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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Q & A
Executive
Maarten O. Jager

sourcing and working with our suppliers, we're looking at the mix of imported versus local and just making sure that we exercise pricing discipline and all of this of course needs to be done with member value in mind in the competitive dynamics. But in short to Sherry's summarize, this is not the new normal and we think we can improve upon it.

Executive
Sherry S. Bahrambeygui

Yeah, we do have a strong focus and we are looking market-by-market very specifically at all aspects, including the competitive landscape, the cost of doing business, so there is a very concerted focus on making sure that margins are set appropriately with all of the relevant factors in mind and all within the discipline of delivering good value to our members. So there's a very disciplined approach we're taking to looking at margin going forward and so I would not expect that you would see the same as you have in last quarter.

Analyst
Jon Braatz

Maarten, Sherry, if you were to maybe excel at some of these in the quarter, some of these one-time items, you mentioned the markdowns and so on and so forth, is there any sense -- or can you give us a sense as to what those one-time items maybe amounted to in terms of reducing the margin?

Executive
Maarten O. Jager

Let me try to help you in part. So, now, we have mentioned markdowns in non-foods and cleaning up some of the inventory, that contributed about 30 to 35 basis points roughly, okay, of the 70 basis point line. All right, but then the rest of it, I don't have at my fingertips but I think it'll give you a pretty good indication.

Analyst
Jon Braatz

Okay. All right. I appreciate that. And then one final question. Sherry, you talked about the new location in Panama and using a lot more local merchandise. Compared to your other stores, how much it did -- what percentage of your merchandise in that store is locally derived? I'm curious as to sort of the relative difference between the big stores and this one?

Executive
Sherry S. Bahrambeygui

I don't know that I said anything about local merchandise and you're talking about the Veraguas Club, right now, that is in more of an agricultural rural (multiple speakers)

Analyst
Jon Braatz

Yes, exactly.

Executive
Sherry S. Bahrambeygui

No, I think the statement I made was that we were focused on meeting the member needs of that type of demographic, which is very distinct, for example, from the membership that we have in the Bolivar location just for the way of comparison. But they're -- with the type of agriculture that's out there and the products that they need in terms of machinery or tools...

Analyst
Jon Braatz

Okay. I'm sorry, I misinterpreted what you had said. When you look at store such as this and if it is proved successful, how might that expand your location opportunities across your markets?

Executive
Sherry S. Bahrambeygui

Well, it's too early to tell. I mean to be perfectly honest, personally I'm excited about the prospect but it really is too early to tell, because if it's