Thanks to PriceSmart's (NASDAQ:PSMT) practice of issuing monthly sales results, investors already had a good idea about what to expect from its fiscal first-quarter earnings report. The international warehouse club retailer is enjoying steady, but meager, sales growth thanks to the combination of a rising store base and slightly higher spending at existing locations.

PriceSmart added context around that big-picture trend with its second-quarter announcement this week while showing encouraging progress toward faster earnings gains.

Let's dive right in.

A customer shops a warehouse retailing aisle.

Image source: Getty Images.

The operating update

Sales at existing locations rose 1%, as expected. That's far from the 5% gains that its U.S.-based model, Costco, is enjoying today. Yet PriceSmart's focus on Caribbean and Central American markets ties it to generally weaker economies and provides for a far smaller base of affluent consumers to target. The good news is that the chain's performance marks an acceleration from the prior year, which saw comps fall by about 1 %.

Drilling down a bit, the consumer staples business' growth performance was mixed across regions, with sales rising in both the Central American and Caribbean regions but falling in Colombia. Management said the decline in that country, which represents about 13% of overall sales, was tied to currency exchange shifts.

Total revenue growth landed at 4% in the first quarter, thanks to the fact that 45 warehouses were in operation this year compared to 41 a year earlier. PriceSmart added two new stores in Panama and one each in the Dominican Republic and Guatemala.

Profitability improved, with gross profit margin expanding to 14.9% of sales compared to 14.2% a year earlier. This win contributed to a 25% increase in operating income.

Membership income growth, the bedrock of the warehouse retailing business, was strong. PriceSmart gained 47,000 paying subscribers, which translated into a 3% increase for the membership base. Those added shoppers contributed to membership fee growth in each of its markets, led by a 10% spike in the Caribbean region. Overall, subscriber income rose by $1 million, or 8%, to $14 million .

Looking ahead

PriceSmart plans to open one additional warehouse this fiscal year, in Costa Rica. It is projecting three additional openings in fiscal 2021, too –- one in Jamaica and two in Colombia. Management has warned that this stepped-up pace of new store openings might pressure comparable-store sales growth over the short term, since most of these launches are occurring in established markets and will necessarily pull some sales away from more mature stores.

Still, the expansion should support both higher sales and an expanding membership base over the long term. Meanwhile, there's plenty of data in PriceSmart's recent operating trends suggesting stable, or potentially accelerating, growth ahead.

Sales are rising across its categories, profitability is improving, and the chain's renewal rate, a critical industry metric, has risen to 86% over the past year compared to 85% in the year-ago period. Success in boosting that renewal rate doesn't always show up immediately in operating results, but it tends to push sales and profits higher over time.

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