PriceSmart Inc. (NASDAQ:PSMT) Q3 2019 Earnings Conference Call - Final Transcript

Jul 10, 2019 • 08:00 pm ET

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PriceSmart Inc. (NASDAQ:PSMT) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Sherry S. Bahrambeygui

just two weeks ago, I attended in Santo Domingo in the Dominican Republic. This smaller format club is different in the sense that it's in a densely populated urban setting. Recognizing the demographic there, we've emphasized fresh organic and prepared foods and more specialty items, merchandised with a more updated look and feel. There are also additional modalities that we're testing there. In Club Bolivar, we're trying various newer initiatives to drive sales within a smaller footprint by exercising very strong SKU discipline and leveraging technology that supports our ability to use alternative and efficient means to get merchandise to our members at a good value. This club provides us with the opportunity to see how we can drive sales within a smaller footprint.

I also want to mention that we put real effort into green initiatives in practice with this club, including more biodegradable packaging, solar power, recycled materials for the steel superstructure and use of indigenous materials in the construction. Although it's only been two weeks, we're seeing higher than average penetration of food service sales, which we attribute to the central location and the updated offering and we expect this to drive frequency and traffic to the club.

I have to acknowledge how impressed I was with our team that I saw firsthand in the days and nights before the opening and how meticulous they were about addressing every last detail to ensure that each of the fixed rates of merchandising are being employed. It's really a beautiful club and we're excited about its prospects in this urban setting.

We are also getting ready for the opening of two additional clubs. The next opening will be our new club in Panama City, Panama. This will be our seventh club in Panama and will be followed by the opening of our fourth club in Guatemala located in San Cristobal. Our goal is to open both of these clubs by the peak holiday shopping season.

During Q3, we also closed on a key property in a location that we've been very excited about in Cayala, Guatemala. I'm very appreciative of our real estate operations, logistics and buying teams to really accelerated the pace and are working very hard to basically open four new clubs within a six- to seven-month period.

In addition to a lot of activity on the real estate front, we continue our work on the development of pricesmart.com. Our vision is to create an omni-channel member experience that includes a comprehensive digital catalog of merchandise available to be picked up at or delivered from the club or a regional distribution center as well as merchandise that's available for delivery directly from our vendors that will (technical difficulty) and also we will include cross-border shipments.

As we develop our omni-channel capabilities, we to continue to improve upon our analytics to help us better understand our members with a focus on improving their PriceSmart experience. This is no small task and requires promoting a culture that embraces the