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 growth of 2.8% [14][15] - Adjusted EBITDA for the quarter was approximately $43 million, representing an adjusted EBITDA margin of 11.6% [6][18] - 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 [17] Business Line Data and Key Metrics Changes - U.S. net sales increased by 9.4% to $211 million, with comparable store sales up by 4.2%, driven by growth in both transactions and average basket size [15][16] - 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% [15][16] 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 [5][14] - The company noted stable macroeconomic conditions in both the U.S. and Canada during the first quarter, despite ongoing consumer confidence volatility [9][10] Company Strategy and Development Direction - The company plans to open 25 to 30 new stores in 2025, with a focus on U.S. expansion [10][25] - The company is leveraging centralized processing centers to support new store growth and improve operational efficiency [11][12] - The management emphasized a conservative approach to planning comparable store sales growth, particularly in Canada, while remaining optimistic about U.S. performance [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term growth prospects, citing strong execution and a compelling value proposition [13][22] - The company is monitoring consumer sentiment and potential impacts from tariffs, but remains focused on operational control and innovation [9][10][24] - The outlook for 2025 includes net sales of $1.61 billion to $1.65 billion and adjusted EBITDA of $245 million to $265 million [25] Other Important Information - The company redeemed $44.5 million of senior secured notes during the quarter, resulting in a net leverage ratio of 2.4 times [21] - The company repurchased approximately 1.4 million shares at a weighted average price of $8.43 per share, with $6.3 million remaining on the share repurchase authorization [21] Q&A Session Summary Question: Insights on U.S. Strength and Customer Trends - Management noted strong performance in the U.S. with growth in both transactions and average basket size, and emphasized the importance of their loyalty program [29][34] Question: Future Outlook for Canada - Management expressed cautious optimism about Canada, highlighting strong donation flows and stable economic indicators, but refrained from declaring victory [31][33] Question: Continuous Improvement Processes - Management discussed the implementation of automated book processing and various tactical improvements to enhance store operations [37][40] Question: Pricing Strategy in a Competitive Environment - Management indicated that widening price gaps could present opportunities for market share gains, but they are not planning to raise prices immediately [44][46] Question: Impact of Macroeconomic Conditions on Donations - Management reported robust growth in on-site donations and low turnover rates, indicating no current issues with labor availability [49][52] Question: New Store Performance and Long-term EBITDA Margins - Management confirmed that new stores are performing as expected and reiterated that high teens EBITDA margins remain achievable in the long term [78][81] Question: Real Estate Opportunities and Two Peaches Integration - Management is actively prospecting for new store locations and reported positive integration progress with the Two Peaches acquisition [86][92]

Sales Performance - Total net sales increased by 4.5% to $370.1 million, with constant-currency net sales rising by 7.1% and comparable store sales up by 2.8%[7] - In the U.S., net sales grew by 9.4% and comparable store sales increased by 4.2%, while in Canada, net sales decreased by 4.1% due to foreign currency impacts, but constant-currency net sales rose by 2.2%[7] - U.S. Retail segment sales increased by 9.4% to $210,765 thousand, while Canada Retail segment sales decreased by 4.1% to $128,635 thousand[34] - Comparable store sales in the U.S. increased by 4.2%, while Canada saw a slight increase of 0.6% for the same period[51] - For the thirteen weeks ended March 29, 2025, total net sales reached $370.145 million, reflecting a 7.1% increase over the prior year[49] Financial Performance - Adjusted net income was $3.6 million, or $0.02 per diluted share, while the net loss was $4.7 million, or $0.03 per diluted share[7] - Operating income decreased to $10,403 thousand, down 36.5% from $16,267 thousand year-over-year[24] - The net loss for the period was $4,723 thousand, compared to a net loss of $467 thousand in the prior year, reflecting a significant increase in losses[24] - Adjusted net income for the period was $3,615 thousand, compared to $15,679 thousand in the same period last year[36] - Basic net loss per share was $(0.03), compared to $(0.00) in the prior year[31] Future Outlook - The company plans to open 25 to 30 new stores in fiscal 2025, with projected net sales between $1.61 billion and $1.65 billion[8] - Fiscal 2025 net income is expected to be between $36 million and $52 million, or $0.21 to $0.31 per diluted share[8] - Adjusted net income for fiscal 2025 is projected to be between $62 million and $77 million, or $0.37 to $0.46 per diluted share[8] - Adjusted EBITDA for fiscal 2025 is expected to be between $245 million and $265 million, with net income margin at approximately 1.3%[44] Capital and Assets - Total current assets decreased to $164,325 thousand from $230,224 thousand at the end of the previous quarter[27] - Cash and cash equivalents at the end of the period were $73,019 thousand, down from $149,967 thousand at the beginning of the period[29] - Total liabilities decreased slightly to $1,445,375 thousand from $1,463,815 thousand[27] - Capital expenditures for fiscal 2025 are estimated to be between $125 million and $150 million[8] Membership and Donations - The total active members in the U.S. and Canadian loyalty programs increased by high-single digits to nearly 6.0 million[7] - The company processed 262 million pounds, with on-site donations and GreenDrop accounting for 74.0% of total pounds processed[51] - The sales yield per pound processed was $1.38, slightly down from $1.41 in the previous year[51] Currency Impact - Adjusted EBITDA was $42.8 million, with an Adjusted EBITDA margin of 11.6%, negatively impacted by $1.5 million due to foreign currency exchange rates[7] - The impact of foreign currency on net sales was $9.147 million, indicating a positive adjustment in constant currency net sales[49] - Adjusted EBITDA margin for the thirteen weeks ended March 29, 2025, was 11.6%, down from 16.0% in the previous year[42]

Core Insights - Investors are optimistic about the impact of new U.S. tariffs on secondhand goods sellers, with shares of ThredUp and Savers Value Village rising by 31% and 22% respectively since the announcement, while the S&P retail select index has declined by 7% [1] Group 1: Market Dynamics - Secondhand sellers are expected to attract bargain-hunting consumers and those looking to sell items for extra cash, as their merchandise is immune from tariffs, allowing them to potentially raise prices in response to increased costs of new imported goods [2] - The secondhand sector typically performs well during economic downturns and has gained popularity among younger consumers [2] Group 2: Company Performance and Expectations - ThredUp projected revenue between $67.5 million and $69.5 million for Q1 and between $270 million and $280 million for the year prior to the tariff announcement [3] - ThredUp's CEO noted that the uncertain consumer environment and tariffs could make secondhand options more attractive [4] - In contrast, Savers Value Village expressed caution regarding the tariff impact, with its CEO stating that the tariff issue complicates the outlook [4][5] Group 3: Consumer Behavior Trends - A report indicated that millennials are increasingly turning to secondhand shopping, with 52% of those who purchased secondhand items in the past year reporting an increase in their resale shopping activities [5]

Company Overview - Savers Value Village (SVV) shares increased by 8% to $7.68 in the last trading session, with a higher-than-average trading volume [1] - The stock has shown a modest gain of 0.1% over the past four weeks [1] Business Performance - SVV's growth in the U.S. business is driven by increased transactions, larger average basket sizes, and new store openings [2] - The company's competitive pricing and value offerings have positively impacted consumer sentiment [2] - There has been a sequential improvement in the Canadian business, contributing to increased investor confidence [2] Earnings Expectations - SVV is expected to report quarterly earnings of $0.01 per share, reflecting a year-over-year decline of 87.5% [3] - Revenue is projected to be $365.68 million, which is a 3.3% increase from the same quarter last year [3] - The consensus EPS estimate for the quarter has been revised 4.2% higher in the last 30 days, indicating a positive trend in earnings estimate revisions [4] Industry Context - Savers Value operates within the Zacks Textile - Apparel industry, where Gildan Activewear (GIL) has seen a 4.8% decline in its stock price, closing at $39.78 [4] - Gildan's consensus EPS estimate remains unchanged at $0.57, representing a 3.4% decrease from the previous year [5]

I wrote about Savers Value Village (NYSE: SVV ) previously with a hold rating as I was worried about the near-term growth and margin outlook. Although SVV US business continues to perform well, Canada remains a significant drag, andI am an individual investor that is now fully focus on managing my own capital that I have saved up over the years. My investing background spreads across a wide spectrum as I believe there are merits to each approach, for instance: Fundamental investing [Bottoms-up etc.], Techni ...

Financial Position and Debt - As of December 28, 2024, the company had $123.8 million available to borrow under the Revolving Credit Facility, with no advances made[230]. - A 100 basis point increase in interest rates would result in a $3.2 million change in annual interest expense on the company's variable rate indebtedness[229]. - The company does not anticipate paying any cash dividends for the foreseeable future due to limitations imposed by its indebtedness[236]. - The company is exposed to interest rate risk due to reliance on variable rate borrowings, which could impact net income and cash flows[229]. Shareholder Influence and Governance - The Ares Funds owned 84.6% of the company's common stock as of December 28, 2024, allowing them significant influence over corporate governance[243]. - The company is classified as a "Controlled Company" under NYSE rules, allowing it to opt out of certain corporate governance requirements[246]. - The Ares Funds control a majority of the voting power, which may limit stockholder protections compared to companies fully compliant with NYSE governance standards[247]. - Provisions in the company's certificate of incorporation and bylaws may delay or prevent changes in control, potentially affecting stock price and investor interest[248]. - The company has opted out of Section 203 of the Delaware General Corporation Law, which generally restricts business combinations with interested stockholders owning 15% or more of voting stock[250]. - The exclusive-forum provisions in the certificate of incorporation may limit stockholders' ability to bring claims in preferred judicial forums, potentially discouraging lawsuits[252]. - The company’s certificate of incorporation allows Ares Funds and affiliates to engage in similar business activities without liability for breaching fiduciary duties[256]. Business Risks and Challenges - The company faces risks related to attracting and retaining customers, particularly in the context of growing acceptance of secondhand items[18]. - The company has no operations in the growing online retail marketplace, which poses a risk to its business model[18]. - The company may face challenges in opening new profitable stores or entering new markets in a timely manner[18]. - The company is subject to various risks including geopolitical instability and regulatory changes that could adversely affect its operations[18]. - The company relies heavily on key executive officers and employees, and their loss could adversely affect business operations[258]. Regulatory and Compliance Issues - Compliance with public company regulations may strain resources and divert management's attention, impacting overall business performance[261]. - Changing laws and regulations regarding corporate governance may increase compliance costs and create uncertainty for the company[263]. - Disclosure requirements as a public company may expose the company to increased litigation risks, affecting financial condition and operational focus[265].

Savers Value Village, Inc. (NYSE:SVV) Q4 2024 Earnings Conference Call February 20, 2025 4:30 PM ET Company Participants Mark Walsh - Chief Executive Officer Michael Maher - Chief Financial Officer Jubran Tanious - President & Chief Operating Officer Conference Call Participants Matthew Boss - JPMorgan Mark Altschwager - Baird Brooke Roach - Goldman Sachs Bob Drbul - Guggenheim Michael Lasser - UBS Carlos Gallagher - Jefferies Anthony Chukumba - Loop Capital Markets Operator Good afternoon, and welcome to S ...

Core Insights - Savers Value Village (SVV) reported revenue of $401.99 million for the quarter ended December 2024, reflecting a 5% increase year-over-year, while EPS decreased to $0.10 from $0.15 in the previous year [1] - The reported revenue was in line with the Zacks Consensus Estimate of $402 million, indicating no surprise, but the EPS fell short of the consensus estimate of $0.12, resulting in a -16.67% EPS surprise [1] Financial Performance Metrics - Comparable Store Sales Growth for the total was 1.6%, matching the average estimate from three analysts [4] - Comparable Store Sales Growth in the United States was 4.7%, aligning with the three-analyst average estimate [4] - Comparable Store Sales Growth in Canada was -2.5%, consistent with the average estimate from three analysts [4] - The number of stores in the United States was 172, slightly below the two-analyst average estimate of 173 [4] - The number of stores in Canada was 165, also below the two-analyst average estimate of 168 [4] - Total number of stores was 351, compared to the average estimate of 354 from two analysts [4] - U.S. Retail revenue was reported at $220.46 million, a year-over-year increase of 10.5%, slightly below the two-analyst average estimate of $220.48 million [4] - Other revenue was $30.39 million, representing an 8.8% year-over-year increase, exceeding the two-analyst average estimate of $29.75 million [4] - Canada Retail revenue was $151.13 million, a decrease of 2.7% year-over-year, compared to the average estimate of $151.78 million from two analysts [4] Stock Performance - Shares of Savers Value have returned -0.5% over the past month, while the Zacks S&P 500 composite increased by 2.6% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]

Core Viewpoint - Savers Value Village (SVV) reported quarterly earnings of $0.10 per share, missing the Zacks Consensus Estimate of $0.12 per share, and showing a decline from $0.15 per share a year ago, indicating an earnings surprise of -16.67% [1][2] Financial Performance - The company posted revenues of $401.99 million for the quarter ended December 2024, which aligns with the Zacks Consensus Estimate and represents an increase from $382.77 million year-over-year [2] - Over the last four quarters, Savers Value has not surpassed consensus EPS or revenue estimates [2] Stock Performance - Savers Value shares have increased approximately 9.3% since the beginning of the year, outperforming the S&P 500's gain of 4.5% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations for it to outperform the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $381.93 million, and for the current fiscal year, it is $0.51 on revenues of $1.66 billion [7] - The trend of estimate revisions for Savers Value is currently favorable, which could influence future stock movements [5][6] Industry Context - The Textile - Apparel industry, to which Savers Value belongs, is ranked in the top 15% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Sales Performance - Net sales for the fourth quarter increased 5.0% to $402.0 million, with constant currency net sales rising 6.0% to $405.9 million[3] - U.S. net sales increased 10.5% in the fourth quarter, while Canada net sales decreased 0.2%[3] - Comparable store sales for the fourth quarter rose 1.6%, with the U.S. increasing 4.7% and Canada decreasing 2.5%[3] - Fiscal 2024 net sales increased 2.5% to $1.54 billion, with constant currency net sales up 3.1% to $1.55 billion[3] - U.S. net sales for fiscal 2024 increased 6.7%, while Canada net sales decreased 1.6%[3] - Comparable store sales for fiscal 2024 decreased 0.1%, with the U.S. increasing 2.7% and Canada decreasing 4.0%[3] Financial Outlook - The company reaffirms its fiscal 2024 Adjusted EBITDA outlook of approximately $290 million to $300 million[2] Expansion Plans - The company plans to open 25-30 new stores in 2025, continuing its new store growth strategy[2] Investor Engagement - The company participated in the 27th Annual ICR Conference from January 13-15, 2025, to engage with investors[4] Reporting Practices - The company emphasizes the importance of constant currency reporting to facilitate period-to-period comparisons[10]