PriceSmart Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
October 31, 2023

There are 6 speakers on the call.

Operator

Good afternoon, everyone, and welcome to Price Mark Incorporated's Earnings Release Conference Call for the 4th quarter of fiscal year 2023, which ended on August 31, 2023. After remarks from our company's representatives, Robert Price, Interim Chief Executive Officer and Michael McCleary, Chief Financial Officer, call, you will be given an opportunity to ask questions as time permits. As a reminder, this conference call is limited to 1 hour and is meeting recorded today, Tuesday, October 31, 2023. A digital replay will be available following the conclusion of today's conference call through November 7, 2023, by dialing 877-674 7,070 for domestic callers or 416-764-8691 92 of International Callers and by entering the replay access code 496,180. For opening remarks, I would like to turn the call over to PriceSmart's Chief Financial Officer, Michael McCleary.

Operator

Please proceed, sir.

Speaker 1

Quarter, please press star.

Speaker 2

Thank you, operator, and welcome to PriceSmart, Inc. Earnings call for the Q4 of fiscal year 2023, which ended on August 31, 2023. Quarter, we will be discussing the information that we provided in our earnings press release and our 10 ks, which were both released yesterday afternoon, October 30, 2023. Also in these remarks, we refer to non GAAP financial measures. You can find a reconciliation of our non GAAP financial measures to the most directly comparable GAAP measures in our earnings press release and our 10 ks.

Speaker 2

These documents are available on our Investor Relations website at investors. Pricemart.com, where you can also sign up for e mail alerts. As a reminder, all statements made on this conference call other than statements of historical fact quarter are forward looking statements concerning the company's anticipated plans, revenues and related matters. Forward looking statements include, but are not limited to, statements containing the words call, expect, believe, plan, will, may, should, estimate and some other expressions. All forward looking statements are based on current quarter's quarter.

Speaker 2

These statements are subject to risks and uncertainties call that could cause actual results to differ materially, including the risks detailed in the company's most recent annual report on Form 10 ks and other filings with the SEC, which are accessible call on the SEC's website at www.sec.gov. These risks may be updated from time to time. Quarter, the company undertakes no obligation to update forward looking statements made during this call. Now, I will turn the call over to Robert Price,

Speaker 3

quarter. Thank you, Michael. I would like to begin by expressing my sincere thanks quarter. And appreciation to our more than 11,000 employees for their amazing dedication and hard work. Quarter, our Chief Financial Officer, Michael will soon provide a detailed narrative for our Q4 and full year results.

Speaker 3

Expense charges during the Q4, the write off of our investment in the Trinidad packaging plant quarter and the settlement of a tax dispute. Our company had a very strong 4th quarter. Quarter, the fundamentals of our business are sound. Good growth in sales and improved expense ratio, quarter. A strong cash position and a much improved inventory and accounts payable compared to a year ago.

Speaker 3

Quarter, our management team delivered a solid financial performance. PriceSmart has 3 really significant assets that provide an optimistic outlook quarter. For the future of our company, one is our employee team, 11,000 dedicated and knowledgeable people who know the club business and know our markets. The second asset is our members, over 1,800,000 accounts quarter and over 3,000,000 cardholders. The 3rd asset is PriceSmart's good name in the region where we operate.

Speaker 3

Quarter, we are determined to leverage these assets in order to strengthen the value of the PriceSmart membership. Quarter, while continuing to improve our merchandise offering, we have added a strong representation of health services quarter and online shopping, which is increasingly important to our members. We continue to grow our business quarter. The business sales segment to fulfill an important opportunity in our markets. Quarter.

Speaker 3

I would like to conclude my remarks with a thank you to our shareholders. Now Michael will provide more detailed comments quarter on our financial results.

Speaker 2

Thank you, Robert. We finished the year with a strong 4th quarter as both revenues and net merchandise sales exceeded $1,000,000,000 quarter, net merchandise sales increased by 10% or 6.4% in constant currency. Comparable net merchandise sales increased by 8.8% or 5.2% in constant currency. For the fiscal year ended August 31, 2023, total net merchandise sales exceeded $4,300,000,000 and revenues exceeded $4,400,000,000 quarter, net merchandise sales increased by 9% or 8.3% in constant currency and comparable net merchandise sales increased by 7.1% quarter or 6.3% in constant currency for the 12 month period. By segment, in Central America, where we had 28 clubs at quarter end, quarter, net merchandise sales increased 13.6 percent or 7.1% in constant currency with an 11.4% increase in comparable net merchandise sales quarter or 5.2% in constant currency.

Speaker 2

All of our markets in Central America had positive comparable net merchandise sales growth. Our Central America segment contributed approximately quarter. The quarter, the Costa Rica cologne appreciated significantly against the dollar as compared to the same 3 month 12 month period a year ago, which was the primary contributor to the favorable currency quarter and consolidated net merchandise sales. In the Caribbean, where we had 14 clubs at quarter end, quarter, net merchandise sales increased 6% or 7.2% in constant currency and comparable net merchandise sales increased 5.8% quarter or 7.2% in constant currency. All of our markets in this segment had positive comparable net merchandise sales growth.

Speaker 2

Quarter, our Caribbean region contributed approximately 170 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter. Quarter, in Colombia, where we had 9 clubs open at quarter end, net merchandise sales increased 2.1% or 0.1% in constant currency quarter and comparable net merchandise sales increased 2.8% or 0.6% in constant currency. Our Columbia region contributed approximately 30 basis points of positive impact to the growth quarter. In terms of merchandise categories, when comparing our 4th quarter sales to the same period in the prior year, quarter, our foods category grew approximately 10%, our non foods category increased approximately 7%, our food services and bakery categories increased approximately 8% quarter and our health services including optical, audiology and pharmacy increased approximately 91%. Membership accounts grew 2.5% versus prior year to 1,810,000 accounts with a 12 month renewal rate of 86.9% as of August 31, 2023.

Speaker 2

Quarter, platinum membership accounts are 8.9 percent of our total membership base as of August 31, 2023, an increase from 7.4% as of August 31, 2022. For the quarter ended August 31, 2023, membership income was $17,200,000 quarter, an increase of 10.6% over the same period last year. Following many years where our annual membership fee for 2 cards has been $35 in most markets, $75 for Platinum, we recently decided to raise our fee by $5 in most markets for all membership types. We expect these fee increases to take place on a staggered basis quarter in most countries during fiscal year 2024. Total gross margin for the Q4 of fiscal year 2023 as a percentage of net merchandise sales increased 10 basis points quarter of 15.6% versus 15.5% in the Q4 of fiscal year 2022.

Speaker 2

In total dollars, total gross margin increased $16,300,000 or approximately 10.6% versus the same quarter of the prior fiscal year. Quarter, total revenue margins increased 20 basis points to 17.1 percent of total revenue when compared to the same period last year, primarily due to the increase in total gross margin. Quarter, the average price per item increased approximately 7.3% year over year, down from the high of approximately 10% in Q1 of this fiscal year. Quarter, however, we continue to see the price and FX pressures impact aggregate demand as the average items per basket decreased approximately 2.1% compared to the same period of the prior year. During the quarter, our average sales ticket and transactions both grew 4.9% versus the same prior year period.

Speaker 2

Quarter, total SG and A expenses increased to 14.2 percent of total revenues for the Q4 of fiscal year 2023, compared to 13.1% for the Q4 of fiscal year 2022. This 110 basis point increase is primarily driven by 2 significant expenses during this quarter. Quarter, we incurred $9,200,000 in expenses related to the settlement of a minimum tax dispute with tax authorities in one of the markets where we operate, quarter, which contributed approximately 80 basis points to the increase in SG and A as a percentage of total revenues. Because of our low margin business, quarter, taxes based on sales can be significantly more burdensome than traditional taxes based on income. However, after several years of litigation quarter, in which we challenged the legality of the minimum tax on constitutional and other grounds, we decided the best course of action was to settle this dispute in order to create certainty quarter.

Speaker 2

Now that we have established certainty on this matter, we believe we will be able to continue operating our business profitably in this country. Quarter, we took a $5,700,000 impairment charge and related closure costs primarily for the write down of assets of our Trinidad Sustainable Packaging quarter. We also saw a significant increase in our manufacturing materials using compostable or recyclable inputs. However, we found that achieving economic feasibility quarter. The increase in SG and A expenses as a percentage of revenue was partially offset by a 50 basis point decrease quarter and general and administrative expenses as a percentage of revenue, primarily driven by lower costs from CEO compensation savings and leveraging of expenses.

Speaker 2

Quarter, operating income for the quarter decreased 17.5 percent from the same period last year to $32,100,000 primarily due to costs associated with the minimum tax settlement quarter. Operating income for the fiscal year 2023 increased 10.4% from the same period last year to $184,500,000 quarter. Despite these costs, we recorded a $1,500,000 net loss in total other expense net in the Q4 of fiscal year 2023 compared to a $3,500,000 net loss in total other expense net in the same period last year, primarily due to an increase in interest income of $3,000,000 quarter. Because of significantly more investment of surplus cash at higher yields, which was partially offset by an increase in other expense of $1,000,000 primarily due to an increase in quarter. Our effective tax rate for the Q4 fiscal 2023 came in higher than last year at 49.9% versus 34.2% a year ago, primarily attributable quarter to the comparably unfavorable impact of the minimum tax settlement and asset impairment and related closure costs.

Speaker 2

For fiscal year 2023, quarter, the effective tax rate was 35.4% compared to 33.2% for the prior year period. This increase is primarily driven by the comparably unfavorable impact of the minimum tax settlement, the write off of VAT receivables, Aeropost related write offs and asset impairment and related closure costs. Quarter, we estimate an annualized effective tax rate of about 32%. Quarter, net income for the Q4 of fiscal 2023 was $15,400,000 or $0.49 per diluted share compared to $23,300,000 or $0.75 quarter. Net income for fiscal year 2023 was $109,200,000 or $3.50 per diluted share, quarter compared to $104,500,000 or $3.38 per diluted share in the comparable prior year period.

Speaker 2

Our earnings per share for the Q4 and fiscal year 2023 are both net of the negative impact of $0.30 per diluted share for cost related to the reserve for minimum tax settlement quarter and $0.18 per diluted share of asset impairment and closure costs. Adjusted net income for the Q4 of fiscal 2023 was $20,400,000 quarter for adjusted $0.65 per diluted share compared to adjusted net income of $23,300,000 or $0.75 per diluted share in the comparable prior year period. Quarter, adjusted EBITDA for the Q4 of fiscal year 2023 was $57,200,000 compared to $56,600,000 in the same period last year. Quarter, adjusted net income for the fiscal year 2023 was $126,500,000 or an adjusted $4.06 per diluted share quarter compared to adjusted net income of $103,100,000 or an adjusted $3.33 per diluted share in the comparable prior year period. Quarter, adjusted EBITDA for fiscal year 2023 was $275,700,000 compared to $234,900,000 in the same period last year.

Speaker 2

For both Q4 and fiscal year 2023 adjusted net income and adjusted EBITDA, they are both impacted by net charges of $9,200,000 or $0.30 quarter diluted share related to our minimum tax settlement. Moving on to our strong balance sheet, we ended the quarter with cash, cash equivalents quarter and restricted cash totaling $252,200,000 From a cash flow perspective, net cash provided by operating activities totaled $257,300,000 fiscal year 2023 compared to $121,800,000 for the same prior year period. Fits in working capital generated from changes in our merchandise inventory quarter. Accounts payable positions for fiscal year 2023 contributed $84,900,000 of cash flow compared to the same prior year period. Quarter, average inventory per club decreased by approximately $45,000 or 0.5 percent and inventory days on hand decreased by approximately 5 days quarter or 10% for the Q4 of fiscal year 2023 versus the same period in 2022.

Speaker 2

The year over year drivers of the decrease of inventory per club related to selling through much of our overstock merchandise in our non food segment for which we took significant markdowns in the prior year combined with quarter. Great efforts by our team to improve inventory flow and management. Net cash used in investing activities increased by $147,300,000 for fiscal year 2023 compared to the prior year, primarily as a result of increases in purchases of certificates of deposit. Quarter, net cash used in financing activities during fiscal year 2023 increased by $28,800,000 primarily from an increase in paydowns versus drawdowns quarter. Our short term borrowings compared to the same period a year ago.

Speaker 2

When reviewing our cash balances, it is important to note that as of August 31, we had $37,800,000 of cash, cash equivalent and short term investments denominated in local currency in Trinidad and Honduras, which we could not readily convert into U. S. Dollars. Quarter, we finalized this program during the current Q1 quarter with a repurchase of a total of approximately 1,007,000 shares of our common stock for approximately $75,000,000 quarter, now on to our growth drivers. Starting with real estate, we are truly excited to have opened our El Pollo Lotto Club located in Medellin, Colombia on September 1, 2023.

Speaker 2

Quarter, we are pleased to announce that the El Pueblo Club is our 2nd club in Medellin, our 10th club in Colombia and our 52nd warehouse club overall. Quarter, we also currently have 2 warehouse clubs under construction. We plan to open a warehouse club in Esquintlac, Guatemala on November 30, 2023, quarter and a warehouse club in Santa Ana, El Salvador in early 2024. Once these 2 new clubs are open, we'll be operating 54 warehouse clubs and we are quarter. In addition, we are currently remodeling several of our high volume clubs, quarter, which are in San Pedro, Sur Honduras, Santavo, Dominican Republic, Port of Spain, Trinidad and Tobago quarter and one of our clubs in San Salvador, El Salvador.

Speaker 2

We've recently entered into a lease agreement to extend the lease life and relocate our Miraflores Club in Guatemala to a nearby location. The Miraflores Club is our highest selling location in Guatemala. The new warehouse will have increased sales floor square footage and a greater number of parking spaces along with covered parking for our members. We continue to seek ways to improve our distribution quarter to better serve our members, lower the net landed cost of our merchandise and enhance operating activities. As part of this renewed focus on distribution infrastructure, quarter, we recently leased an approximately 120,000 square foot building in Panama City, Panama that will serve as a distribution center for our warehouse clubs in that market.

Speaker 2

Quarter, this distribution center will operate in a similar way to our regional distribution center in Costa Rica. During Q4, quarter, we also opened our new produce distribution center in El Tejas, Chimaltinango, Guatemala, which has 48,000 square feet of space. Quarter, the new El Tajar produced distribution center allows us to more easily deliver fresh produce to our clubs in Guatemala by working directly with local farmers and eliminating intermediaries. Quarter, we are now ready to begin the Q4. Turning now to membership value.

Speaker 2

As we've highlighted in previous calls, our privately owned members selection brand continues to be a high quality, good value alternative quarter in these times of high inflation and foreign currency fluctuations. During fiscal year 2023, our private label sales represented 26.3% quarter of our total merchandise sales. That's up 160 basis points from 24.7% in the comparable period of fiscal year 2022. Quarter, we continue to expand our suite of wellness services. We currently have 49 locations with optical centers and expect to have 53 opened by the end of fiscal year 2024.

Speaker 2

Quarter, our optical program provides 4 free eye exams with every membership and we performed over 35,000 eye exams during the quarter. Quarter, optical services are also an important component of our contributions to the communities in which our clubs are located. In partnership with Price Philanthropy's upper end of the CRISPR vision program, PriceSmart optometrists performed eye exams and personalized philanthropies purchased the glasses from our optical centers. We provide both the eye exam quarter and glasses for children and their families free of charge. We have provided 58,000 screenings, 13,000 exams and 10,000 eyeglasses to date through this program.

Speaker 2

Quarter, we currently have pharmacy centers in all 8 of our warehouse clubs in Costa Rica and 3 warehouse clubs in Panama. We expect to open 2 more pharmacies in Panama and 5 in Guatemala during year 2024. With respect to Audiology Centers, we ended fiscal year 2023 with 24 centers. Quarter, we expect to open 3 additional centers in Panama and 1 center in each of Colombia, Jamaica and Trinidad in fiscal year 2024. Quarter, our 3rd growth driver is our omni channel shopping options for our members, which reflects all sales in our digital channels, both in our app and on our desktop website.

Speaker 2

Quarter, we currently utilize pricemart.com and our app and other third party last mile delivery services to drive online sales. During the 4th quarter, quarter, total omni channel sales increased 18% as a percentage of net merchandise sales versus the same period in the prior year and represented 4.9% of net merchandise sales, quarter. Total orders increased 24% and the average transaction value increased 8.2% versus the prior year period. Quarter, as of August 31, 2023, approximately 60.9% of our members had created an online profile with pricemart.com and 15.4% of our quarter, total membership base has made a purchase on pikesmart.com. We believe that there are significant growth opportunities in our digital channel, and quarter, we will continue to invest in this part of the business to provide an enhanced omnichannel experience and additional value to our members.

Speaker 2

Quarter, more broadly with respect to our digital transformation process, we recently announced that David Price was appointed Executive Vice President and Chief Transformation Officer. Quarter, several key areas we're reporting to David, including information technology, prismart.com and the project management office. Quarter, we believe this organizational change will promote better collaboration, alignment and agility within the company as we execute on our digital transformation. Quarter, as part of this focus on omni channel and IT improvements, Wayne Sadden recently became our new Chief Information Officer after working with us in a consulting role call before onboarding efficiently. Wayne joins us with a wealth of experience and accomplishments in the field of information technology, call, along with demonstrated expertise in leading innovative digital transformation initiatives, optimizing IT operations and driving strategic growth through technology quarter.

Speaker 2

We are currently in various stages of implementation of several projects to support our digital transformation. Quarter, we have begun migrating to a new point of sale system, Alera, a Toshiba product, and we recently selected RedX Solutions quarter as a provider of unified supply chain and retail planning applications to improve our buying capabilities. We also are making upgrades to our warehouse and transportation management systems. Quarter, we expect these moves to increase efficiencies and assist us in delivering on our value proposition to our members. Quarter, we continue to be an important component of how we approach our business and we do our best to incorporate practices that use natural resources quarter.

Speaker 2

Just to give a quick update, we opened 2 new recycling centers in El Salvador, giving us 7 in total, together with 3 in Honduras and 2 in Guatemala. Quarter, on average around £15,000 of recycled material is collected monthly in each location. We are on track to open more recycling centers in week of Dominican Republic and Panama by the end of fiscal year 2024. You can find more information about PriceSmart's philanthropic and corporate social responsibility efforts on pricemart quarter. Looking forward a little into Q1 2024, our comparable net merchandise sales for the 4 weeks ended October 1, 2023 quarter.

Speaker 2

We're up 8.9% or 5.5% in constant currency, with both Costa Rica and Colombia contributing positively from a foreign currency exchange rate perspective. Quarter. In closing, while we encountered some specific headwinds to our overall results during the quarter, when you back out the effects of these items, quarter, you can see that the core business continues strong. We remain committed to our people first culture. We believe that if you take care of your employees and members, quarter, success will naturally result from that.

Speaker 2

This people first attitude and our commitment to the 6 rights of merchandising provides the foundation upon which quarter, we delivered on the value proposition we promised to our members and has resulted in a strong end to our fiscal year and set the stage for a promising fiscal year 2024. Quarter, we will now turn the call over to the operator to take your questions. Operator, you may now start taking our caller's questions.

Operator

Quarter. Your first question is from Hector Amaya from Scotiabank. Please ask your question.

Speaker 1

Hi, thank you very much for taking my questions. First, could you please give us some details On a couple of strategic points, what could you tell us about the potential succession plan and timing for its quarter. And also, I don't know, is M and A something completely out of the question? I mean, is PRISEMART open to be a target for an acquisition? Quarter.

Speaker 1

And what would it take for the company to consider a significantly more ambitious store opening plan? I have a couple of follow ups after this. Thank you.

Speaker 4

Question and then M and A.

Speaker 3

This is Robert. We can't comment on anything like M and A. I mean, that's just not anything As far as succession planning, nothing specific, But you have to remember that really this is a team. It's not one person and we have a very strong team and I feel very comfortable with the management team. So I don't think there's anything to comment on with the succession today.

Speaker 3

I don't know what your last question

Speaker 1

Yes, thank you. I was asking is why would it take for the company

Speaker 3

I think we'd have to be comfortable that we could enter it would Probably require going to another country or because obviously, In the countries we are in now in terms of store openings, there is opportunity, but it's not huge. So I think as far as Being more aggressive about growth in that area, we would have to consider another country probably.

Speaker 1

Thank you. I understand. I also want to know quarter, the buyback program has been completed and I understand it has been noted in the company filings that there are no quarter repurchase plans for the moment. So I just wanted to see if you could share more details on your reasoning quarter, we will not continue this program and what would it take for the Board to change its mind on this issue.

Speaker 2

About what? About the buybacks. I think

Speaker 3

I'm not sure. I'm having trouble understanding

Speaker 2

what he quarter Yes. What would it take

Speaker 4

we said in the press release that we didn't have any additional approved plans For buybacks at this point. I mean, that's a point in time reference, I think, and we

Speaker 2

just finished up our credit plan.

Speaker 3

What is your question?

Speaker 1

Yes. Just wanted to understand why are you stopping or not Considering any further buyback programs, what could change for you to start doing this again?

Speaker 3

Well, we will consider all alternatives. It's not like we're not considering this, but we look at everything.

Speaker 1

Okay. And also on taxes, how much of a risk quarter, are you seeing that the impact you saw this quarter could become a recurring issue? And what do you believe quarter that we should consider as a new level of effective tax rate from now on?

Speaker 2

So Hector, I think

Speaker 4

We tried to carve out the difference. So the $7,000,000 $7,200,000 related to prior years and $2,000,000 is included quarter in the warehouse expense related to the fiscal 'twenty three. So for an order of magnitude, I think the $2,000,000 would be at a better reference. Now, quarter, maybe somewhat counterintuitively, since this is a sales tax based on sales, we are required quarter, we expect to include that in operating income as an expense as opposed to in the tax line. So it does impact the quarter, we expect the tax rate by lowering the denominator a little bit.

Speaker 4

But as I said in my remarks, at this point, fiscal 'twenty four, even including the impacts of this minimum tax on fiscal 'twenty four, we're still looking to get to around 32% effective tax rate for 24.

Speaker 1

Thank you. Very clear. Thank you very much.

Speaker 2

Yeah, Ken.

Operator

Thank you. Your next question is from Jean Graetz Prime Kansas City Capital. Please ask your question.

Speaker 5

Good morning, Michael, Robert. Michael, you've taken Some pricing actions in Colombia and other countries because of the inflationary pressures. And I guess my question is, we saw some sequential improvement in the gross margin in the 4th quarter. Is there any change in that in your pricing strategy or was it just Sort of a seasonal improvement in the gross margin.

Speaker 2

Yes, I guess, John, there's a

Speaker 4

lot of moving pieces at any point in time. I think quarter on quarter, you saw probably about 30 basis points improvement during the quarter. So Yes, there's a lot of moving pieces in a lot of different countries that we operate in at any point in time. So obviously, Colombia is still a big focus area for us and we're still quarter, we're offering, we're working hard to offer the best value to our members there and increase That average purchase level for our members, but as I said, kind of at any point in time, changing 20 basis Point probably isn't necessarily a directional indicator, just kind

Speaker 5

of Okay. Is there a point where In Colombia specifically, if the currency stabilizes, let's say around $4,000 or something like that, Is there a point where you might begin to increase prices a little bit?

Speaker 3

Well, the idea of this business It's giving people better value all the time. So the idea of increasing prices isn't part of our DNA. I think What we are trying to do is to build a long term business where our members are going to be confident that When they walk in the building, they are getting the best price we

Speaker 5

Okay. In the 10 ks, there's a couple of comments about some issues in Guatemala and Panama in terms of roadblocks that might create some issues to some of your stores in those markets. Can you give us a little update on that situation there? And in fact, did it have much impact On your revenues in October in those markets?

Speaker 3

Quarter, as we understand now the situation in Guatemala has calmed down. I am not sure today what's going on in Panama. It's had some effect. I don't think it's significant in terms of what the overall October numbers will be. I think we've Probably lost some sales, but you won't notice it as far as our reporting.

Speaker 5

Yes. Okay. Okay. And then lastly, you're increasing membership fees From $35 to $40 about 14%. Any thoughts and you haven't increased membership fees for a while And maybe if you look back and maybe there have been some prior increases, but any thoughts on what impact that Might have on the membership roles, do you see a little bit of do you see somewhat of a decline And memberships because of the higher price increases, higher fee increase?

Speaker 3

At this point, we haven't seen any decline. I think The $5 is fairly nominal. I think the issue is more important is How the members perceive the value they're getting for that $5 increase in the overall membership fee. And it's up to us to continue to improve that value. I think we have the capacity to far outweigh the $5 membership increase with better values to our members.

Speaker 3

I don't think the $5 is going to be what makes them decide to be a member or not. I think it's going to be are they feeling that By being a member at all, it really is something that benefits them. And we really believe that based It's on shopping patterns that people appreciate and value that membership. I would just add one thing And I should have said it in my opening remarks. From what I can tell about this business in the region we operate, We are probably and I would feel very comfortable saying this, that we are the most respected and trusted brand of any business operating in this region.

Speaker 3

And I think that's

Speaker 2

quarter,

Speaker 3

we are not I think we will take advantage of in the future. And the idea of growth, I quarter, the idea of going into other countries and growing, but you have to have healthy growth. You can't just have growth because it looks Good that you have more clubs, we will have more clubs. But what's really important is leveraging on what we already have. We have almost 2,000,000 accounts and 3,000,000 cardholders who represent the very best

Speaker 1

conference

Operator

call. Thank you. There are no further questions at this time. I will now hand the call back to Mr. Commentary for the closing remarks.

Speaker 4

Okay. Thank you, everybody, and we hope you all

Speaker 2

have a great day. Take care. Bye bye.

Operator

Quarter. Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect.

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