth, in of ecommerce country $XX of a of one Aeropost November at this warehouse XX April expecting Company. in construction in Panama million We’re time is a cash tentatively the to America new the the Latin a This end the would

offer pickup their to expertise Aeropost innovative Aeropost including operational local and with services to and points, headquarters and Aeropost.com high With together combination customers Aeropost’s and excellence, XX mortar in delivery exciting, provides test the PriceSmart [indiscernible] and them offers our and convenient prices. knowhow. two to service offer in The and delivery while distribution cross-border new facility members, days Aeropost country shopping, operates. our products services enables of ecommerce maintaining purchase. our online our receive delivery accelerates power, to and brick at all is with U.S. payment package and experience business of members. within near local sourced service purchase offer measure PriceSmart exceptional value Miami and distribution digital XX companies options PriceSmart purchase where commitment countries Miami brings addition U.S. The we online logistics, and options. PriceSmart’s an for our members territories to to ability our high-quality delivery low options strategies, excellent an merchandise buying The

business, Aeropost to point, this As and as omni-channel a $XX revenues subsidiary, million At wholly-owned standalone million is strategy. Aeropost PriceSmart’s $XX logistics digital services of to a annual will and technology support operate has providing operationally and breakeven.

to acquisition. the with quarter, of we we any anticipate earnings this end do further charges through the year the dilution took fiscal in not this Beyond our

initiative, as could do innovation addressed Some to are previously we to the fiscal $X capabilities. planning and of in year part this of up we million indicated via our activities being now investments Aeropost be which were have

largely added As welcome have will We Aeropost our of employees a incremental the of within with costs amount. I believe exciting fall integrating previously Aeropost Aeropost family. to any PriceSmart personally investment and to we planned new that want capabilities the result,

about I we comments, Before talk morning announcement CFO. that my I made this new to another regarding finish also our want

the warehouse he that of working We’re in He Allen division, Inc. before to Senior club Asia for years happy Vice Financial XXXX division XX, Walmart. tenure and Club. Financial currently Kong at years PriceSmart. also he as North living at Prior and and at opportunity and in will President also us him joining we different to at role the different oversaw After have Good be announced. the wish I and worked retirement, He in new questions. over in XX him time positions his business. will to John Company management in Sam’s your his Hong Maarten contribution to many would during He announce John, its Jager the miss Chief thanks and Booz I Walmart luck, financial Heffner during he responsibilities. take support. Diageo he as we technology Vice definitely joined best Chief remarks, Officer Hamilton, President Maarten worked many same XXXX. to us your served previously America for joining Walmart, is the that past his and thank Thanks Senior joined of which international want April for where today. of in for and Officer closely appointed of years. and understands again together the take John’s I the

John Heffner

Luis. you, Thank Jose

a $XX.X year administrative Let a XX.X% of general of further or the club. in were reform few on revenues million this cost warehouse including of year XX.X% SG&A tax the to has a and of me in Total impact selling, additional results legislation compared cover ago. additional items U.S. the quarter. quarter our one discussion the expenses

we that are costs or Aeropost $XXX,XXX for million expected reoccur. the associated SG&A $X.X and technical had with tax, in $X.X costs to acquisition to diligence, advice. the addition, In legal, accounting, in of acquisition not Included our related million deal due

a to in-house Tax sales $XXX,XXX Obviously, utilize additional our update million a quarter our some when capability call of in the lower interest. our the of quarter. seen December efforts also solution. of of will expense U.S. in the provided online our the release. technology a Cuts their Jobs took to in us for quarter due We this year in XXXX. in lower is February discontinued ecommerce total development to many acquisition ago outsourced of capitalized change increased solution. provided during long-term Like Aeropost of net taxes. of in Aeropost level recorded along QX Net further allow passed estimates We the recognized big income and place transaction legislation is of gains charges and The interest and currency year-over-year of Act level We debt with compared digital companies, an to was foreign provision this impact press earnings $X.X in we

U.S. with current per be law Offsetting the a of of had statutory will we it net current deferred were was tax reduction offset earnings at million. a future XX% compared in them. tax We million benefit assets our a rate in these detailed our aspects re-measured at the various periods, lower we a was to which lower XX% pieces on million resulted $X.XX $XXX,XXX impact been earnings quarter. carrying While this additional $X.X the the at charge rate of non-cash share in new able expect that it of tax rate $XX.X beneficial or earnings The to estimated earnings million. these on period tax to with totaling the most the to aspect charges MD&A this section and U.S. This is books lower least our make $XX a transitional the is release on up tax of as provisionally in tax to credits $XX.X non-cash of largely over An our one-time earnings in related foreign significant payable repatriation U.S. remainder XX-Q. be years. of unremitted foreign that charge eight

the versus Going in overall forward, basis-point from we taxable an the mix in outside prior This the change U.S. historical paying be current dividends is in things jurisdictions. rate happy effective briefly, and U.S. With you. to our perspective, result to February, cash $XX.X income that tax in will foreign debt, approximate Chad, the $XX.X from I’ll we million that, and overall run stockholders ended in to to have estimate of questions. our million your rates. long-term. XXX rate see balance Very tax both the over million turn a a of U.S. we’d we take with $XXX.X in improvement the quarter sheet after in

Operator

you. Thank

ahead. We will Please Capital. Instructions] Kansas first [Operator question-and-answer begin Braatz from City the comes session. with Jon go now today Our question

Jon Braatz

Good morning, John, Jose.

Jose Luis Laparte

Good morning.

Jon Braatz

at Aeropost, sort eBay be are businesses platform of two online for emphasis online it on. on they the platform? as you and you facilitator act to business Regarding want going grow looks look businesses of is How the online, shopping an and I or forward? going they a so facilitator the to Amazon, as have look to also like really when those Do going sort

Jose Luis Laparte

we’re to bring obviously the Jon, our these mortar services, yes, use lot this, services category build what That business. of by looking expertise really, move of Amazon, combining grow value they name our proposition obviously obviously brick different eBay, the at items e-commerce of lot kind do doing way volume at Walmart, of and that mainly developing to -- you enhance from retailers looking a of business a we’re and obviously these obviously is purchases, country. is our But and big. it,

and want our build opportunity multi-channel we goal offer where to is eventually for a Now, our getting to platform members. to shopping experience

Now, that’s not build the current we necessarily we want to just the business. category way grow --

more in are I them a be to own that -- through addition, we members. can focused at we’ll our the on also the going we growing -- offer so guess PriceSmart building our to platform platform obviously Now, build looking

Jon Braatz

the able and better large be to and I set And consumers consumers -- in like better the be how would locations Obviously have offer might your markets is, that costs, physical expedite to to orders you relative position choices apart? down a guess is some what how lower in in to have competitive now? online Will those markets does you choices. distribution Okay. understand your going I by other

Jose Luis Laparte

different Aeropost Obviously, pickup points. already offers Yes.

Eventually, merchandise pickup that So, obviously, members to a members to they leverage go work important ability -- good points to offer buy can become members. that market definitely we’re going able clubs also also and where pickup and Aeropost. through a can obviously be can current our better competitor we our our our And with our should value to in members. be volume and our

Our our a for obviously ultimate members, better experience obviously omni-channel create value for proposition them. That’s the goal is a Jon. concept, great offering

Jon Braatz

be to open non-members? Will opportunity up it there to an

Jose Luis Laparte

can Well, shop mix currently, of obviously we anyone that. in -- we a shop Aeropost. sure I’m in have that mix members

will on have We merchandise obviously, Eventually, of shop only current members Aeropost PriceSmart. members those available shop PriceSmart now there website. and that mix their for a be

an for say sign actually So, Aeropost not I’m will And people that probably, but will us member. us new an they have opportunity I’m customer, up. to it members, give a PriceSmart will

about to a So, there those members. is learn lot

One of customer ideas acquisition to obviously expertise also. digital campaigns different is the the to media drive introduce online digital marketing via

Jon Braatz

stage? One you Okay. can And there you might the acquisition? charges make will John, type be thought last question, line business? additional give size to with segment of lastly, what a for the at Aeropost us a reporting the this have And then, on any other -- maybe with of acquisition associated investments this amortization

John Heffner

Jon, of consider now there I mentioned, per are visibility the revenue from their into sales we be planning revenue very revenue much fall segment. been P&L we’ll way. will U.S. their it’s but related an and which individual revenue stream segment. able will to what warehouse separate investments because activities you’ll not an wrapped Aeropost. our will through are this. report investments, innovation to think as aspects more through near-term within right our se. up innovation see related we It will into that investment the things see, be there we area, of be do Certainly now income have standpoint, adequate our It’s key stream In -- that a But, to revenue

million year. $X think I million this $X to for indicated we’ve So,

end think again. range at Jon. the the that third we a Aeropost. within million, me operate And too, Say of $X asked with we you can you integration question of look that If upper that of

Jon Braatz

with The amortization the… associated

John Heffner

Sure. We a go accounting price purchase need exercise. to through

yet that like we parse things have pieces into out this of So, to not require, property, done goodwill, that. technology the that intellectual we

this we’re looking like. in more to quarter and that’s So, be probably that’s on able what share be some to doing the work call next going

Operator

The will Ronald IFS next Bookbinder question go Securities. from with be Please ahead.

Ronald Bookbinder

growth. But, congratulations and continued Aeropost with the continuing on the morning comp on questions. Good

it that doing? I think, of kind was you is all income but currently neutral, revenues the what business operating said

Jose Luis Laparte

$XX million million standalone to business what $XX a were doing. revenue, as on that’s they

Ronald Bookbinder

goods selling from that did guys And online purchase already were Okay. they or you they shipping overseas? any

Jose Luis Laparte

of a the we past, our have Obviously, countries days e-commerce activity, service used to the few air back doing obviously, moving when in we do because deliveries freight. were in our to some -- times when Ronald, we some that. they didn’t No, doing own we online actually merchandise that expertise were business, we Aeropost the

that definitely, any wasn’t that they more used now But a one merchandise as So them haven’t we them. expertise other was of area relation -- with service. there

Ronald Bookbinder

don’t you Ecuador in to insight region before And Aeropost, currently you that they the such to Aeropost markets be Could service. used for and guys gain service enter you Peru? into markets -- new as

Jose Luis Laparte

we to correct. That’s ability the that and offering that as definitely those values analytics shopping to obviously, we opportunity members markets. deliver There also because and to that not countries exposure PriceSmart those we learn to opportunity merchandise, customer countries. obviously us the learning countries exploring. other can an get business. give of obviously do And That is the are new buy utilize have now, but obviously will concepts good it we these and what obviously, one good other and a more with merchandise that; offer fact behavior have obviously drive learn member markets different And been merchandise all to of in is our will PriceSmart the to some some in for only

Ronald Bookbinder

how price And here. oil, has And TT? nice benefiting level Trinidad Colombia? and things exposure in oil that’s Trinidad with Do a really feel to your at you are of the the steadied

John Heffner

bit. a helped Well, Trinidad, in has it

liquidity encouraged slight -- some so, still this It there. is by have situation for we’re is But that. We difficult us. improvement situation seen in a

bit. improved has a business Our

our I business think for there has improved. the environment

as remains, year quarter in liquidity with the but see last were severe as quite a can we Trinidad. sales very this careful not And You Trinidad. are ago. But saw generally still experiencing situation we positive it’s in the we

Jose Luis Laparte

on positive Colombia, a Colombia oil. Ronald there couple to much there X,XXX point I has even I some for signs. your trend. having the on the below that the think related is been weeks last see -- are obviously of currency of good We level. is don’t know to how is And that sure I’m

So, X,XXX it’s actually level.

obviously So, in economy. that and it is actually helping

hope currency, seeing that oil at we trend, So, that least maybe the and stable continue no to is of we price. related, some question,

Ronald Bookbinder

are Trinidad, back inventory still on And you holding any or… shipments

Jose Luis Laparte

No.

what shipping that we We’re basically for need country.

but the We’re just on definitely careful continue inventory. being level they today, there are shipping looking If no, sales. restrictions. any of will obviously continue inventory, sales, It’s basically we by driven their at growing

John Heffner

Yes.

an currency tradable moving We’re support that of to getting shipments adequate level any in. we’re

Operator

Our go will Scotiabank. come next ahead. Echagaray Rodrigo with question Please from

Rodrigo Echagaray

but low fair be become the first members say those by that question, the hanging focus you shipping that selling trying And One, to and existing the currently focused or beginning. operations and buying members? where a be Just I that to And driving beginning, will both income, in as on impact from at or membership is not customers back are you not mean, of Easter as sales on a the sure quickly PriceSmart Is to understand guys quick at also, questions. sales? two would Aeropost fruit the would going guess and just far big on Aeropost many be necessarily the expand merchandise? you March just they make the I it acquisition, good focus just Aeropost be as there overlap terms of that of that know as a PriceSmart? to in customers would opportunity can a

Jose Luis Laparte

one because that always question, you additional the on sometimes we’re or I the obviously also impact, of A years Let me actually an think of got week, going next Santa. closure, but benefit, that got I of the in same having the is year, to we March I we have the year. last it’s year this business our going guess, start This month repeat it April. sales to from sales We and when compared the March actually few about because we’re seeing the last with first report, month. were Semana the guess see start to the in we rush obviously

the feeling it’s we it’s March this, to hard get kind because combine way because say of result to to determine it’s of kind that’s good the hard April better or and worse, look -- it. of what we of view at way usually is we the a So, it, if

lose that or business. gain the you March that view see and that think or we what you that it. really expect on have our have usually we we the I April is how is depending You we on to But growth real conclusion can is combine made what

this So far in other was in not can activities Santa we Semana going month. of in that March, it minimize positive hopefully and probably April on falling having with impact

to our Now, question on different within are company the company. as your Aeropost, there on activities going we obviously integrate

to of to integrating how the take little within replace are have it did number opportunity we to of looking we the all we’re trying we the by platform, us. Is do at customers building mentioned, Obviously, the write that obviously, with at want selling to our priorities. do merchandise some Aeropost little do, the what realize the priorities the our platform. It as And within a is off from platform we PriceSmart a looking priority? within is things now Aeropost Obviously, but one current we’re we’re start little company that there platform. convert longer, will new PriceSmart different As an members. and that to refine you the we

Obviously obviously what market on get trying be where I omni-channel team addition one -- opportunity, that this and good obviously as they different us. Aeropost we that region, countries the actually, new to geography, a things plus will how are to trying the There we get basically some of we there, good we we’re faster figure this and a -- of and for that the there similar on accomplish hand, to time to us hopefully get lot geography the speak, brings little merchandise. we’re to So, table out more the can is guess, that prioritize our activities to are help can cover technology start on learning.

there obviously, as some from to eventually So, different not those, And those to would convert you customers of priorities. are Aeropost today. mentioned, one of be if members they are PriceSmart

Operator

Kansas The Instruction] Capital. go follow-up question Jon next from ahead. a Braatz Please [Operator City is

Jon Braatz

-- relevant big in dynamic versus the seeing? question. U.S. in sizable sort about How but is, your growth markets? Central is and online of is And you it’s in sort the your market American, your a a growth How talk don’t picture if South I market it bit markets? American Caribbean what online that Can little comparison the a they’re type Jose, in of -- of relative in

Jose Luis Laparte

Yes. say, as it’s not dynamic will in the as is I obviously U.S. it

in is seeing now, a the Right bit it’s little We’re direction. markets operate, fragmented. we that in going where that

markets exception are with the smaller of Our markets, Colombia.

retailers Colombia space. online some in have You bigger this are that already into

Falabella, little and culture have getting try you have their see shopping you have of a this this into Also and of bit some online. into customers culture Exito, that retailers. learning the You big of get and into to

they’re Colombia looking that out way, the MercadoLibre have it is now. in put Amazon and competition right a at which no, players? Do is Amazon have markets. Brazil, to obviously So, good they we an big presence there obviously Obviously, it Argentina, a Mexico, at is growing -- which actually different definitely. -- is are There of not of have they they America, South looking and

things. we’re competitors competition can new do different to facing companies think that coming. delivery actual I other more There more or I supermarket start we competitors. customers the more is will like going more start shop have I are smaller It that realize something or guess members Instacart like guess they So,

So, growing want a learn to this acquisition. we’re And obviously going Jon. lot definitely be is it And how that’s we to ready about this with a market.

Jon Braatz

go one I only website the will I If eliminated website really is the their to When website? yours, the all website on fully PriceSmart there -- that will shopping online in of and is now, be sort Aeropost. integrated, that incorporated your Aeropost so is on there be link will think and

Jose Luis Laparte

early I had think, that. we with some discussions

a be still guess think little -- probably I I will independent. both

yet. a be platform other eventually, be our But, all are some or you’re they from to determination still Aeropost. if -- countries people countries, a even a customer we’ll not Obviously, if that can made We member, of for have our haven’t PriceSmart a for members. in people not willing if they pricesmart.com

that to detail, We Jon. haven’t level got of

Jon Braatz

the last vehicle, that And delivery a there some I’ve that last… Okay. been speak, of current -- some delivery sort question. that read, getting with with so the has to in issues were one of the Is last countries. problem mile

Jose Luis Laparte

being States. -- happening leave they countries, mean, it’s is the here in leave market, are front important will in the lot our it in packages in them Obviously why just Yes, and they do can’t of our one our and something become pickup what be the where we from of points probably countries. here it point even comes stolen. a is because extra a very that’s the challenges a for PriceSmart hear in we of we if offering problem. That’s I and pickup customers door them becoming as

and hopefully that obviously someone us. picking big see fact something they pickup they we are customers else. in that as and a a will buy there, opportunity States, And points, would that long for at package in walk potentially, up growing the the So, the PriceSmart as see as also want be we

of we So, see some those efficiencies.

mile at deliveries package. our a quite still it, they start offering to it’s and with can’t and home are drop countries keep you homes to work, just going the delivery We’re that challenge but we people them in last not

everybody a we one be trend with And challenges. actually online we we PriceSmart will one allocate our offer see now; the not -- are new to of as become that probably some ability that the point, Jon. the will I is this has pickup be can we also, thinking going our only on where space going that clubs to building, for to because and building forward, in actually that locations, we remodels for probably in the of points probably our important ones Aeropost do that And have that think going deliveries. pickup that that’s So, we’re coming but one clubs space that

Operator

The next with Please ahead. from Roubaix Capital. question will be Hillary Christopher go

Christopher Hillary

the operating good any in ask, I progressing the had in Hi. year to you of and that you rest you and commentary can wanted Good progress see year? morning. how leverage just next quarter on share some your this into

John Heffner

the been our don’t can to we grow growth that se, that of provide do opportunity, we that sales. is guidance expenses to forward. would Well, but continue to nature we’ve Comp business that Christopher, continue as per leverage we hope our provides recently seeing and can going we

Christopher Hillary

to lot in would or challenging, markets. the markets? landscape point been traditional are about questions has helpful as either you it pertains there then, in your either out the retail the of But, online anything just And large way landscape that great. Okay,

Jose Luis Laparte

understand I’m your you sure I Christopher? again, the not Can question. question repeat

Christopher Hillary

have core landscape on your any we store. highlight, Sure. some had questions just markets, anything competitive good on retail given just commentary I if color asking to the in was just or you the online

Jose Luis Laparte

Yes.

the Obviously question, obviously by business, seen if guess America about good There we when presence still growing motor I the I brick I at your good regular the changes. format. haven’t big countries think think with and other region if have have is different where competition. any in Central that, on understood look obviously and so Walmart, you it we you region, you

stores, don’t we a Portugal and of think, are them, that changed discount with smaller retailers the and growing group dramatically. more that we think has anything to locations year company that stores. along well and one there their forgot of small keep is I the also, either Colombia as is discount years more they into with compete of [indiscernible] name growing they way, couple a with that store, growing put of I is them, it also have came growing out are ago discount Colombia few the I but stores

of all growth there lot the we’re environment. the been learning has retail in of drastic I markets, much And think, actually the competitive these actually loans. think it pretty I in in we’re other. compete a slower, is changes any -- most each with Caribbean, to don’t how

new hasn’t any competition put there been So, to it or way. nothing to that Christopher, highlight,

Operator

this back the question-and-answer to I session. for John like and turn would closing any Ladies gentlemen, over our conference Heffner remarks. concludes to

John Heffner

you you, us participating for Thank today. Chad. with ends call. thank Well, our This

Operator

The is now attending presentation. today’s for concluded. you. conference Thank you Thank

disconnect. now may You

PriceSmart (PSMT) 6 Apr 182018 Q2 Earnings call transcript