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PriceSmart (PSMT) to Open Eighth Warehouse Club in Costa Rica

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PriceSmart, Inc. PSMT announced plans to open its 46th warehouse club in Liberia, Costa Rica on Jun 17. The club, which will be situated in the Guanacaste province, will be the company’s 8th club in Costa Rica. It will be about 130 miles from the closest PriceSmart club, and provide "Click and Go" services and other features to its members. As of now, PriceSmart has 45 warehouse clubs across 12 countries and one U.S. territory.

The company has been evaluating ways for convenient shopping. Impressively, management started rolling out the 'Click and Go' program across most of its Central America and Colombia markets during April. The latest program enables consumers to shop and place orders online, and then pick-up at club. In addition, its Assisted Shopping Program provides product information online and helps deliver orders quickly. Meanwhile, the company has been boosting delivery capabilities. These initiatives are minimizing human-to-human contact and in turn containing the spread of the virus.

In the wake of COVID-19, management has temporarily suspended significant capital spending and additional club developments. Moreover, it has implemented measures to reinforce its financial position amid such unprecedented times. During second-quarter fiscal 2020, management stated that it is likely to witness some negative impacts of the pandemic, particularly on sales, in the near term.

On May 7, PriceSmart released sales data for April. The company broke its three-month positive comparable net merchandise sales (comps) trend in April. Apparently, comps for the four weeks ended Apr 26 plunged 19.2% for 41 warehouse clubs. The metric was hurt by foreign currency fluctuations to the tune of $4.8 million or 2.1%. Also, net merchandise sales declined 10.9% to $216 million from $242.5 million a year ago. Currency-rate fluctuations negatively impacted the metric by $5.5 million or 2.2% in April. The dismal top-line performance in April mainly stemmed from COVID-19 impacts, which in turn resulted in lower traffic at the company’s warehouse clubs.

Shares of this membership shopping warehouse club operator have fallen 1.7% in the past three months against the industry’s 2.9% growth.

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