Good afternoon, everyone, and welcome to PriceSmart, Inc.'s earnings release conference call for the second quarter of fiscal year 2022, which ended on February 28th, 2022. After remarks from our company's representatives, Ms. 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, Friday, April 8th, 2022. A digital replay will be available following the conclusion of today's conference call through April 15th, 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 5341114.
For opening remarks, I would like to turn the call over to PriceSmart's Chief Financial Officer, Michael McCleary. Please proceed, sir.
Thank you, and welcome to the PriceSmart earnings call for the second quarter of fiscal year 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, April 7th, 2022. You can find these documents on our investor relations website at investors.pricesmart.com, where you can also sign up for email 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 some other expressions. All forward-looking statements are based on current expectations and assumptions as of today, April 8th, 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 second quarter fiscal 2022 earnings call. We've had quite a quarter, and with net merchandise sales surpassing $1 billion for the first time and membership setting historical records, we're feeling very positive about our results. During the second quarter, our total membership base has grown to more than 1.7 million accounts. That represents growth of 7.3% versus last year. Our membership 12-month renewal rate was 89.8%, reaching our highest rate ever, our highest renewal rate ever. Membership income was $15.1 million, an increase of 9.2% over the same period last year. Our headline numbers all grew over the prior comparable period.
In terms of the bigger picture, I think it's also worth noting that the results of this quarter are being compared to a quarter last year in which significant growth was achieved relative to the same quarter in FY 2020. Versus the same period last year, net merchandise sales increased by 12.6%. Comparable net merchandise sales increased by 10.3%. Operating income grew 7.4%, and that's despite currency headwinds, which impacted total and comparable net merchandise sales by 3% and 2.7%, respectively. Earnings grew 11.4% to $31.5 million versus $28.2 million for the same quarter last year. Driven by strong sales, the team at PriceSmart has delivered record earnings per share of $1.03 during the second quarter. This is versus $0.92 in Q2 of last year.
Now let's look forward a little bit into Q3. During March, ending on March 31, 2022, total net merchandise sales were $338 million, an increase of 9.9% over the same period in the prior year. Comparable net merchandise sales for the four-week period ending March 27th, 2022, increased over 9.8% compared to the comparable period last year. We're pleased with the results and believe that our investments in the business and our focus on our pillars of growth are supporting these results and the momentum that we continue to build. Our cash flow is robust. It enables us to accelerate plans and investments to continue to drive growth.
Importantly, it enables us to improve how we engage with, how we serve, and how we learn from our members, especially during the most challenging of times, which include the impacts of the pandemic, which continue, the significant supply chain disruptions, which are faced by many of us in this industry and others. The effects of the war in Ukraine and the challenges of an inflationary environment that we haven't seen in decades. Our cash position also ensures that our employees are properly cared for, that they have the opportunity to grow professionally, that they receive competitive wages and excellent benefits. As a result of many of these factors and the performance of the company, in the second quarter, our board of directors increased the annual dividend by 22.9% to $0.86 per share, up from $0.70 per share last year.
Now I'd like to turn to our growth drivers. On our last earnings call, I spoke to you about the three major drivers for growth for our company. The first, real estate, which includes opening new clubs, making investments in our distribution network, making sure that we're strategically located in the right places with the right facilities and equipment so that we can maximize efficiencies in the supply chain. The second driver of growth is continually developing new and improving on old ways to enhance the value of the PriceSmart membership. The third driver of growth was to drive incremental sales for the company through our pricesmart.com platform and improved digital capabilities, yielding important data to drive incremental sales for the company, whether the sales happen online or in club, because we believe these two environments should be mutually supportive and synergistic.
The pricesmart.com platform and other digital capabilities also allow us to potentially expand in existing markets and/or enter new markets, possibly without the immediate need for traditional brick-and-mortar locations and the huge investments that go with that. Starting with real estate, now I want to update you a little bit on what we've done on that first driver of growth. On Monday, we plan to be celebrating our 50th club milestone as we open our second club in Jamaica, located in the area of Portmore, near the capital of Kingston. We expect this club to do well and take some pressure off of the Kingston location, which is a very high producing but impacted club. A good sign is we're already seeing new signups well exceeding our plans for Portmore, which indicates to us that this market has significant untapped captured potential.
Also, I'm pleased to say that growth by way of a new club in Jamaica is also growth for our people and upward mobility for them professionally. Approximately 18% of our employees in Jamaica were promoted as a result of the new Portmore club. With regard to real estate, again, we also recently announced that construction has begun on our second warehouse club in Medellín, Colombia. It's located in the El Poblado area. We expect to open in the summer of 2023. We've been searching for a suitable site in this densely populated urban area for a long time. Kudos to the real estate and construction teams for making it happen. We're optimistic that our value proposition will resonate with consumers in this area due to its demographic characteristics, and this will be our 10th club in Colombia.
In addition to our curated selection of high-quality merchandise at great prices, both of these new clubs will be outfitted with our additional services in the wellness area, specifically optical and audiology. As I'd mentioned before, we're progressing on a very active pipeline for new locations in terms of clubs, and we will be able to share more about that as plans and permits are finalized. Another part of our real estate strategy focus is on the important role of our distribution facilities to optimize efficiencies and strive to reduce risk. We expect to soon have a distribution center in Trinidad that could also be used to export merchandise to our other markets. We're actively identifying opportunities for a new distribution center in northern Central America, and we're working on expanding our distribution footprint in Colombia.
We also are increasing our produce distribution centers, or we refer to them as PDCs throughout the company. We have four in operation at this time, and they include, Costa Rica, Panama, the Dominican Republic, and the most recent one in Colombia, which we opened last month. These PDCs not only support local agriculture and create jobs in and around our communities, but they also allow us to source directly and provide fresh produce to the clubs, allowing our members to benefit from more competitive pricing and also reducing spoilage, and other waste that leads to greater efficiencies. We're targeting two additional PDCs at this time, and they're likely to be in Guatemala and in Trinidad, but they are currently still in the planning phase.
With regard to logistics and distribution, again, a key area of real estate, and the importance of real estate for us, as everyone knows, supply chain disruptions remain pervasive, whether because of COVID, oil prices or other factors. Especially with regard to those exports from Asia. This has adversely impacted our suppliers' ability to deliver merchandise and our ability to secure transportation services from Asia and within the United States. Fortunately, our overall supply chain logistics network has remained relatively stable and reliable in its ability to replenish merchandise in our clubs. Effective collaborations and careful planning all throughout our supply chain has resulted in our ability to maintain good in-stock positions during our second quarter. Average freight costs from Asia were also lower during the second quarter versus the first quarter of fiscal year 2022. You know, we have to remain proactive and vigilant.
We certainly believe that we're still facing a continuing volatile, and unpredictable future in terms of the overall supply chain. We've recently added a new contracted carrier to our network that is expected to further reduce the average freight rate during the third quarter of fiscal 2022, and, we continue to remain very focused on this, it's a very important part of the business in these times. We're also increasing our efforts to nearshore select items without compromising on any of our quality or value, which will also allow for more reliability and diversification of our supply chain. Some examples I can share with you are textiles and domestics. For example, we're sourcing wonderful quality pillows from Guatemala and towels from El Salvador. We're looking at sparkling water, pork, and frozen fruits and vegetables, just to give you an example.
In addition, we are actively including local and regional suppliers and including them in our bidding process as we develop additional products that will carry our private label brand, Member's Selection. A recent example of this is the selection of a local vendor in Trinidad for our Member's Selection copy papers that will be sourced from Trinidad and is expected to be exported to all of our markets. Other than the benefits I've mentioned, that alone creates an export item that is developed largely utilizing TTs while generating income that is more easily converted to U.S. dollars. This specific example also contributes to helping iron out our situation in Trinidad with TTs that may not be readily exchangeable to U.S. do llars.
We are also exploring additional alternatives and ways that we can replicate this type of business initiative to be able to solve for many varied challenges that we're facing. You know, I have to congratulate our merchandising and distribution and logistics team and their great collaboration in handling these challenges and turning them into opportunities to make our business even stronger despite the additional challenges. Now let's turn to what we're doing to enhance the benefits of a PriceSmart membership. First, we are continuing to expand our private label offering. During the first six months of fiscal 2022, our private label sales represented 23.5% of our merchandise, total merchandise sales. That's up 200 basis points from 21.5% in fiscal year 2021.
That is a 9.3% increase in penetration of total sales versus FY 2021 for our private label. There are several benefits to investing in our private label offering in addition to what I've shared above. The opportunity to offer the same or better quality merchandise often exists at a lower price when we develop our own private label merchandise. We've got greater control of the supply chain. When we source locally or regionally, there are potential savings in transportation. Local sourcing for private label can generate more jobs in our markets. We also have, in some cases, the benefits of a natural currency hedge. It's a differentiator for PriceSmart because PriceSmart's private label Member's Selection is not available through other major retailers in the countries where we operate.
Sourcing our own merchandise gives us the opportunity to squeeze out inefficiencies and is also in line with one of our goals to increase our direct participation in the production to ensure our high quality standards are as good, if not exceed, the leading brand product. Our private label sales and domestics have grown over 180% through our new Member's Selection towels, pillows, sheets, and blankets. We've also introduced new SKUs of cookware, food storage, mixing bowls. Those have been very well received, and have shown the kind of sales that give us confidence that we're on the right track with expanding our private label offering. As I said before, our brand carries significant goodwill and trust amongst our members. It communicates high standards, reliability, and value.
Our private label team of merchants has been another key area of investment for the business because talent is important. Over the past two years, we've expanded this team from 6 - 11 people. Although we still maintain a limited number of SKUs as part of the overall business discipline, the SKUs we have been adding or replacing have contributed to this overall delivery of sales of $230 million during Q2. Job well done by our private label team and the related teams during Q2, and we plan to grow even more with our private label product development, sourcing, and sales. We believe our wellness program is another value driver for our membership. We currently have decided to expand audiology to about 30 locations by the end of this fiscal year and to about 40 by the end of Q2 next fiscal year.
Our decision was driven by membership interaction, partly due to the free hearing tests that we provide to our members, and the early determination that audiology appears to be a valuable contributor when analyzing renewal rates and the average annual purchases among members who utilize our services. In optical, we currently have 45 locations with optical centers and expect to have 47 open by the end of this fiscal year. This service provides up to four free eye exams with every membership. We also offer a broad range of quality lenses and frames at highly competitive prices in our market. For the period ending in February, we've seen total growth in optical sales of 79% over the same period last year, and year-to-date comparable growth of 15% over the same period last year.
We've also opened pharmacy centers in all eight warehouse clubs in Costa Rica, and we expect to have pharmacy centers in all of our Panamanian clubs by the end of fiscal year 2023. We continue to study pharmacy for additional countries as each country varies in dynamics and regulatory requirements. Now I'd like to turn to our third driver of growth, which is our digital environment that drives engagement and sales, and our digital channels, which include pricesmart.com. Total e-com sales represented 3.5% of total merchandise sales, and delivery continues to grow as a larger proportion of online sales. Our digital capabilities are accelerating and driving growth. When comparing this second fiscal quarter versus the comparable prior year period, online sessions increased 8%, leading to an increase in digital orders, online orders of 12%.
Meanwhile, the average online order value increased 13%. Pricesmart.com sales as a percentage of net merchandise sales increased 40 basis points during the second quarter versus the comparable prior year period. Our total sign-ups, which is also an area where we're seeing benefits of the ability to engage online using digital tools with our members. Of our total sign-ups, 15% of new memberships were purchased online during the quarter, and online renewals represented 4% of our total renewals for the company. During the quarter, we had more than 9,000 email interactions, more than 65,000 chat interactions with members, which we all believe further improves our ability to engage with the customer, provide better customer service, and learn from what our members are telling us.
As of February 28, 2022, approximately 42% of our members have created an online profile on pricesmart.com. We've effectively gone from about zero to almost half of our base having an online digital credential in less than two years. 14% of our total membership base has made a purchase on pricesmart.com. I'm sorry, I think I believe it's 15%. Michael, will you correct me on that?
I think it's 14. It's 14-15.
Okay. Just wanted to verify. 14% of our total membership base has made a purchase on pricesmart.com, and the average for online purchases on pricesmart.com in Q2 was 9.3% higher than the average ticket in club for in-club purchasers. We're seeing a material difference in the average ticket size for members who are buying online versus those who are buying in club, which presents additional opportunities. Also encouraging is that 7.5% of our total membership base is signed up with our auto-renewal option. What does that mean? They provided their email and opted to have their renewal automatically charged on their anniversary, and they've also provided a payment method for that charge. That goes a long way in terms of protecting membership income and ensuring that membership income leakage is reduced.
We're feeling solid about our progress in this area and are proud of what our tech and membership and finance teams have all made possible in a relatively short period of time. Lastly, I'd like to talk about ESG and sustainability, which continues to be a cornerstone of the PriceSmart philosophy. PriceSmart is committed to fostering a healthy environment for our employees, members, vendors, communities, and the world around us. The company's actions and practices aim to responsibly use natural resources and focus on environmental impact and social well-being. In FY 2021, the company formed PriceSmart's ESG department to develop, track, and measure the company's sustainability and social responsibility efforts. One of the principal objectives of our team is to find, prevent, and control environmental impacts generated by our operations, as well as to work to adapt and mitigate the impacts of climate change.
ESG continues to develop and evolve for everyone, and we are also growing and evolving with our efforts. We continue relentlessly to apply our values every day to improve the lives, the businesses, and the communities of our members. I wanna thank our over 10,000 employees, our executives, whether in San Diego, Miami, throughout all of our markets where we operate, for continuing to build on this momentum and showing us that we have more and more opportunities to do better and better and serve our members every day. Your commitment is really a source of great appreciation and admiration. Thank you again, team, and I'll hand it back to you, Michael.
Thank you, Sherry. Good morning or afternoon to everyone, and thanks for joining us today to talk about our record-setting second quarter. As Sherry mentioned, we are very excited to have crossed the $1 billion sales threshold for the first time this quarter, with total revenues and net merchandise sales coming in at $1.04 billion and $1.01 billion respectively, representing increases of 10.8% and 12.6% over the comparable prior year period, respectively. We ended this quarter with 49 warehouse clubs compared to 47 warehouse clubs at the end of the second quarter of fiscal 2021, and we are also very excited about reaching the milestone of 50 clubs when we open our second club in Jamaica next week.
Our comparable net merchandise sales growth for our fiscal second quarter was 10.3% for the 13 weeks ended February 27, 2022. Foreign currency fluctuations had a negative impact on net merchandise and comparable net merchandise sales growth of 3% and 2.7% or approximately $26.3 million and $24.2 million, respectively. By segment, in Central America, where we had 27 clubs at quarter end, net merchandise sales increased 13.6% with a 10.6% 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 1.8% and 1.9% during the quarter, respectively.
All of our markets in Central America had positive comparable net merchandise sales growth except for Guatemala, which had a small negative comp due to sales transfers from other clubs following the opening of our new Aranda club. In the Caribbean region, where we had 13 clubs at quarter end, total net merchandise sales increased 13% and comparable net merchandise sales increased 13.1%. All of our markets in the Caribbean had positive comparable net merchandise sales growth, with Trinidad showing a significant rebound this quarter with double-digit sales growth versus the comparable prior year period. Although most local COVID restrictions have been lifted and liquidity of the Trinidad dollar has improved thus far in fiscal 2022, we continue to manage to a target level of imports in Trinidad.
So far in fiscal 2022, these self-imposed import limitations have generally been in line with the needs of the market from a demand perspective. However, we continue to actively monitor market demand and our ability to source tradable currencies in Trinidad. In Colombia, where we had nine clubs open at quarter end, net merchandise sales increased 7.2% and comparable net merchandise sales increased 1.7%. Foreign currency fluctuations had a significant negative impact on merchandise and comparable net merchandise sales growth in Colombia of approximately 14% and 13.1% during the quarter, respectively. In terms of merchandise, we saw our foods category grow approximately 8% compared to the same quarter in the prior year. Our cleaning, beverages, and liquor departments led the way with 9%, 30%, and 14% growth, respectively.
Our fresh category grew 11% compared to the same quarter in the prior year, led by our poultry, meat, and seafood departments with 18%, 14%, and 14% growth, respectively. Our non-foods category grew 15% compared to the same quarter in the prior year as we made strategic investments in inventory in many of our non-food categories to respond to rising demand and longer supply chain transit times, especially for merchandise coming from Asia. Hardlines grew 7%, with hardware and garden and patio categories coming in very strong with 25% and 29% growth, respectively. Our softline category had exceptional results, growing approximately 33% with sales of casual apparel up 36% and basic apparel up 49% versus the same quarter last year.
Finally, our other business category rebounded with 16% growth primarily from our food service and bakery departments, buoyed by increased in-club traffic. Turning to margins. Total gross margins on net merchandise sales were 15.6% for the quarter versus 16% for the same period last year. This decrease for the quarter was primarily due to a reduction in the premium we applied to our sales prices to offset our COVID related operating costs and higher markdowns versus the prior year period. Total revenue margins decreased 80 basis points to 17% of total revenues when compared to the same period prior year. In addition to the 40 basis point decline in gross margins, we had 40 basis points of lower revenue margins due to the sale of Aeropost during the first quarter.
SG&A expenses decreased during the quarter by 60 basis points as a percentage of total revenue, primarily due to a lower operating expenses after the sale of Aeropost. Therefore, the decrease in margins as a result of the Aeropost disposal was offset by the decrease in expenses, yielding an essentially neutral impact on operating income when comparing to the same quarter of the prior year. Operating income for the quarter increased 7.4% from the same period last year to $48.3 million. Other expense of $0.8 million was primarily driven by a $1.8 million dollar foreign currency loss, which mostly consisted of costs to convert Trinidad dollars into other tradable currencies.
Our effective tax rate for the second quarter of fiscal 2022 came in lower than last year at 31% versus 33.9% a year ago, with our year-to-date rate coming in at 32.6%. This decrease in the quarter was primarily related to comparably favorable changes in uncertain tax positions, partially offset by comparably unfavorable changes in valuation allowances on our foreign tax credits. On a go-forward basis, we continue to estimate an annualized effective tax rate of 33%-34%. Net income for the second quarter of fiscal year 2022 was a record $31.5 million, or $1.03 per diluted share, compared to $28.2 million or $0.92 per diluted share in the comparable prior year period. Moving on to the balance sheet.
We ended the quarter with cash equivalents and restricted cash totaling $194.9 million. From a cash flow perspective, for the six months ended February 28, 2022, we had a $37.6 million dollar change from cash provided by to cash used in operating activities compared to the prior year, which was primarily a result of non-working capital changes in the balance sheet of $29.7 million. These changes were primarily due to prepaid expenses and income taxes, which increased due to higher sales during the period, and VAT paid increased due to our higher inventory position.
Another contributor to the change in cash flows from operations was our inventory position, which increased to $470.3 million as of February 28, 2022, versus $389.7 million as of February 28, 2021. This increase reflects our efforts to bring our inventory levels in line with our sales trends and the addition of three new clubs this year, including our Portmore, Jamaica club, which will open next week. Additionally, we have made investments in inventory to maintain adequate in-stock levels on items that either have been or we expect may be impacted by increased container transit times, especially for merchandise coming from Asia and commodity and electronic parts shortages. Our increased inventory investment is also a reflection of cost increase throughout the supply chain.
Net cash used in investing activities decreased by $51.7 million for the six months ended February 28, 2022 compared to the prior year, primarily due to the decrease in balances of certificates of deposit compared to the same period a year ago, due to significant improvement or a decrease in our balance of Trinidad dollars on hand versus the prior year. With respect to Trinidad, our balance of Trinidad dollar-denominated cash equivalents and short- and long-term investments measured in U.S. dollars improved this year, decreasing $17.4 million from our fiscal 2021 ending balance to approximately $35.5 million. As mentioned during our last conference call, as part of our continued efforts to convert Trinidad dollars to U.S. dollars, in December, we executed a loan whereby we received $25 million.
The associated principal and interest on this loan will be repaid in Trinidad dollars, converted at rates in effect upon the initial disbursements of this loan 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. The $78.7 million change from cash used in to cash provided by financing activities for the six months ended February 28, 2022 is primarily the result of obtaining the additional Trinidad-related financing in the current year, along with lower net repayments of short-term debt compared to the same six-month period a year ago when we were repaying short-term facilities accessed at the early stages of the COVID-19 pandemic.
In closing, we are very pleased with the record results achieved during the second quarter of fiscal 2022, and I want to extend my thanks and appreciation to the PriceSmart team for their hard work and dedication that made these results possible. We believe our value proposition and how we conduct our business resonates with our members and within our communities. The fundamentals of the business remain very strong and we believe our growth plans position us well for the future success. I will now turn the call over to the operator to take your questions. Operator, you may now start taking our callers' questions.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Jon Braatz with Kansas City Capital. Please go ahead.
Good morning, Sherry, Mike.
Good morning. How are you, Jon?
Very good. I wanna touch base on the gross margins, 40 basis point reduction and, you know, sort of COVID related costs, cost per impact. I'm curious, are we going to see that continue, sort of that 40 basis point reduction going forward, or have you recovered those costs, so to speak?
Hi, Jon Braatz. Good morning. As far as just backing up the total revenue margins, as I mentioned, the 40 basis points decrease there, Aeropost would basically offset that cost. Your particular question was on gross margin, and we highlighted a couple things there, which was the COVID related premium that we're charging.
Mm-hmm.
That was offset by cost, right? That's essentially should be basically neutral at the operating income level. But yes, as hopefully our COVID costs continue to wind down, we would expect to wind down that further.
Okay.
Just as a reminder, I mean, we do have also the FX premium that is being incurred in Trinidad for imported merchandise there.
Yep.
Year on year that's not a factor at this point, but, you know, if things continue to improve at some point, that may come back down further-
Yep.
-as the normal part of our cost plus-
Right.
-operations, but we need to do it for now to cover. You know, the other thing was just the flow of freight and some markdowns that we had during Q2, and it's not necessarily atypical to see some markdowns in the Q2 period as we work through our holiday merchandise. Yeah, we still, as you've seen, we still have a good set of merchandise which we're, you know, working through the holiday, the Semana Santa, the Easter holiday season now. We're still working through some of that, and then, you know, certainly expect to be back on track. At this point, we're estimating to definitely be back on track by Q4.
Yeah. Mike, when do you-
Jon.
Yeah.
You know, it's important also to remember the context of our business model.
Yep.
As we make the effort to drive volume and get better pricing, that gives us the opportunity to compress margins.
Mm-hmm.
We, you know, we focus on margin dollars as opposed to necessarily margin percentage. The flip side to that is as we get more involved in sourcing and developing our own products because we think we can achieve something better than what is already out there or that we're already doing, sometimes that requires an investment on our part that justifies a different margin structure.
You'll see that as our business becomes more dimensions to our business and going deeper in trying to develop quality and good pricing in the most efficient way, there will be occasions when certain areas will have higher margin structure because we're directly getting involved in going higher into the supply chain and making investments to handle more of the production and the development of the product. Sometimes you're gonna see that it's going to be compressed because we are gaining volume.
As we gain volume, which is the name of the game for us, we are generating more margin dollars, which allows us to then provide better value because we can buy better value for the members, which then in turn feeds the success of the business by making the membership more valuable. I just wanna elaborate on that point because unlike some other retailers, it's if you just look at the margin from quarter to quarter and you're not looking deeper or understanding that there are different dynamics in the way we're developing and providing products to the members today that we didn't do years ago, I don't know that looking at just the margin percentage like that is going to be as informative. I just wanted to give you that color.
Sure. Okay, thanks. One other question. Michael, what or Sherry, when do you think maybe that pricing premium in Trinidad may begin to fade? What's gonna take? What is it gonna take to see prices come down a little bit and selling prices come down a little bit in Trinidad?
Yeah. Yeah, Jon, I mean, you know, we talk about this other quarter every quarter. We're obviously monitoring it very very closely internally. Certainly as I've mentioned before, it's not something, you know, we would hope to keep for the long term.
Yeah.
There's a lot of uncertainty out there right now, and you know, we've made significant progress from our peak of over TTD 100 million on hand to TTD 35 million. Even you know, our imports are relatively balanced right now with the availability of dollars. We're also making profits in local currency, so which is a good thing, right?
Mm-hmm.
We have to, you know, balance just the uncertainty in the market and work through our dollars on hand. You know, it's obviously something we're monitoring. We are still, you know, incurring costs also to convert.
Mm-hmm.
You know, there may be some form of that, you know, for a long time. Whether it's at the same levels or not, we'll have to see.
Yeah. Okay.
Well.
Yeah.
Okay. We will be reducing that at the first opportunity that we feel we can responsibly do so.
Sure.
Again. Both to keep the prices down.
Okay. Sherry, I may have misunderstood you. I think initially you talked a little bit about March sales, and I think you said total sales were up 9.9% and comps were up 9.8%. Was that right?
Let me see here. I wanna make sure I'm giving you the exact, right.
Yeah, that's right.
Yeah.
Okay.
That's right. The total sales $338.1 was an increase of 9.9%, and then the four-week period ending comp net merchandise sales was 9.8%.
I know there's a lot that goes into this calculation, but you know you have three stores that are not in the comps right now. I know there's some-
A little more.
Yeah. Look, why weren't sales up more than the comps?
Well, there's multiple reasons. First of all, we've got several new clubs that we're still dealing with the transfer of sales. We also have, you know, newer clubs that just are not at the level that we could say is normalized. Michael, do you have anything more to add to that?
Yeah, I just you know, there's I think four days this year.
Yeah
This month that we're off there. As far as Sunday to Sunday, you've also got the Semana Santa timing, which always makes March and April-
Oh.
On an individual month basis, hard to compare. We usually look at March and April combined. We went ahead and put that out there 'cause that was what we had as of today.
Okay. All right, thanks.
Good point.
Our next question will come from Rodrigo Echagaray with Scotiabank. Please go ahead.
Thank you. Good morning, everyone, and congrats on the results. I wanna start with the e-commerce or online sales. You know, the fact that, you know, 15% or 14% of total members are, you know, it's a small percentage in terms of the full potential, which is obviously great, and also that carries a higher ticket, if I understood correctly. I guess the first question is, how does the basket, the average basket in terms of type of products differs from the basket at the club? And the follow-up on that would be, you know, what kind of opportunity do you see beyond growing the number of online users that are existing shoppers at the store in terms of the SKUs or even higher ticket items?
That would be my first questions.
Well, in terms of the baskets, especially early on in this process, we were a bit surprised to see that there was more in terms of typical grocery items than we would have expected for online. That has been shifting, and this is an area that we're studying right now because we still have a ways to go on our e-com in terms of both the online platform and in terms of the merchandising. That's our a very high priority for us right now to make sure that our online is offering the right items that would be most conducive for sales online.
We, a t this point, it's not far beyond being able to offer what we have in club, but the opportunity to have extended SKUs, the opportunity to have items that are online only. We are currently in the midst of working on that right now. I do think we have more potential. It varies. I mean, during Smart Week or during certain types of promotions, you'll see electronics go up substantially online. The tickets, you know, the baskets will have items that are being marketed aggressively because of Smart Week, and it's convenient for people to get it online and have it delivered. In terms of the concept of what more can we do online, what I'd like to say is we've got a foundation right now that is functioning well.
In terms of building out all the opportunities where there could be expansion of our online sales, we're still building.
Got it. I think you mentioned earlier, Sherry, that you were thinking that, and I think you've mentioned this in the past, but wanted to pick your brain on this a bit, that you see the online operations as perhaps a different way to tackle new markets, even if there are no stores currently there. Is this something that perhaps is more around, you know, adjacent geographies, you know, within Colombia? Or can you maybe touch on that a little bit more in depth?
There are opportunities with, you know, as our online presence grows and our members recognize that they can basically access merchandise via online in a very comfortable and reliable manner. With regard to existing markets, let's say, let's take your example in Colombia. We have members that have membership with us that are 2, 4, 6 hours away from the nearest club. Just imagine their membership is housed at the location where we have the brick-and-mortar. Just imagine the opportunity that exists and basically the data that we can track to see what concentration of memberships we have in what geographies or what areas of the market. If we were to have a physical club there, how successful do we think it would be? I mean, it gives us great insight.
Alternatively, if we were to be able to set it up so that there was a very cost-effective way for us to leverage and create memberships in those other markets where there's concentration, and have a greater presence just virtually or with a dark store initially. These are all the things that having the online capabilities, having the data, and having the brick-and-mortar work together that present themselves. Each situation is different. In some, we may look at it and conclude, nope, this is at a point where we should really, you know, just go straight to a brick-and-mortar.
In another, we may say, this is one where we're seeing substantial sales generated from a club that is several hours away and can be supported with delivery, with a streamlined system that we make very efficient, but may not yet be at a level where it warrants investing in a brick-and-mortar. Again, once there's more activity and the memberships grow and people see the value that we offer, that can help support the justification of even another brick-and-mortar.
Got it. In terms of the renewal rates, I mean, obviously record high. Can you highlight any specific market where the renewal rates are particularly strong?
I don't think we do that. Sorry, Rodrigo.
Okay.
I think.
No, no, that's fine.
Yeah.
No worries. No, I get it. Then lastly, you know, you earlier were going into more depth on the strategy of, you know, absolute dollars versus margin, which obviously it's a big difference versus other formats and retailers. In this quarter, I would say contrary to prior years where, you know, there was record sales but not necessarily record EPS. You know, this quarter, that flew nicely to the bottom line. I know this is a very broad question, but any thoughts on that?
Any thoughts on what?
Just the you know relative performance or the you know EPS is definitely this quarter. It seems to me that the operating leverage and the absolute dollar revenue amount did flow nicely this quarter. What do you see that going forward or you know any thoughts on the drivers behind that? I know there's no guidance, but any thoughts forward-looking would be appreciated.
Sure. Without giving guidance, I mean, you know, all the things that go into EPS. Starting with just what we talked about, this concept of lowering costs, lowering prices. I again, this is going right back to our roots, the six rights, lowering the prices as a result of being able to operate more efficiently as a result of all the work that's being put into becoming, if you will, more innovative in the way we do business, like getting our hands into developing our own products, doing more of those types of things. If the end result is we can make our prices more compelling without compromising the quality to the member, that should drive volume. If that drives volume, that should drive more expense savings for us, and it should result in greater margin dollars.
It's sort of a win-win-win, if you will. The other part is that if members are able to, you know, continue to see increasing benefits and not just benefits, so how PriceSmart does business, the way we take care of them during COVID, the way we are focusing on well-being, the ethics by which we operate, the increased services and convenience for their experience, whether it's in the club or it's online or through delivery, the more valuable that membership becomes. The more valuable the membership becomes, the more reliable the membership income. Then there's the, you know, the technical approach. You auto-renew. This is not something we had before. You auto-renew, someone commits to that, puts their credit card down right at the beginning.
There's no risk of losing, you know, having leakage between the time that they last were a member and they came back to shop and then renewed their membership. All of these things add up. It's not like there's one silver bullet. It ties right back to the theme of the three drivers of growth. If we keep doing what we're doing, our hope and expectation is the members are gonna win, the membership's gonna be incredibly valuable, we're gonna drive volume, and that's gonna drop to the bottom line. You know, whether it's in the form of membership income or in the form of margin dollars. On the other hand, you know that investments in technology also does have a financial impact on our EPS in a way that, h ang on. I'm sorry, there's something beeping in.
No worries.
In a way that capital investments in real estate do not. That's why I can't tell you how the EPS specifically would be impacted because there are a lot of variables there, and I'm sure Michael can give you a whole list of other things. Generally speaking, yes, the goal is to drive volume because of the compelling pricing, the savings, expense savings, a better value to the member and achieve it through margin dollars as well as the value of the membership, which would make it, again, like I've said before, you can't afford to not have the membership. That's our goal. We want to make as many people as possible feel that they cannot afford to not have our membership because there's too much value associated with it.
Got it. No, that's a great color. Thank you for all that.
My pleasure. Hope you're doing well.
This concludes our question and answer session. I would like to turn the conference back over to Sherry Bahrambeygui for any closing remarks.
I'd just like to thank all of our shareholders and the people who have interest in our stock that are taking the time to listen to our journey and all the exciting things that we're doing. Our team is really energized. We're excited about the future, and we especially believe that we've got an important role as a company and an employer and a provider of goods in today's world and the environment that we're in. Thank you for joining us, and we look forward to seeing you next quarter.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.