DISCUSSION AND ANALYSIS BY THE MANAGEMENT OF PRICESMART INC OF THE FINANCIAL CONDITION AND OPERATING RESULTS (Form 10-Q)


Forward-looking statements

This Quarterly Report on Form 10-Q contains forward-looking statements
concerning PriceSmart, Inc.'s ("PriceSmart", the "Company" or "we")
anticipated future revenues and earnings, adequacy of future cash flows,
omni-channel initiatives, proposed warehouse club openings, the Company's
performance relative to competitors and related matters. These forward-looking
statements include, but are not limited to, statements containing the words
"expect," "believe," "will," "may," "should," "project," "estimate,"
"anticipated," "scheduled," "intend," and like expressions, and the negative
thereof. These statements are subject to risks and uncertainties that could
cause actual results to differ materially including, but not limited to: adverse
changes in economic conditions in our markets, natural disasters, compliance
risks, volatility in currency exchange rates and illiquidity of certain local
currencies in our markets, competition, consumer and small business spending
patterns, political instability, increased costs associated with the integration
of online commerce with our traditional business, whether the Company can
successfully execute strategic initiatives, cybersecurity breaches that could
cause disruptions in our systems or jeopardize the security of Member or
business information, cost increases from product and service providers,
interruption of supply chains, novel coronavirus (COVID-19) related factors and
challenges, including among others, the duration of the pandemic, the unknown
long-term economic impact, the impact of government policies and restrictions
that have limited access for our Members, and shifts in demand away from
discretionary or higher priced products to lower priced products, exposure to
product liability claims and product recalls, recoverability of moneys owed to
PriceSmart from governments, and other important factors discussed under the
captions "Item 1A. Risk Factors" and "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our Annual Report
on Form 10-K for the fiscal year ended August 31, 2021 filed with the United
States Securities and Exchange Commission ("SEC") on October 21, 2021. These
risk factors may be updated from time to time in our other filings with the SEC,
which are accessible on the SEC's website at www.sec.gov. Forward-looking
statements speak only as of the date that they are made, and the Company does
not undertake to update them, except as required by law. In addition, these
risks are not the only risks that the Company faces. The Company could also be
affected by additional factors that apply to all companies operating globally
and in the U.S., as well as other risks that are not presently known to the
Company or that the Company currently considers to be immaterial.



Overview

PriceSmart exists to improve the lives and businesses of our Members, our
employees and our communities by reliably and consistently providing quality
goods and valuable services at the lowest possible prices. We believe that lower
prices on products and services drive sales volume, which increases the
Company's buying leverage, which in turn leads to better pricing that we can
then offer to our Members, validating the value of the annual membership fee.

PriceSmart began operations in 1996 in San Diego, California, with the intent to
bring our U.S. style membership shopping warehouse club concept to underserved
countries. We currently operate 49 warehouse clubs in Central America, the
Caribbean and Colombia. Our Members also are able to shop on our e-commerce
platform, PriceSmart.com, which is available in all 13 markets.

We offer our individual and business Members a carefully-curated selection of
high quality, brand name and private label consumer products, essential goods
and direct-from-farm fresh produce. We also provide prepared foods and
fresh-baked goods. Most all merchandise is available for delivery or contactless
curbside pickup through our Click & Goâ„¢ service. Some of our clubs also provide
services that include Optical, Pharmacy, Audiology and Tire departments and
serve food at our food courts. Historically, our typical warehouse buildings
have ranged in sales floor size from approximately 40,000 to 60,000 square feet
and are located in and around the major cities in our markets to take advantage
of dense populations and relatively higher levels of disposable
income. Additionally, we operate smaller format clubs, with sales floors ranging
from approximately 30,000 to 40,000 square feet. These smaller format clubs
serve markets where the population may be less dense and/or where there may be
significant business to business opportunities. We also have utilized the
smaller format option to access and serve urban areas where it is difficult to
secure sufficient real estate at a reasonable cost. The option of using a
smaller format club, coupled with our omni-channel initiatives, helps us expand
our membership base and geographic reach in existing markets. We strategically
invest in technology to enhance Member experience and convenience. Technology
allows us to use valuable membership and other data to increase efficiencies and
use our insights about our Members to positively impact their lives. We also
provide wholesale supply services to a retailer in the Philippines.



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Logistics and distribution efficiencies are fundamental to delivering high
quality merchandise at low prices to our Members. We utilize regional
distribution centers in the U.S. and Costa Rica as well as several local
distribution centers to distribute merchandise efficiently, retain flexibility
and provide alternatives to source and transport goods, and mitigate the risk of
supply-chain disruption. As our business grows and includes more e-commerce
activity, we continually evaluate how to utilize our logistics and distribution
system to most efficiently provide merchandise to our Members. We also seek to
drive membership value and efficiencies by expanding our network of Produce
Distribution Centers and are exploring centralizing production activities, such
as bakery and meat processing.

Purchasing land and constructing warehouse clubs is generally our largest
ongoing capital investment. Securing land for warehouse club locations is
challenging in several of our markets because suitable sites at economically
feasible prices are difficult to find. Ownership of our real estate in many of
our markets provides several advantages, including lower operating expenses,
flexibility to expand or otherwise enhance our buildings, long-term control over
the use of the property and potential increase of value in future years. We own
and lease our real estate, depending upon the best available opportunities.

Our warehouse clubs currently operate in emerging markets that historically have
had higher growth rates and lower warehouse club market penetration than the
U.S. market. In the countries in which we operate, we do not currently face
direct competition from U.S. membership warehouse club operators. However, we do
face competition from various retail formats such as hypermarkets, supermarkets,
cash and carry, home improvement centers, electronic retailers, specialty
stores, convenience stores, traditional wholesale distribution and online sales.

The number of warehouse clubs for each country or territory were as follows:

                         Number of           Number of
                      Warehouse Clubs     Warehouse Clubs
                     in Operation as of  in Operation as of
Country/Territory    November 30, 2021   November 30, 2020
Colombia                              9                   7
Costa Rica                            8                   8
Panama                                7                   7
Dominican Republic                    5                   5
Guatemala                             5                   4
Trinidad                              4                   4
Honduras                              3                   3
El Salvador                           2                   2
Nicaragua                             2                   2
Aruba                                 1                   1
Barbados                              1                   1
U.S. Virgin Islands                   1                   1
Jamaica                               1                   1
Totals                               49                  46


Our warehouse clubs, one regional distribution center and several smaller local
distribution centers are located in Latin America and the Caribbean, and our
corporate headquarters, U.S. buying operations and our larger regional
distribution center are located primarily in the United States. Our operating
segments are the United States, Central America, the Caribbean and Colombia.

We are currently proceeding with the construction of a standard format warehouse
club located within the city of Portmore, Jamaica. Portmore is a suburb west of
the capital city of Kingston. We expect to open this warehouse club, which will
be our second warehouse club in Jamaica, in April 2022; it will also be our 50th
warehouse club.



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Factors affecting our business

The COVID-19 pandemic has resulted in significant challenges across our 13
markets since March 2020. Many markets imposed limitations, varying by market
and in frequency, on access to the Company's clubs and on the Company's club
operations, including in some cases frequent temporary club closures, a
reduction in the number of days during the week and hours per day the Company's
clubs were permitted to be open, restrictions on segments of the population
permitted to shop or circulate on particular days, and significant limits on the
number of people permitted to be in the club at the same time. We also
experienced product mix shifts due to changing consumer habits and/or government
imposed limitations on many non-food categories, decreases in purchases by many
business Members, particularly restaurants and hotels, and sporadic supply chain
challenges, which can impact inventory levels.

We are currently focusing on these four main priorities:

Protect the safety and well-being of our employees and members.

? Take proactive steps to protect and expand our supply chain options.

Expand technology-based purchasing and more efficient use of data.

• Manage cash flow and capital resources.

We recognize that this is an evolving and fluid situation; therefore, we are
vigilantly adapting to shifting consumer demands emerging from the pandemic. The
situation remains unpredictable in duration and intensity, and we continue to
see periodic reinstatements of stay-at-home orders and other restrictions. In
addition, we expect continued uncertainty in the economies of our markets as a
result of the pandemic and anticipate volatility in employment trends, industry
and consumer confidence and demand; volatility and liquidity of foreign currency
exchange rates; volatility of commodity prices; and possible fiscal austerity
measures taken by governments in our markets, which will likely impact our
results for the foreseeable future. For additional information, refer to the
risk factors discussed in Part I. "Item 1A. Risk Factors" in the Company's
Annual Report on Form 10-K for the year ended August 31, 2021.

Global economic trends, exchange rate volatility and other factors affecting the business

Our sales and profits vary from market to market depending on general economic
factors, including GDP growth; consumer preferences; foreign currency exchange
rates; political policies and social conditions; local demographic
characteristics (such as population growth); the number of years we have
operated in a particular market; and the level of retail and wholesale
competition in that market. The economies of many of our markets are dependent
on foreign trade, tourism, and foreign direct investments. Global and local
travel restrictions and a general slow-down in global economic activity as a
result of COVID-19 have significantly impacted and may continue to impact the
economies in several of our markets, causing significant declines in GDP and
employment and devaluations of local currencies against the U.S. dollar.

During the last half of fiscal year 2021 and continuing into fiscal 2022, we saw
several factors pressuring supply chains, including container shortages, port
delays, and truck and driver shortages. These disruptions and shortages are
impacting the timing of deliveries and leading to higher freight costs. Despite
all these issues, we continue to see strong sales. We are working to hold down
and/or mitigate the price increases passed on to the Members and maintain
sufficient inventory to grow sales. One key mitigating factor has been our
expanded network of distribution centers, which has facilitated alternative
routings of shipments, increased throughput, and provided flexibility to more
effectively mitigate these challenges. In addition, we have made strategic
investments in inventory and worked with our local vendors to source alternative
products, in order to reduce future out-of-stocks on high demand items that have
been impacted by these disruptions or that have been affected by electronic part
shortages. We expect pandemic-related conditions to continue throughout fiscal
2022.

Currency fluctuations can be one of the largest variables affecting our overall
sales and profit performance, as we have experienced in prior fiscal years,
because many of our markets are susceptible to foreign currency exchange rate
volatility. During the first three months of both fiscal year 2022 and 2021,
approximately 77.8% of our net merchandise sales were in currencies other than
the U.S. dollar. Of those sales, 48.5% and 49.5% consisted of sales of products
we purchased in U.S. dollars for each period, respectively.



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A devaluation of local currency reduces the value of sales and membership income
that is generated in that country when translated to U.S. dollars for our
consolidated results. In addition, when local currency experiences devaluation,
we may elect to increase the local currency price of imported merchandise to
maintain our target margins, which could impact demand for the merchandise
affected by the price increase. We may also modify the mix of imported versus
local merchandise and/or the source of imported merchandise in an effort to
mitigate the impact of currency fluctuations. Information about the effect of
local currency devaluations is discussed in "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Net Merchandise
Sales and Comparable Sales."

Our capture of total retail and wholesale sales can vary from market to market
due to competition and the availability of other shopping options for our
Members. Demographic characteristics within each of our markets can affect both
the overall level of sales and future sales growth opportunities. Certain island
markets, such as Aruba, Barbados and the U.S. Virgin Islands offer us limited
upside for sales growth given their overall market size.

Political and other factors in each of our markets may have significant effects
on our business. For example, the civil unrest in Colombia paralyzed significant
portions of the country's infrastructure as roadblocks and riots disrupted
normal economic activity during the third quarter of fiscal 2021. Austerity and
tax reform measures for Colombia and other Latin American countries with high
national debt levels and income disparity pose a risk for political instability.
Similar unrest happened in Nicaragua and Honduras in 2018 and 2019,
respectively; Costa Rica also had a general strike against tax reform measures
that significantly impeded regular economic activity in 2018. Events of this
sort have, and may continue to have, an adverse effect on our business.

Our operations are subject to volatile weather conditions and natural disasters.
In November 2020, Hurricanes Eta and Iota brought severe rainfall, winds, and
flooding to a significant portion of Central America, especially Honduras, that
caused significant damage to parts of that country's infrastructure. Although
our warehouse clubs were not significantly affected and we were able to manage
our supply chain to keep our warehouse clubs stocked with merchandise, these
natural disasters could adversely impact our overall sales, costs and profit
performance in the future.

In the past, we have experienced a lack of availability of U.S. dollars in
certain markets (U.S. dollar illiquidity), particularly in Trinidad. This can
and has impeded our ability to convert local currencies obtained through
merchandise sales into U.S. dollars to settle the U.S. dollar liabilities
associated with our imported products and to otherwise redeploy these funds in
our Company. This illiquidity also increases our foreign exchange exposure to
any devaluation of the local currency relative to the U.S. dollar. During fiscal
year 2021 and continuing into fiscal year 2022, we continue to experience
significant limitations on our ability to convert Trinidad dollars to U.S.
dollars or other tradeable currencies. As liquidity conditions have tightened,
we have raised prices on imported goods in Trinidad due to increased costs of
conversion of Trinidad dollars to U.S. dollars and risks associated with
continued illiquidity. We have also sought to shift the purchase of certain
goods to local sources where appropriate, and we are actively seeking to
exchange Trinidad dollars for tradeable currencies to manage our exposure to any
potential devaluation. In addition, we significantly limited shipments of goods
from the U.S. to Trinidad during most of fiscal 2021 and continuing into fiscal
2022 due to the illiquidity of the Trinidad dollar. We further reduced our
already limited shipments in the last quarter of fiscal 2021 because of the
government imposed restrictions on non-essential items during that period.
However, while shipments remained low relative to historic levels, shipments did
increase sequentially from the fourth quarter of fiscal 2021 to the first
quarter of fiscal 2022 in connection with the government's lifting of
restrictions on sales of non-essential items during the first quarter.

We continue to explore and execute several options to increase our ability to
generate more reliable sources of U.S. dollars in Trinidad, some of which may
lead us to incur additional expenses. For instance, in December 2021, we
executed a loan whereby we received $25 million of U.S. dollars, but the
associated principal and interest will be repaid in Trinidad dollars (converted
at rates in effect in December 2021) over a four-year period, thereby locking in
the conversion of a significant amount of Trinidad dollars at current conversion
rates and freeing up this cash in U.S. dollars for deployment for general
corporate purposes.

As of November 30, 2021, our Trinidad subsidiary had Trinidad dollar denominated
cash and cash equivalents and short and long-term investments measured in U.S.
dollars of approximately $49.9 million, a decrease of $3.0 million from August
31, 2021 when these same balances were approximately $52.9 million. The Trinidad
central bank manages the exchange rate of the Trinidad dollar with the U.S.
dollar. While the Trinidad government has publicly stated it has no intention to
devalue the Trinidad dollar, it could in the future decide to devalue the
currency to improve market liquidity, resulting in a devaluation in the U.S.
dollar value of these cash and investments balances.



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If, for example, a hypothetical 20% devaluation of the Trinidad dollar were to
occur, the value of our Trinidad dollar cash and investments position, measured
in U.S. dollars, would decrease by approximately $10.0 million, with a
corresponding increase in Accumulated other comprehensive loss reflected on our
consolidated balance sheet. Separate from the Trinidad dollar denominated cash
and investments balances described above, as of November 30, 2021, we had a U.S.
dollar denominated monetary asset position of approximately $21.1 million in
Trinidad (net of U.S. dollar denominated liabilities), which would produce a
gain from a potential devaluation of Trinidad dollars. If, for example, a
hypothetical 20% devaluation of the Trinidad dollar occurred, the net effect on
Other income (expense), net on our consolidated statement of operations of
revaluing these U.S. dollar denominated net monetary assets would be an
approximate $4.2 million gain. While we may pay premiums or enter into financial
transactions at a discount from the official government rate to convert our
Trinidad dollars into U.S. dollars, we use the official exchange rate published
by the Central Bank of Trinidad and Tobago to measure the U.S. dollar equivalent
of Trinidad dollar-based revenues, expenses, assets and liabilities and the
Trinidad dollar equivalent of U.S. dollar-based monetary assets and liabilities
for financial reporting purposes, as there are no other reliable references
available to translate or remeasure our revenues, expenses, assets and
liabilities.

Our Barbados subsidiary also began facing a U.S. dollar illiquidity situation in
fiscal 2020. The Barbados dollar has a conventional fixed-peg currency
arrangement, in which the Barbados dollar exchange rate is fixed to the U.S.
dollar. Thus, we do not expect a devaluation of this currency at this time. As
of November 30, 2021, our Barbados subsidiary had Barbados dollar denominated
cash and cash equivalents measured in U.S. dollars of approximately $3.3
million, which could not be readily converted to U.S. dollars for general use
within the Company. However, this balance has decreased significantly from the
$12.4 million balance as of August 31, 2021.



Corporate mission and strategy

PriceSmart exists to improve the lives and businesses of our Members, our
employees, and our communities through the responsible delivery of the best
quality goods and services at the lowest possible prices. Our mission is to
serve as a model company, which operates profitably and provides a good return
to our investors, by providing Members in emerging and developing markets with
exciting, high-quality merchandise sourced from around the world and valuable
services at compelling prices in safe U.S.-style clubs and through
PriceSmart.com. We prioritize the well-being and safety of our Members and
employees. We provide good jobs, fair wages and benefits and the opportunity for
growth. We strive to treat our suppliers right and empower them when we can. We
conduct ourselves in a socially responsible manner as we endeavor to improve the
quality of the lives of our Members and their businesses, while respecting the
environment and the laws of all the countries in which we operate. The annual
membership fee enables us to operate our business with lower margins than
traditional retail stores. As we increase our technological capabilities, we are
increasing our tools to drive sales and operational efficiencies. We believe we
are well-positioned to blend the excitement and appeal of our brick-and-mortar
business with the convenience and additional benefits of online shopping and
services.

Growth

As we look to the future, our business is focused on three main drivers of growth:

?Real estate – New clubs and distribution facilities

? Membership value

Additional sales generated from PriceSmart.com and digital and online capabilities

Real Estate - New Clubs and Distribution Facilities. We continue to actively
seek opportunities to expand our geographic footprint for brick-and-mortar
warehouse clubs. Our 50th club is scheduled to open in Jamaica in April 2022. We
intend to continue, and even accelerate, our current pace of club growth over
the next 3-5 years and to continue to explore and evaluate opportunities in new
markets. Our growth strategy, as it pertains to real estate, includes physical
distribution centers of various types to most efficiently support the flow of
merchandise from the supplier to the Member, be it sales generated from the
clubs or through PriceSmart.com. Also, the need for optionality in today's world
has proven essential. Therefore, we plan to make appropriate investments in our
distribution network to maximize efficiencies, minimize supply chain disruption,
and to provide optimal support for a growing e-commerce business. In addition to
our distribution center in Miami, Florida, we also operate a regional
distribution center in Costa Rica and are actively considering others. We also
intend to expand our network of Produce Distribution Centers. In some cases,
these facilities also provide the opportunity to capture efficiencies by
centralizing certain production activities, such as bakery, meat processing,
packaging and labeling.

Membership Value. Driving membership value leads to a higher membership base,
the opportunity to increase the membership fee when appropriate, and contributes
to the bottom line of the business. We focus on growth of our membership base,
member renewal rates and spend per Member as part of how we determine how
Members see our value. By adding more



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benefits that Members can only obtain with us, we expect to see growth in
Membership income. Recent examples include: additional services such as the
ability for all of our Members to transact on PriceSmart.com; Click & Goâ„¢
curbside pickup and delivery service in all of our clubs; and the implementation
and expansion of our Well-being initiative, which offers Optical services with
free eye exams for the member and additional members of their families and
deeply discounted eyeglass frames, Audiology services with free hearing exams
and deeply discounted hearing aids, and Pharmacy, which provides a significant
convenience to our Members.

Another driver of Membership value is our private label offering, which we are
working to expand. Private label also provides us the opportunity to source
quality items locally when appropriate. Select local sourcing has multiple
benefits including support of local communities in which we operate by
developing industry and creating direct and indirect jobs, mitigation of foreign
currency exchange risk, local currency procurement, and reduced supply chain
exposure. These initiatives offer additional benefits and services for our
Members whether they choose to shop on-line, in-club, or both.

Incremental sales generated from PriceSmart.com and digital and online
capabilities. Members continue to seek all the great value our distinct business
model provides in terms of quality, pricing and an exciting experience. However,
there is a growing expectation of consumers in our markets for convenience. We
continue to build capabilities and our offerings on PriceSmart.com. We also
build and apply technological tools to continue to learn more about and
strengthen our relationships with each of our Members. Together with data
analytics, we have been able to provide our Members with enhancements to the
membership experience. PriceSmart.com and these tools provide the opportunity
for us to continually strengthen and expand the scope of our relationship with
each Member and offer incremental products and services in the future.

Financial highlights for the first quarter of fiscal 2022 include:

“The total turnover increased by 11.2% compared to the same period of the previous year.

?Net merchandise sales increased 12.6% over the comparable prior year period. We
ended the quarter with 49 warehouse clubs compared to 46 warehouse clubs at the
end of the first quarter of fiscal 2021. Foreign currency exchange rate
fluctuations impacted net merchandise sales negatively by 1.0% versus the
comparable three-month period.

? Net sales of comparable merchandise (i.e. sales in the 46 warehouse clubs open for more than 13 ½

calendar months) for the completed 13 weeks November 28, 2021 increased by 9.4%. Fluctuations in exchange rates negatively impacted comparable merchandise net sales by 1.0%.

? Membership income for the first quarter of fiscal 2022 increased 11.2% to
$ 14.8 million.

?Total gross margins (net merchandise sales less associated cost of goods sold)
increased 11.9% over the prior-year period, and merchandise gross profits as a
percent of net merchandise sales were 16%, a decrease of 10 basis points (0.1%)
from the same period in the prior year.

? The operating result for the first quarter of fiscal 2022 was $ 46.0 million, an increase of 3.3%, or $ 1.5 million, compared to the first quarter of fiscal 2021.

?We recorded a $1.4 million gain in Other income (expense), net, primarily from
a $2.7 million gain from the sale of Aeropost, Inc., partially offset by a $1.9
million loss from foreign currency transactions, in the first quarter of fiscal
2022 compared to a $1.5 million net currency loss in the same period last year.
The gain from the sale of Aeropost, net of tax, resulted in a $1.5 million net
income gain and contributed $0.05 to basic and diluted net income per share in
the first quarter of fiscal 2022.

“Our effective tax rate increased in the first quarter of fiscal 2022 to 34.1% from 32.9% in the first quarter of fiscal 2021, primarily due to changes in uncertain tax positions.

?Net income attributable to PriceSmart for the first quarter of fiscal 2022 was
$30.5 million, or $0.98 per diluted share, compared to $27.7 million, or $0.90
per diluted share, in the first quarter of fiscal 2021.



COMPARISON OF THE 3 ENDED MONTHS NOVEMBER 30, 2021 and 2020

The following discussion and analysis compares the results of operations for the
three-month period ended on November 30, 2021 with the three-month period ended
on November 30, 2020 and should be read in conjunction with the consolidated
financial statements and the accompanying notes included elsewhere in this
report. Unless otherwise noted, all tables on the following pages present U.S.
dollar amounts in thousands. Certain percentages presented are calculated using
actual results prior to rounding.





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Net Merchandise Sales

The following tables indicate the net merchandise club sales in the segments in
which we operate and the percentage growth in net merchandise sales by segment
during the three months ended November 30, 2021 and November 30, 2020.

                                                Three Months Ended
                                    November 30, 2021                  November 30, 2020
                                               Increase
                                  % of net       from                             % of net
                        Amount     ?sales     prior year   Change      Amount      ?sales
Central America        $ 560,596     59.4 %  $     75,556   15.6 %  $    485,040     57.8 %
Caribbean                268,334     28.4          13,728    5.4         254,606     30.4
Colombia                 115,113     12.2          16,390   16.6          98,723     11.8
Net merchandise sales  $ 944,043    100.0 %  $    105,674   12.6 %  $    838,369    100.0 %

Comparison of the three completed months November 30, 2021 and November 30, 2020

Overall, total net merchandise sales grew 12.6% for the first quarter. The
increase resulted from an 11.3% increase in transactions and a 1.2% increase in
average ticket. Transactions represent the total number of visits our Members
make to our warehouse clubs and Click & Goâ„¢ curbside pickup and delivery service
transactions. Average ticket represents the amount our Members spend on each
visit or Click & Goâ„¢ order. We had 49 clubs in operation as of November 30, 2021
compared to 46 clubs as of November 30, 2020.

Net merchandise sales in our Central America segment increased 15.6% for the
three-months ended November 30, 2021. The increase had a 900 basis point (9.0%)
positive impact on total net merchandise sales growth. All markets within this
segment had positive net merchandise sales growth for the three-month period. We
added one new club to the segment when compared to the comparable prior-year
periods. We opened our fifth club in Guatemala in October 2021.

Net merchandise sales in our Caribbean segment increased 5.4% for the first
quarter. The increase for the quarter had a 160 basis point (1.6%) positive
impact on net merchandise sales growth. Our Dominican Republic market continued
its strong performance in the quarter with 16.8% growth. Our Aruba and Jamaica
markets also showed strong performance this quarter with 12.4% and 10.7% growth,
respectively. This strong performance was offset by our Trinidad market which
had declines in net merchandise sales for the same period. Trinidad sales were
adversely affected by our measured approach to rebalance our merchandise mix
following the reopening of the economy from the pandemic restrictions, and we
generally continue to manage our imports to be in line with the amounts of U.S.
dollars we expect to source in Trinidad. Net merchandise sales growth for
Trinidad improved during the first quarter of fiscal year 2022 compared to the
fourth quarter of fiscal 2021 as the Trinidad government lifted restrictions on
sales of non-essential merchandise, but sales have still not returned to the
level we achieved in the first quarter of fiscal 2021. Refer to "Management's
Discussion & Analysis - Factors Affecting Our Business" for more information
regarding the impact on us of the illiquidity of the Trinidad dollar.

Net sales of goods in our Colombia segment grew 16.6% for the first quarter. This increase had a positive impact of 200 basis points (2.0%) on the growth of total net merchandise sales. The main driver of the revenue increase for the quarter was the addition of two clubs to the segment compared to the same period last year. We opened our eighth club in
Colombia in december 2020 and our ninth club at Colombia in November 2021.

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The following table indicates the impact that currency exchange rates had on our
net merchandise sales in dollars and the percentage change from the three-month
period ended November 30, 2021. The term "currency exchange rates" refers to the
currency exchange rates we use to convert net merchandise and comparable net
merchandise sales for all countries where the functional currency is not the
U.S. dollar into U.S. dollars. We calculate the effect of changes in currency
exchange rates as the difference between current period activities translated
using the current period's currency exchange rates and the comparable prior year
period's currency exchange rates. We believe the disclosure of the effects of
currency exchange rate fluctuations on our results permits investors to
understand better the Company's underlying performance.

                               Currency exchange rate fluctuations for the
                                            Three months ended
                                            November 30, 2021
                               Amount                                    % change
Central America        $              (6,642)                               (1.4) %
Caribbean                                 874                                 0.4
Colombia                              (2,649)                               (2.7)
Net merchandise sales  $              (8,417)                               (1.0) %

Overall, the effects of currency fluctuations in our markets had an impact of approximately $ 8.4 million, or 100 basis points (1.0%), negative impact on net merchandise sales for the quarter ended November 30, 2021.

Currency fluctuations had a $6.6 million, or 140 basis point (1.4%), negative
impact on net merchandise sales in our Central America segment for the quarter
ended November 30, 2021. These currency fluctuations contributed approximately
80 basis points (0.8%) of the total negative impact on total net merchandise
sales for the current period. The Costa Rica Colón depreciated significantly
against the dollar as compared to the same three-month period a year ago, and
was a significant factor in the contribution to the unfavorable currency
fluctuations in this segment.

Currency fluctuations had a $0.9 million, or 40 basis point (0.4%), positive
impact on net merchandise sales in our Caribbean segment for the quarter ended
November 30, 2021. These currency fluctuations contributed approximately 10
basis points (0.1%) of positive impact on total net merchandise sales for the
period. The Dominican Republic experienced currency appreciation when compared
to the same period last year.

Currency fluctuations had a $2.6 million, or 270 basis point (2.7%), negative
impact on net merchandise sales in our Colombia segment for the quarter. These
currency fluctuations contributed approximately 30 basis points (0.3%) of the
total negative impact on total net merchandise sales for the quarter.

Comparable merchandise sales

We report comparable net merchandise sales on a "same week" basis with 13 weeks
in each quarter beginning on a Monday and ending on a Sunday. The periods are
established at the beginning of the fiscal year to provide as close of a match
as possible to the calendar month and quarter that is used for financial
reporting purposes. This approach equalizes the number of weekend days and
weekdays in each period for improved sales comparison, as we experience higher
merchandise club sales on the weekends. Each of the warehouse clubs used in the
calculations was open for at least 13 ½ calendar months before its results for
the current period were compared with its results for the prior period. As a
result, sales related to one of our warehouse clubs opened during calendar year
2021 will not be used in the calculation of comparable sales until they have
been open for at least 13 ½ months. Therefore, comparable net merchandise sales
includes 46 warehouse clubs for the thirteen-week period ended November 28,
2021.



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The following tables show the net sales of comparable merchandise in the reportable segments in which we operate and the percentage changes in net merchandise sales by segment during the thirteen week period ended. November 28, 2021 and November 29, 2020 compared to the previous year.

                                                   Thirteen Weeks Ended
                                       November 28, 2021          November 29, 2020
                                     % Increase/(decrease)      % Increase/(decrease)
                                         in comparable              in comparable
                                     net merchandise sales      net merchandise sales
Central America                                    14.1 %                    (0.7) %
Caribbean                                           5.0                        9.9
Colombia                                          (2.8)                        8.6
Consolidated comparable net
merchandise sales                                   9.4 %                      3.6 %

Comparison of completed thirteen-week periods November 28, 2021 and November 29, 2020

Comparable net merchandise sales for those warehouse clubs that were open for at
least 13 ½ months for some or all of the thirteen-week period ended November 28,
2021 increased 9.4%.

Comparable net merchandise sales in our Central America segment increased 14.1%
for the thirteen-week period ended November 28, 2021. All of our markets in
Central America had positive comparable net merchandise sales growth and this
increase contributed approximately 820 basis points (8.2%) of positive impact in
total comparable merchandise sales for the period.

Comparable net merchandise sales in our Caribbean segment increased 5.0% for the
thirteen-week period ended November 28, 2021. The increase contributed
approximately 150 basis points (1.5%) of positive impact on total comparable
merchandise sales for the period.

Our Dominican Republic market continued its strong performance in the
thirteen-week period with 16.8% comparable sales growth. Our Aruba and Jamaica
markets also showed strong performance this quarter with 12.9% and 7.7%
comparable sales growth, respectively. This strong performance was offset by our
Trinidad market, which declined in comparable net merchandise sales by 6.2% for
the thirteen-week period. Trinidad sales were adversely affected during most of
the first quarter because we limited merchandise shipments to the market due to
the ongoing U.S. dollar illiquidity situation. Refer to "Management's Discussion
& Analysis - Factors Affecting Our Business" for more discussion on the Trinidad
illiquidity situation.

Comparable net merchandise sales in our Colombia segment decreased 2.8% for the
thirteen-week period ended November 28, 2021. This decrease contributed
approximately 30 basis points (0.3%) of negative impact in total comparable
merchandise sales for the period. The decrease in Colombia during the current
quarter was primarily due to the foreign currency devaluation and sales
transfers from existing clubs included in the comparable net merchandise sales
calculation to new clubs not included in the calculation.

The following tables illustrate the impact of changes in exchange rates on our sales of comparable commodities in dollars and the percentage change for the thirteen week period ended. November 28, 2021.

                                        Currency Exchange Rate Fluctuations for the
                                                    Thirteen Weeks Ended
                                                     November 28, 2021
                                                Amount               % change
Central America                         $               (6,800)             (1.4) %
Caribbean                                                   867               0.3
Colombia                                                (2,538)             (2.5)
Consolidated comparable net
merchandise sales                       $               (8,471)             (1.0) %




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Overall, the combination of currency fluctuations within our markets had an impact of approximately $ 8.5 million, or 100 basis points (1.0%) negative impact on net sales of comparable merchandise for the thirteen week period ended November 28, 2021.

Currency fluctuations within our Central America segment contributed
approximately 80 basis points (0.8%) of negative impact in total comparable
merchandise sales for the thirteen-week period. Our Costa Rica market was the
main contributor as the market experienced currency devaluation when compared to
the same period last year.

Currency fluctuations within our Caribbean segment contributed approximately 10
basis points (0.1%) points of positive impact in total comparable merchandise
sales for the thirteen-week period. Our Dominican Republic market experienced
currency appreciation, which was partially offset by our Jamaica market, which
experienced currency devaluation when compared to the same period last year.

Currency fluctuations within our Colombia segment contributed approximately 30
basis points (0.3%) of negative impact in total comparable merchandise sales for
the thirteen-week period. This reflects the movement of the Colombian peso's
foreign currency exchange rate when compared to the same period a year ago.

Membership income

Membership income is recognized ratably over the one-year life of the
membership.

                                                        Three Months Ended
                                                   November 30,                           November 30,
                                                       2021                                   2020
                                                                        Membership
                                            Increase                   ?income % to
                                              from                   ?net merchandise
                              Amount       prior year    % Change       ?club sales          Amount
Membership income -
Central America             $     8,776   $        901      11.4 %            1.6  %     $        7,875
Membership income -
Caribbean                         3,973            262       7.1              1.5                 3,711
Membership income -
Colombia                          2,042            329      19.2              1.8                 1,713

Member Income – Total $ 14,791 $ 1,492 11.2%

1.6% $ 13,299

Number of accounts -
Central America                 917,929         78,542       9.4 %                              839,387
Number of accounts -
Caribbean                       432,144          4,273       1.0                                427,871
Number of accounts -
Colombia                        341,412         27,252       8.7                                314,160
Number of accounts -
Total                         1,691,485        110,067       7.0 %                            1,581,418


Comparison of the three completed months November 30, 2021 and November 30, 2020

The number of Member accounts as of November 30, 2021 was 7.0% higher than the
prior year period. Membership income increased 11.2% over the three-month period
ended November 30, 2021, compared to the prior-year period.

Membership income increased across all of our operating segments in the three
months ended November 30, 2021. The consolidated increase in membership income
is due to an increasing membership base since the start of fiscal year 2021.
Since August 31, 2021, all segments have increased their membership base.
Central America had the largest increase in membership in the first three months
of fiscal year 2022, with 9.4% growth, due primarily to the opening of our fifth
club in Guatemala in November 2021, followed by Colombia with an 8.7% increase
due primarily to the opening of our ninth club in that country and the Caribbean
with a 1.0% increase.



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We now offer the Platinum Membership program in all locations where PriceSmart
operates. The annual fee for a Platinum Membership in most markets is
approximately $75. The Platinum Membership program provides Members with a 2%
rebate on most items, up to an annual maximum of $500. We record the 2% rebate
as a reduction on net merchandise sales at the time of the sales transaction.
Platinum Membership accounts are 6.5% of our total membership base as of
November 30, 2021, an increase from 5.3% as of November 30, 2020. Platinum
Members tend to have higher renewal rates than our Diamond Members.

Our trailing twelve-month renewal rate was 89.0% and 81.9% for the periods ended
November 30, 2021 and November 30, 2020, respectively. The COVID-19 pandemic
caused a decrease in in-club traffic in the first quarter of fiscal year 2021,
resulting in fewer in-club visits and thus fewer renewals as most of our
renewals occur in the warehouse club. However, approximately 15% and 11% of our
membership sign-ups were completed using our online platform for the three-month
periods ended November 30, 2021 and November 30, 2020, respectively. Our online
platform facilitates capturing data and provides the opportunity for automatic
renewal of memberships, as well as improving our digital connection with our
Members.

Other Revenue

Other revenue primarily consists of non-merchandise revenue from freight and
handling fees generated from the marketplace and casillero operations we sold in
October 2021, interest-generating portfolio from our co-branded credit cards,
and rental income from operating leases where the Company is the lessor.

                                                 Three Months Ended
                                       November 30, 2021                 November 30, 2020
                                  Increase (decrease) from
                         Amount          ?prior year         % Change         Amount
Non-merchandise revenue  $ 3,307  $                 (9,348)   (73.9) %  $            12,655
Miscellaneous income       2,046                        549     36.7                  1,497
Rental income                635                       (96)   (13.1)                    731
Other revenue            $ 5,988  $                 (8,895)   (59.8) %  $            14,883

Comparison of the three completed months November 30, 2021 and November 30, 2020

The primary driver of the decrease in other revenue for the quarter is due to
the sale of our Aeropost subsidiary and its marketplace and casillero operations
on October 1, 2021. For additional information on the results of the
disposition, refer to "Item 1. Financial Statements: Notes to Consolidated
Financial Statements, Note 2 - Summary of Significant Accounting Policies."



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