Good morning/afternoon everyone, and welcome to PriceSmart Incorporated Earnings Release Conference Call for the Third Quarter of Fiscal Year 2021, which ended on May 31, 2021. After remarks from our company's representatives, Sherry Bahrambeygui, Chief Executive Officer; and Michael McCleary, Chief Financial Officer, you will be given an opportunity to ask questions as time permits. As a reminder, this conference call is limited to one hour and is being recorded today, Friday, July 9, 2021. A digital replay will be available following the conclusion of today's call through July 16, 2021, by dialing 1 (877) 344-7529 for domestic callers or 1 (412) 317-0088 for international callers, and by entering replay access code of 10156316. 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 third quarter of fiscal year 2021. We will be discussing the information that we provided in our earnings press release in our 10-Q, which were both released yesterday afternoon, July 08, 2021. 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, will, may, should, estimate and similar expressions. All forward-looking statements are based on current expectations and assumptions as of today, July 9, 2021. 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 maybe 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. Thank you for joining us and for your interest in PriceSmart. We are pleased to report strong results for our third quarter of the fiscal year and we're seeing continued sales growth as we enter the final quarter of this fiscal year. For the quarter, net merchandise sales grew 11.6% and comparable net merchandise sales grew 8.8% compared to the same quarter last year. Our trailing 12-month membership renewal rate was 87.6% as compared to 82.5% for the same period ending May 31, 2020. And our total membership accounts have just about recovered to the level they were shortly before COVID. These third quarter results were achieved in part because of operational efficiencies, digital capabilities, expanding options for our supply chain, and most importantly our dedicated team that has become quite nimble at adjusting to rapidly changing dynamics brought on by the pandemic. Also contributing to the company's performance are the investments we've made in talent, technology, and analytics. Generally speaking, our access to timely and high-quality information is supporting better decision-making, greater efficiencies, and our understanding of members’ needs and preferences. We also feel that the actions we've been taking to protect our employees and members and their safety has further enhanced our members trust in us. We believe that our renewed focus on the fundamentals of our business, which I've discussed in prior calls has also contributed to positive results. For example, as compared to the pre-pandemic period in FY 2019, warehouse productivity has increased, and in inventory management we've reduced markdowns, salvage, throwaway, and demurrage. We've increased inventory turns by almost 20% for the nine months ending May 31, 2021, compared to the comparable period in 2019, and we've achieved lower out of stock. These key metrics have improved relative to…

Thank you, Sherry. Good morning or afternoon to everyone and thanks for joining us today. Total revenues in net merchandise sales for the quarter where $895.3 million and $857.5 million respectively, representing increases of 11.9% and 11.6% over the comparable prior year period, respectively. As a reminder, including the clubs we opened in Liberia, Costa Rica in June 2020 and Bogota, Colombia in December 2020, we ended this quarter with 47 warehouse clubs compared to 45 warehouse clubs at the beginning -- at the end of the third quarter of fiscal 2020. Our comparable net merchandise sales growth was 8.8% for the 13 weeks ended May 30, 2021. Foreign currency fluctuations had a negative impact on both merchandise and comparable net merchandise sales of approximately $12 million or 160 basis points and $12 million or 150 basis points respectively. By segment in Central America, where we had 26 clubs at quarter end net merchandise sales increased 17.7% with a 16% increase in comparable net merchandise sales. Nicaragua, Honduras, and El Salvador along with our second largest market Panama contributed approximately 1000 basis points of positive impact on the segment's comparable net merchandise sales. This increase was offset by an 80-basis point negative impact on the segment's comparable net merchandise sales from our largest market Costa Rica. During the quarter, Costa Rica experienced foreign currency exchange headwinds with the Costa Rica and Cologne devaluing versus the comparable prior periods. In the Caribbean region where we had 13 clubs at quarter end, total net merchandise sales declined 2.9% and comparable net merchandise sales declined 2.5%. The Dominican Republic continued its stellar sales performance during the COVID-19 pandemic with double-digit sales growth despite a significant foreign currency devaluation compared to the prior year period. However, this gain was more than offset by weakness…

Thank you. [Operator Instructions] Today's first question comes from Jon Braatz with Kansas City Capital.

Sherry, obviously the situation in Trinidad is very fluid, and I was wondering if there's been any change in Trinidad from the end of the quarter to where we are currently? Any difference, any change in that situation?

There has been a slight easing of the restrictions on the sale of goods in our clubs because the government released an amendment to their order that is now allowing us to include things like construction products and hardware and paper and school supplies and essential things for business to be able to continue functioning. We still have significant items that we're not allowed to sell at this point, but what we're seeing currently is the pace of the spread of the virus is reducing. And the government is looking for ways to start opening things up on a gradual and measured basis. So, we're hoping to see more flexibility pretty soon, but until we hear from them directly, we don't know. So it's -- we get very short notice, and we're at the ready when they tell us and there's something that is issued that says you can now sell this or that, and we make sure that we make the adjustments necessary to make them available for our members. Also, we are taking into consideration that in Trinidad, whenever you see these kinds of restrictions, there builds a pent-up demand. And so, we're focusing on that to make sure that even though we may not be able to sell certain key items at the moment, we want to be really prepared to provide those items at the most compelling value as soon as the opportunity is given to us. So, we're standing by and we're doing everything we can to recapture what we may have lost as a result of the restrictions.

Okay. To the extent that maybe things open up again, with oil prices up and Trinidad being a energy sensitive country, would you see maybe some improvement in the illiquidity situation, the conversion situation? Would you see that improving a little bit?

Well, generally speaking, whenever there's improvements to an economy, one would expect that that would lead to some improvement in terms of liquidity. But Michael, I think you might be able to provide a better answer to that.

Yes. We're seeing very positive signs in this calendar year, especially versus the end of the last calendar year. Historically, in Trinidad there has tended to be a fall-off in liquidity in the second half of the year. So, we don’t want to get ahead of ourselves, but as you saw during the quarter, we did reduce substantially our dollar balance partly because of the additional restrictions despite our intention to start shipping in more merchandise. So, we're keeping an eye on it. We're hopeful, I think certainly although a big part of the Trinidad economy is based on natural gas and others. Oil prices are certainly a bellwether, if you will, and I think that's a good sign, and we're hopeful that when things start to open up, the economy will improve and we can continue to improve our liquidity situation there and continue to ship in more merchandise.

Okay. Sherry, one last question. This year, you’ve spent heavily on technology on people and to improve that piece of your business. And certainly, I expect you to continue to invest in that area. But will the pace of spending ease a little bit -- could we possibly see some leveraging of those costs next year compared to this year or will the spending still be at a pretty significant pace?

Well, the approach we're taking to our spending is to make sure that we are investing appropriately to build the capacities we need. We've already seen the benefits, for example, certain technology tools that have been developed for us and how that has really protected us especially in this very volatile environment and has captured sales that we might have otherwise not been able to get, and although we're watching the spending with each of these tools come significant benefits for us to be able to drive sales. So we're going to look at it in a measured way, but we really feel that by making these appropriate investments, we're building the foundation for growth in the long-term and we don't want to be penny wise and pound foolish.

Ladies and gentlemen, this concludes our question-and-answer session. I'd like to turn the conference back over to the management team for any final remarks.

Well, I want to thank everybody, I hope people are safe and doing well and weathering our current environment wherever you are, and we really appreciate your interest and support of our business PriceSmart and look forward to talking to you next quarter.

Thank you. This concludes today's conference call. You may now disconnect your lines and have a wonderful day.