Pricesmart (PSMT) risk factors, FY2025 10-K

Other

1. 01Our financial performance is dependent on international operations, which exposes us to various risks56% rewritten
2. 02Negative economic conditions created or exacerbated by inflation and higher interest rates could adversely impact our business in various respects
3. 03We are vulnerable to changes in political and economic conditions, including the effects of tariffs and/or international trade wars and disruptions to remittancesNew
4. 04Our profitability is vulnerable to cost increases
5. 05We face significant competition
6. 06Our sales could be adversely affected if one or more major international online retailers were to enter our markets or if other competitors were to offer a superior online experience47% rewritten
7. 07We are exposed to significant weather events and other natural disaster risks that might not be adequately compensated by insurance, and we are susceptible to the long-term impacts of climate change25% rewritten
8. 08We face difficulties in the shipment of, and risks inherent in the importation of, merchandise to our warehouse clubs38% rewritten
9. 09Any significant interruption in the operations of our distribution centers or supply chain network could disrupt our ability to provide adequate supplies of merchandise to our warehouse clubsNew
10. 10We are subject to payment-related risks, including risks to the security of payment card information
11. 11We face the possibility of operational interruptions related to union work stoppages
12. 12Any failure by us to manage our widely dispersed operations could adversely affect our business31% rewritten
13. 13We depend on maintaining and expanding our membership base, and any harm to our relationship with our Members could have a material adverse effect on our business, net sales and results of operations
14. 14We might not identify in a timely manner or effectively respond to changes in consumer preferences for merchandise, which could adversely affect our relationship with Members, demand for our products and market share
15. 15Future sales growth depends, in part, on our ability to successfully open new warehouse clubs in our existing and new markets33% rewritten
16. 16Failure to grow our e-commerce business through the integration of physical and digital retail channels and the investments we are making to develop a robust e-commerce platform could materially adversely affect our market position, net sales and/or financial performance
17. 17We are subject to risks associated with our dependence on third-party suppliers and service providers, and we have no assurances of continued supply, pricing or access to new merchandise
18. 18Our failure to maintain our brand and reputation could adversely affect our results of operations
19. 19We face the risk of exposure to product liability claims, a product recall and adverse publicity
20. 20We rely extensively on computer systems to process transactions, summarize results and manage our business. Failure to adequately maintain our systems, or disruptions to them, could harm our business and adversely affect our results of operations72% rewritten
21. 21Any failure by us to maintain the security of the information we hold relating to our Company, Members, employees, and vendors, could damage our reputation with them, disrupt our operations, cause us to incur substantial additional costs, expose us to litigation, and materially affect our operating resultsNew
22. 22Our use of artificial intelligence in our business or more rapid adoption of artificial intelligence by our competitors could result in harm to our brand and adversely affect our results of operations
23. 23Any failure by us to protect our trademarks, trade secrets and other intellectual property, or our actual or alleged infringement of other companies’ intellectual property, could harm our business
24. 24Business acquisitions or divestitures and new business initiatives could adversely impact the Company’s performance
25. 25Failure to attract and retain qualified employees could materially adversely affect our financial performance50% rewritten

Legal and Compliance Risks

1. 26We face compliance risks related to our international operations
2. 27We could be subject to additional tax liabilities or subject to reserves on the recoverability of tax receivables
3. 28A few of our stockholders own approximately 14.8% of our voting stock as of August 31, 2025, which may make it difficult to complete some corporate transactions without their support and may impede a change in control22% rewritten

Financial and Accounting Risks

1. 29We are subject to volatility in foreign currency exchange rates and limits on our ability to convert foreign currencies into U.S. dollars44% rewritten
2. 30Changes in accounting standards and assumptions, projections, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations