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SEC filingStrong Q2 results showed revenue growth of 9.7% to $1.5B and gross profit expansion of 13.4% to $265.1M, driven by membership gains including Platinum base increases, while higher capex supported warehouse expansions and supply chain upgrades.
Operating income climbed 15.6% to $75.4 million from $65.3 million, yielding a 5.0% operating margin. This outperformance arises as gross profit growth outpaced expense increases, demonstrating operational leverage in the warehouse club format. The company emphasizes that enhancing the size and efficiency of existing clubs, along with parking expansions at high-volume locations, represents a key path to boosting sales and profitability. Progress continued in the second quarter on migrating to the RELEX supply chain and inventory management software platform, positioning PriceSmart for sustained efficiency gains.
Cash generation remained solid, with net cash from operating activities at $133.3 million, supporting $44.9 million in free cash flow after $88.3 million in capital expenditures—up significantly from $62.8 million prior year. Growth expenditures target new clubs, purchases of previously leased properties, relocations to superior sites, supply chain enhancements, and major remodels. This aggressive investment underscores management's commitment to capacity expansion and operational upgrades, ensuring liquidity through a financing strategy that balances access to capital markets with minimized borrowing costs. Investments in technology are set to rise in coming periods to execute planned initiatives, reinforcing long-term scalability.