Core Insights - Savers Value Village (SVV) reported better-than-expected Q2 FY2025 results, with GAAP revenue of $417.2 million exceeding analyst forecasts by $8.9 million and non-GAAP EPS of $0.14 beating estimates by $0.02 [1][2] - The company raised its full-year guidance for sales, comparable store sales, adjusted net income, and adjusted EBITDA, indicating strong U.S. demand and ongoing store expansion [1][10] Financial Performance - GAAP revenue increased by 7.9% year-over-year, with U.S. net sales rising 10.5% to $228.8 million and comparable store sales growing 4.6% [2][5] - Canadian GAAP net sales grew 3.4% to $155.0 million, with comparable store sales recovering to a 2.6% increase [6] - Adjusted EBITDA fell 5.6% to $68.8 million, with the adjusted EBITDA margin declining from 18.9% to 16.5% [2][7] Business Model and Strategy - Savers Value Village operates thrift stores in the U.S., Canada, and Australia, sourcing inventory through charitable partnerships and donations [3] - The company focuses on increasing donations, investing in automated processing, expanding its store base, and enhancing its loyalty program [4] Store Expansion and Customer Engagement - The company opened four new stores, bringing the total to 354, and plans to open 25 stores in fiscal 2025, primarily in the U.S. [8] - Membership in the Super Savers Club® loyalty program reached nearly 6 million, with 72.4% of retail sales attributed to active members [8] Future Outlook - Full-year GAAP net sales are expected to be between $1.67 billion and $1.69 billion, with comparable store sales growth forecasted at 3.0% to 4.5% [10] - Management anticipates profit margins will remain under pressure in the near term but expects improvement as new stores mature [11]

Group 1 - Savers Value Village (SVV) reported revenue of $417.21 million for the quarter ended June 2025, a year-over-year increase of 7.9% [1] - The EPS for the same period was $0.14, unchanged from a year ago, with a surprise of +16.67% compared to the consensus estimate of $0.12 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $407.82 million by +2.3% [1] Group 2 - Comparable Store Sales Growth was 4.6%, significantly above the four-analyst average estimate of 2.3% [4] - U.S. Comparable Store Sales Growth was 6.2%, compared to the 3.8% average estimate based on three analysts [4] - Canada Comparable Store Sales Growth was 2.6%, exceeding the -0.2% average estimate based on three analysts [4] Group 3 - The number of stores in the United States was 171, slightly below the two-analyst average estimate of 176 [4] - The total number of stores was 354, compared to the 359 estimated by two analysts on average [4] - U.S. Retail revenue was $228.83 million, surpassing the $223.99 million average estimate based on two analysts, representing a +10.5% year-over-year change [4] Group 4 - Other revenue was reported at $33.42 million, close to the $33.54 million average estimate, reflecting a +12.3% year-over-year change [4] - Canada Retail revenue was $154.96 million, exceeding the $152.38 million estimate, with a +3.4% year-over-year change [4] Group 5 - Shares of Savers Value have returned -9.7% over the past month, while the Zacks S&P 500 composite increased by +2.7% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential outperformance against the broader market in the near term [3]

Group 1: Earnings Performance - Savers Value Village (SVV) reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, with a year-over-year comparison showing no change [1] - The earnings surprise for this quarter was +16.67%, and the company had a previous quarter surprise of +100% [1][2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times [2] Group 2: Revenue Performance - The company posted revenues of $417.21 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.30% and showing an increase from $386.66 million year-over-year [2] - Savers Value has topped consensus revenue estimates two times over the last four quarters [2] Group 3: Stock Performance and Outlook - Savers Value shares have declined approximately 4.2% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $0.15 on revenues of $420.24 million, and for the current fiscal year, it is $0.44 on revenues of $1.63 billion [7] Group 4: Industry Context - The Textile - Apparel industry, to which Savers Value belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, indicating potential challenges [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Savers Value's stock performance [5][6]

Financial Data and Key Metrics Changes - Total net sales increased by 7.9% to $417 million, with a constant currency increase of 8.5% and comparable store sales up by 4.6% [17] - Adjusted EBITDA for the quarter was $69 million, representing approximately 16.5% of sales [6][22] - GAAP net income for the quarter was $19 million, or $0.12 per diluted share, while adjusted net income was $23 million, or $0.14 per diluted share [21] Business Line Data and Key Metrics Changes - U.S. business sales grew by 10.5% to $229 million, with comparable store sales up by 6.2% driven by both transactions and average basket size [17][18] - Canadian business saw net sales increase by 3.4%, with comparable store sales up by 2.6%, reflecting improved selection and consumer response [18][19] Market Data and Key Metrics Changes - The U.S. market showed strong performance with a growing customer base that is younger and more affluent, contributing to increased spending [9][18] - In Canada, despite macroeconomic challenges, there was a sequential improvement in sales, indicating a positive consumer response to the company's value proposition [11][12] Company Strategy and Development Direction - The company plans to open 25 new stores in 2025, with new stores performing in line with expectations and contributing to long-term growth [6][13] - The focus remains on enhancing the customer experience through a compelling assortment and value, with a strong emphasis on data-driven decision-making [11][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth opportunities despite ongoing macroeconomic pressures, highlighting the importance of value in the current environment [10][16] - The company raised its revenue and earnings outlook for 2025 based on strong first-half results and continued momentum [7][25] Other Important Information - The company reported a strong balance sheet with $71 million in cash and cash equivalents and a net leverage ratio of 2.5 times at the end of the quarter [22] - The company repurchased approximately 2.7 million shares during the quarter, indicating confidence in its stock value [23] Q&A Session Summary Question: Can you elaborate on the cadence of the second quarter same store sales across the U.S. and Canada? - Management noted strong execution in the U.S. with increasing penetration in younger demographics, while Canada faced different challenges but showed improvement in selection and value [30][32] Question: What are the transitory headwinds to margin expected in the back half of the year? - Management indicated that increased selection in Canada and the conversion of Two Peaches stores are contributing to short-term margin pressures, but these are expected to normalize [50][56] Question: How do you see the pricing opportunity in the current market? - Management highlighted significant price gaps to discount retailers, providing an opportunity to gain market share while maintaining value [62][63] Question: Can you provide insights on labor costs and production efficiency? - Labor costs are expected to grow at a typical rate, while the company is focused on innovative approaches to improve production efficiency [78][80] Question: What is the outlook for real estate opportunities? - Management expressed optimism about the real estate pipeline, indicating high-quality deals and a favorable environment for expansion [72][76]

Part I [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Strong Q2 2025 results show net sales up 7.9% to $417.2 million, driven by 4.6% comparable store sales growth, leading to raised 2025 guidance Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Change vs Q2 2024 | | :--- | :--- | :--- | | **Net Sales** | $417.2 million | +7.9% | | **Constant-Currency Net Sales** | - | +8.5% | | **Comparable Store Sales** | +4.6% | - | | - U.S. | +6.2% | - | | - Canada | +2.6% | - | | **Net Income** | $18.9 million | - | | **Diluted EPS** | $0.12 | - | | **Adjusted Net Income** | $22.8 million | - | | **Adjusted Diluted EPS** | $0.14 | - | | **Adjusted EBITDA** | $68.8 million | - | - CEO Mark Walsh highlighted **strong U.S. comparable store sales** and **improving performance in Canada** as key drivers, leading the company to **raise its 2025 guidance**[4](index=4&type=chunk) - The company opened **4 new stores** during the second quarter, ending the period with a total of **354 stores**[5](index=5&type=chunk) [Corporate Actions](index=2&type=section&id=Corporate%20Actions) The company facilitated a secondary offering of 17.3 million shares and repurchased 2.3 million shares for $20.0 million - On May 16, 2025, certain stockholders sold **17.3 million shares** in a secondary offering. The company did not receive proceeds but incurred **$1.2 million** in associated costs[6](index=6&type=chunk) - As part of the offering, the company repurchased approximately **2.3 million shares** from the underwriters at a total cost of about **$20.0 million**, funded from cash on hand[7](index=7&type=chunk) - Under the separate **$50.0 million** share repurchase program from November 2023, the company repurchased **0.4 million shares** in Q2. As of quarter-end, **$2.8 million** remained available under this program[8](index=8&type=chunk) [Fiscal 2025 Outlook](index=2&type=section&id=Fiscal%202025%20Outlook) Reflecting strong momentum, the company raised its full-year fiscal 2025 guidance for net sales and comparable store sales growth Updated Fiscal 2025 Outlook | Metric | Current Outlook | Previous Outlook | | :--- | :--- | :--- | | **Net sales** | $1.67B to $1.69B | $1.61B to $1.65B | | **Comparable store sales growth** | 3.0% to 4.5% | 0.5% to 2.5% | | **Net income** | $47M to $58M | $36M to $52M | | **Net income per diluted share** | $0.29 to $0.36 | $0.21 to $0.31 | | **Adjusted net income** | $67M to $78M | $62M to $77M | | **Adjusted net income per diluted share** | $0.41 to $0.48 | $0.37 to $0.46 | | **Adjusted EBITDA** | $252M to $267M | $245M to $265M | | **New store openings** | 25 | 25 to 30 | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 net sales grew 7.9% to $417.2 million, with net income increasing to $18.9 million or $0.12 per diluted share Q2 Statement of Operations Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net sales** | $417,208 | $386,663 | | **Operating income** | $34,021 | $32,216 | | **Net income** | $18,917 | $9,712 | | **Diluted EPS** | $0.12 | $0.06 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached $1.94 billion, while cash decreased to $70.6 million due to share repurchases and debt payments Balance Sheet Highlights (in thousands) | Account | June 28, 2025 | Dec 28, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $70,550 | $149,967 | | **Total current assets** | $170,683 | $230,224 | | **Total assets** | $1,939,121 | $1,885,495 | | **Long-term debt, net** | $700,526 | $735,133 | | **Total liabilities** | $1,515,647 | $1,463,815 | | **Total stockholders' equity** | $423,474 | $421,680 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $54.9 million, while financing activities used $82.9 million, resulting in a $79.4 million net decrease in cash Cash Flow Summary - Twenty-Six Weeks Ended (in thousands) | Cash Flow Activity | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $54,865 | $54,566 | | **Net cash used in investing activities** | ($53,879) | ($28,004) | | **Net cash used in financing activities** | ($82,933) | ($43,536) | | **Net change in cash and cash equivalents** | ($79,417) | ($19,304) | [Segment Results](index=9&type=section&id=Segment%20Results) U.S. Retail net sales grew 10.5% to $228.8 million, while Canada Retail sales increased 3.4% to $155.0 million Q2 2025 Segment Results (in thousands) | Segment | Net Sales | % Change | Segment Profit | % Change | | :--- | :--- | :--- | :--- | :--- | | **U.S. Retail** | $228,833 | 10.5% | $48,513 | 0.9% | | **Canada Retail** | $154,956 | 3.4% | $39,475 | (10.4)% | | **Other** | $33,419 | 12.3% | $8,689 | 3.2% | [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) [Reconciliation of Net Income to Adjusted Net Income](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Q2 2025 GAAP net income of $18.9 million was adjusted to $22.8 million, with Adjusted Net Income per diluted share of $0.14 Q2 Reconciliation of Net Income to Adjusted Net Income (in thousands) | Description | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net income (GAAP)** | **$18,917** | **$9,712** | | IPO-related stock-based compensation | $8,870 | $19,732 | | Foreign currency exchange rate impacts | ($8,513) | $940 | | Other adjustments (net) | $3,480 | $1,499 | | **Adjusted net income (Non-GAAP)** | **$22,752** | **$26,701** | [Reconciliation of Net Income to Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Q2 2025 GAAP net income of $18.9 million was reconciled to an Adjusted EBITDA of $68.8 million, achieving a 16.5% margin Q2 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Description | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net income (GAAP)** | **$18,917** | **$9,712** | | Interest expense, net | $15,985 | $15,767 | | Income tax expense | $7,693 | $6,293 | | Depreciation and amortization | $20,904 | $17,380 | | Stock-based compensation expense | $12,429 | $21,650 | | Other adjustments (net) | ($8,199) | $1,194 | | **Adjusted EBITDA (Non-GAAP)** | **$68,786** | **$72,893** | [Reconciliation of GAAP Net Sales to Constant-Currency Net Sales](index=13&type=section&id=Reconciliation%20of%20GAAP%20Net%20Sales%20to%20Constant-Currency%20Net%20Sales) Q2 2025 reported net sales of $417.2 million, with constant-currency net sales of $419.5 million, reflecting 8.5% growth Q2 Net Sales Reconciliation to Constant Currency (in thousands) | Description | Net Sales (GAAP) | Impact of Foreign Currency | Constant Currency Net Sales | | :--- | :--- | :--- | :--- | | **Total net sales** | **$417,208** | **$2,268** | **$419,476** | [Supplemental Metrics](index=14&type=section&id=Supplemental%20Metrics) Q2 2025 total comparable store sales grew 4.6%, led by 6.2% growth in the U.S., and total store count increased to 354 Q2 Comparable Store Sales | Region | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | U.S. | 6.2% | 2.1% | | Canada | 2.6% | (3.1)% | | **Total** | **4.6%** | **(0.1)%** | Q2 Key Operating Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Number of Stores (Total)** | 354 | 337 | | **Pounds processed (lbs mm)** | 279 | 254 | | **Sales yield** | $1.46 | $1.46 |

Company Overview - Savers Value Village, Inc. (NYSE: SVV) has a market capitalization of $1.59 billion, indicating its relatively small size in the market [1]. Industry Insights - Crude Value Insights focuses on the oil and natural gas sector, emphasizing cash flow generation and identifying companies with value and growth prospects [1]. - Subscribers to Crude Value Insights benefit from a 50+ stock model account, detailed cash flow analyses of exploration and production (E&P) firms, and live discussions about the sector [2].

Group 1 - The article discusses Savers Value Village (NYSE: SVV) and previously assigned a hold rating due to the underperformance of the Canada segment, despite long-term growth potential being acknowledged [1] - The author emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies to enhance their investment process [1] - The purpose of writing on Seeking Alpha is to track investment ideas and connect with like-minded investors [1] Group 2 - There is no disclosure of any stock, option, or derivative positions in the companies mentioned, nor any plans to initiate such positions in the near future [2] - The article expresses personal opinions and is not compensated for the content, aside from Seeking Alpha [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [3]

Core Insights - Savers Value Village (SVV) reported revenue of $370.15 million for Q1 2025, a 4.5% year-over-year increase, with an EPS of $0.02 compared to $0.08 a year ago, indicating a significant EPS surprise of +100% [1][3] - The revenue exceeded the Zacks Consensus Estimate of $366.86 million by 0.90%, showcasing the company's ability to outperform market expectations [1] Financial Performance - Comparable Store Sales Growth was reported at 2.8%, significantly higher than the estimated 0.2% by analysts [4] - U.S. Comparable Store Sales Growth was 4.2%, surpassing the average estimate of 2.7% [4] - Canadian Comparable Store Sales Growth was 0.6%, compared to an estimated decline of -1.8% [4] - Total number of stores remained at 353, aligning with analyst estimates [4] Revenue Breakdown - U.S. Retail revenue reached $210.77 million, exceeding the average estimate of $207.06 million, reflecting a year-over-year increase of 9.4% [4] - Other revenue segments reported $30.75 million, surpassing the estimate of $29.39 million with an 11.9% year-over-year increase [4] - Canadian Retail revenue was $128.64 million, slightly below the average estimate of $129.60 million, marking a year-over-year decline of 4.1% [4] Stock Performance - Savers Value shares have returned +29.1% over the past month, contrasting with the Zacks S&P 500 composite's -0.7% change, indicating strong market performance [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

分组1 - Savers Value Village (SVV) reported quarterly earnings of $0.02 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, but down from $0.08 per share a year ago, representing an earnings surprise of 100% [1] - The company posted revenues of $370.15 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.90% and up from $354.17 million year-over-year [2] - Over the last four quarters, Savers Value has surpassed consensus EPS estimates just once and topped consensus revenue estimates only once [2] 分组2 - The stock has underperformed the market, losing about 6.4% since the beginning of the year compared to the S&P 500's decline of 5.3% [3] - The current consensus EPS estimate for the coming quarter is $0.12 on revenues of $405.25 million, and for the current fiscal year, it is $0.41 on revenues of $1.62 billion [7] - The Zacks Industry Rank for Textile - Apparel is currently in the bottom 37% of over 250 Zacks industries, indicating potential challenges for stocks in this sector [8]

Financial Data and Key Metrics Changes - Total net sales increased by 4.5% to $370 million, with a constant currency increase of 7.1% and comparable store sales up by 2.8% [15][16] - Adjusted EBITDA for the quarter was approximately $43 million, representing an adjusted EBITDA margin of 11.6% [19][20] - GAAP net loss for the quarter was $4.7 million, or $0.03 per diluted share, which included a $2.7 million pretax loss on debt extinguishment [18][19] Business Line Data and Key Metrics Changes - U.S. net sales increased by 9.4% to $211 million, with comparable store sales rising by 4.2% driven by growth in both transactions and average basket size [16][20] - Canadian net sales declined by 4.1% due to a weaker Canadian dollar, but on a constant currency basis, they increased by 2.2% to $137 million, with comparable store sales up by 0.6% [16][20] Market Data and Key Metrics Changes - The U.S. business showed nearly double-digit sales growth, while Canada reported positive comparable sales for the first time since Q4 2023 [6][15] - The company opened two new stores in the quarter and is on track to meet its target of 25 to 30 new store openings for the year [11][25] Company Strategy and Development Direction - The company is focusing on expanding its U.S. operations, with a significant emphasis on new store openings to capture market opportunities [8][11] - The strategy includes leveraging centralized processing centers to enhance operational efficiency and support new store growth [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic pressures, particularly in Canada, while maintaining a focus on execution and innovation [11][14] - The outlook for 2025 includes net sales projections of $1.61 billion to $1.65 billion, with comparable store sales growth of 0.5% to 2.5% [25][26] Other Important Information - The company redeemed $44.5 million of its senior secured notes during the quarter, reducing its net leverage ratio to 2.4 times [21][20] - The company has approximately $6.3 million remaining on its share repurchase authorization [21] Q&A Session Summary Question: Can you unpack the U.S. strength and provide more granularity on traffic versus basket? - Management noted strong performance in both transactions and average basket size, with no degradation in trends into Q2 [34][35] Question: How do you see Canada unfolding from here? - Management indicated that while there are challenges, they are encouraged by sequential improvements and strong donation flows [32][33] Question: Will Savers use the opportunity to raise prices selectively? - Management stated that they are not exposed to tariff pressures and see potential for market share gains if price gaps widen [46] Question: What is the outlook for on-site donations and how are you managing supply? - Management reported robust growth in on-site donations and emphasized the importance of a positive donation experience [49][50] Question: How are new stores performing and what is the long-term EBITDA margin potential? - New stores are performing as expected, and management believes high teens EBITDA margins are achievable in the long term despite near-term pressures [80][82]