Good morning or afternoon, everyone, and welcome to PriceSmart, Incorporated's Earnings Release Conference Call for the Fourth Quarter of Fiscal Year 2022, which ended on August 31, 2022. After remarks from our company's representatives, Sherry Bahrambeygui, Chief Executive Officer; and Michael McCleary, Chief Financial Officer, you will be given an opportunity to ask questions as time permits. As a reminder, this conference call is limited to one hour and is being recorded today, Tuesday, November 1, 2022. A digital replay will be available following the conclusion of today's conference call through November 8, 2022, by dialing 1 (877) 344-7529 for domestic callers or 1 (412) 317-0088 for international callers and by entering the replay access code 1071897. For opening remarks, I would like to turn the conference call over to PriceSmart's Chief Financial Officer, Michael McCleary. Please go ahead.

Thank you, operator, and welcome to the PriceSmart earnings call for the fourth quarter of fiscal year 2022 that ended on August 31, 2022. We will be discussing the information that we provided in our earnings press release and our 10-Q, which were both released yesterday afternoon, October 31, 2022. You can find these documents on our Investor Relations website at investors.pricesmart.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, 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 expect, believe, plan, will, may, should, estimate and similar expressions. All forward-looking statements are based on current expectations and assumptions as of today, November 1, 2022. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks detailed in the company's most recent annual report on Form 10-K and other filings with the SEC, which are accessible on the SEC's website at www.sec.gov. These risks may be updated from time to time. The company undertakes no obligation to update forward-looking statements made during this call. Now I will turn the call over to Sherry Bahrambeygui, PriceSmart's Chief Executive Officer.

Thank you, Michael. Good day, everyone, and welcome to our fourth quarter fiscal 2022 earnings call. We had another milestone quarter in Q4. Total revenues exceeded $1 billion for the quarter, and for fiscal year 2022, we exceeded $4 billion in total revenue. Net merchandise sales came in at $990 million, just shy of $1 billion, which represents year-over-year growth of 13.6% after a negative 2.9% currency impact. Comparable net merchandise sales increased by 9.2%, and that's after taking into account a negative 2.7% FX impact. Operating income increased 20% over the same quarter last year. Membership accounts grew to an all-time high of 1.76 million, and our renewal rates were 88.9%, holding strong. If you recall from our last earnings call, like many other retailers, we were in the thick of dealing with the fallout from the global supply chain disruptions. Our team has done a great job of being proactive and executing on the plan to mitigate the impact. We addressed the situation head on, and we selectively adjusted prices in areas where we were having an overstock issue so that we could promptly sell through the overstock categories and swiftly begin to rebalance our inventory mix and restore - begin restoring our intended margins. In turning back to the third quarter, we experienced a decrease in our total gross margin as a percentage of net merchandise sales due to higher than normal markdowns in several of our non-food categories, including furniture and seasonal items. During our last earnings call, we told you that our intention was to take decisive actions to swiftly sell through and hopefully be well positioned for the holiday season by the end of Q4. We gave you our expectation about the magnitude of the impact on our margin for Q3 - excuse me,…

Thank you, Sherry. Good morning or afternoon to everyone, and thanks for joining us today to talk about our fourth quarter results. Total revenues and net merchandise sales came in at $1.02 billion and $990 million for the quarter, respectively, increases of 12.3% and 13.6%, respectively, over the comparable prior year period. We ended this quarter with 50 warehouse clubs compared to 47 warehouse clubs at the end of the fourth quarter of fiscal 2021. Our comparable net merchandise sales growth for our fiscal fourth quarter was 9.2% for the 14 weeks ended September 4, 2022. Foreign currency fluctuations had a negative impact on net merchandise sales and comparable net merchandise sales growth of 2.9% and 2.7%, or approximately $24.8 million and $24.9 million, respectively. By segment, in Central America where we had 27 clubs at quarter end, net merchandise sales increased 11% with a 7.7% increase in comparable net merchandise sales. Foreign currency fluctuations had a negative impact on net merchandise and comparable net merchandise sales growth in Central America of approximately 3.4% and 3.2%, respectively, during the quarter. All of our markets in Central America had positive comparable net merchandise sales growth, except for Guatemala, which is experiencing sales transfers from other warehouse clubs to our new Aranda club. In the Caribbean region where we had 14 clubs at quarter end, total net merchandise sales increased 22.1%, and comparable net merchandise sales increased 15.7%. Trinidad and Tobago net merchandise sales increased 26.5% for the quarter and contributed 2.1% of our total net merchandise sales growth of 13.6%. The significant improvement in Trinidad versus the prior period was largely due to COVID-19 closures and restrictions last year, combined with our decisions to increase imported inventory levels in the current period to meet current demand, which has helped to increase…

[Operator Instructions] The first question today comes from Jon Braatz with Kansas City Capital. Please go ahead.

Good morning, Sherry, Mike.

Good morning.

Sherry, I appreciate the color on Colombia and the levers you can pull and so on, but the currencies depreciate quite a bit. Generally speaking, in broad terms, what are you seeing from the consumer and consumer behavior in Colombia as a result of the weakness in the Colombian peso? How is that affecting the consumer in Colombia?

Well, just like you would expect, there is a bit more conservatism, and their shopping patterns are tilting more towards the essentials and basic goods. We're seeing fewer items in the basket, and people are being much more measured. But our - I mean, we've given you the results of our overall performance there. I do believe there's an opportunity for us, and we've seen it in certain circumstances in the past, where when people become more disciplined about their spending, we play an even more important role, because we're known in our communities to not gouge, not play a high-low game. If we make a mistake, we make it in favor of the member. And we work extremely hard to get the best value we can for our members. So there's a conservatism, absolutely, and we're seeing it, but we're seeing it in other markets as well. But we're also seeing that we're very well received. I mean if you look back, our membership base has grown there. We went through a period a couple years ago where there was some retracting and - but now, we've been building again for FY 2022, but 2023 has some challenges. It may be challenging. I mean that's just the reality. So it's our job to do everything we can. And there are opportunities, which is amazing. There are opportunities where - like looking at our categories and our SKUs one by one, something that I don't think we've done in the past, go to that level. But we can be very strategic about our pricing structure on items and continue to earn the base and the trust of the members so they continue to not only shop with us, but rely on us and perhaps even win more business from them.

Okay. Sherry, you mentioned - you talked about your September sales. And there was a little bit of relative softness in the comps versus what we saw in the fourth quarter. Is that more broad based, or is that something more isolated to the issues that we're seeing in Colombia?

Well, Colombia had a significant - was a significant part of that. But we've had - I think Michael just shared with you, in Central America, we had pretty strong positive comps in all markets except for the Guatemala and - let's see here.

Okay. Yes, go ahead.

Let me see if Michael's got…

Yes, we did disclose in the 10-K a little bit of flavor about kind of recent results in Colombia. There's a little bit of extra flavor for Q4 and September and --

Okay. I must have missed that one. Speaking of the 10-K, Mike, there was a little sentence in there that says about your export sales and how you might be exploring opportunities in other markets beyond the Philippines. And I don't know if you've mentioned that before, I don't recall, but is there something - is there a new opportunity there you're working on?

We are. Jon, we have a pretty seasoned executive who is looking for opportunities for us to be able to sell through either a licensee or sell in other markets. And we - it's not material yet in terms of these new opportunities, so I prefer to wait and report on it when we've got some good results to share with you. But there are some - there's some progress that's being made on two fronts, and one is a very new idea, but that will allow us to have some additional income in the U.S. when we generate sales and profits through the export sales.

Okay. All right. Thank you very much.

All right. Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Sherry Bahrambeygui for any closing remarks.

I want to thank all of you and our employees and our investors for being part of our endeavor here to continue to bring good value to the members and do good things in our markets, especially during challenging times. We're very proud of our results, and we're committed to doing the very best we can as we go into 2023. So, hope you all have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.