PriceSmart to expand Portmore location
JUST over two years after opening its location in Portmore, St Catherine, PriceSmart has announced that the store is to be expanded in response to high traffic. The Portmore location along with two others in Central America have been earmarked to get additional investments to increase the sales and profitability of those outfits.
This was disclosed in the company’s third-quarter report which mentioned the expansion under its growth segment. PriceSmart opened its Portmore location in April 2022 at a cost of US$20 million ($3.1 billion). This was PriceSmart’s second club in Jamaica. The expansion is expected to increase sales floor space by up to 20 per cent for Portmore and the two other regional clubs.
The international membership shopping business first opened a store at Red Hills Road, St Andrew in 2003. PriceSmart then expanded the parking space to a two-stories in mid-2018. PriceSmart even signed 20-year agreement with Kingston Wharves Limited (KWL) in July 2023 to lease a portion of KWL’s 300,000 square feet of integrated modular logistics complex to store products.
Although Jamaica’s numbers are not disaggregated in the earnings reports, the business garners strong local demand as evidenced by US$1.6 million ($228.75 million) in bakery sales for December 2019.
While it has been evidenced through formal applications to regulatory authorities, PriceSmart has yet to announce the opening of a third Jamaica location in St James, though it operates a bakery in the parish.
“Yeah, it’s not necessarily that you put more SKUs (stock keeping units) in. What happens is that the ability to display the products with better facing, they improve, so they have a bigger impact for each item and less labour related to stocking and handling the item. It improves the efficiency. And I think for the member, it presents a more compelling individual item value than the issue we have where we are trying to fit items into a more limited space. It just seems to make it more, both efficient and impactful,” said PriceSmart founder and interim Chief Executive Officer Robert Price to Kansas City Capital analyst Jon Braatz on the expansion plans.
PriceSmart intends to open its 55th club in Cartago, Costa Rica in Spring 2025. It will also be expanding the clubs in San Salvador, El Salvador and Liberia, Costa Rica. PriceSmart had opened two locations in San Salvador in 1999 and 2000 but has since opened an additional two locations in El Salvador with the latest one being opened in March at Santa Ana. PriceSmart opened the Liberia, Costa Rica location in June 2020 which was its eighth location in the country. The company is also remodelling its clubs in San Pedro Sula, Honduras; Santiago, Dominican Republic; and Port of Spain, Trinidad and Tobago.
PriceSmart grew its third quarter (March to May) revenue by 12 per cent to US$1.23 billion against the backdrop of higher net merchandise sales but missed analysts expectation by US$20 million. Despite higher operating costs, PriceSmart’s operating profit increased 16 per cent to US$49.91 million. The company’s earnings per share of US$1.08, was just US$0.04 below analyst estimates.
PriceSmart’s total assets were up to US$2.02 billion with cash and cash equivalents at US$128.27 million. Despite demonstrating another solid quarter of growth, PriceSmart’s stock price closed at US$80.23 despite opening the year at US$78.30 and peaking at US$82.56. This left the company’s stock price up six per cent in 2024 with a market capitalisation of US$2.46 billion.
