Personal Finance

PriceSmart Inc. Ends Its Sales Slump as Colombia Contributes to Growth


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The segment also contributed to higher overall profitability and membership gains as PriceSmart added 9,254 members, 3,500 of which were located in Colombia.

Those revenue gains were swamped by poor economic conditions in Trinidad, though. "The negative sales growth in the Caribbean segment driven largely by Trinidad," executives explained, "offset positive comparable sales growth in the Central American and Colombian segments."

Looking forward

Continued gains in the Colombian market will be critical to PriceSmart's business. That's because, while exchange rates have stabilized, they are still hurting the business. The yearly membership fee in that country, for example, has dropped to the equivalent of 20 U.S. dollars, or far below the $30 that the retailer charges in most of its other markets. Since Colombia is still a new segment, CEO Jose Luis Laparte and his executive team have resisted raising rates there to adjust to the currency slump, choosing instead to build up the subscriber base and establish a strong market-share position.

Executives made progress on that point, as renewal rates ticked up in Colombia. There's still a long way to go before that division is up to speed, given that PriceSmart's more mature markets enjoy much higher membership loyalty and overall profitability.

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Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends PriceSmart. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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