Financial Data and Key Metrics Changes - Total net sales increased by 15.6% to $465 million, with an 8.4% increase when excluding the benefit of the 53rd week [13][14] - Adjusted EBITDA for the quarter was $74 million, representing a margin of 15.9% [17] - GAAP net income for the quarter was $22 million, or $0.14 per diluted share, while adjusted net income was $24 million, or $0.15 per diluted share [17] Business Line Data and Key Metrics Changes - U.S. sales grew by 20.6% to $266 million, with comparable store sales up 8.8% [14] - Canadian sales increased by 9.1% to $156 million, with comparable store sales up 0.7% [15] - U.S. segment profit was $60 million, an increase of $11 million, while Canadian segment profit was $43 million, up $4 million [18] Market Data and Key Metrics Changes - The U.S. market showed strong momentum with broad-based gains across categories and regions, driven by younger and more affluent customers [7][8] - Canadian market conditions remained stable, with a conservative planning approach reflecting modest growth [5][8] Company Strategy and Development Direction - The company aims to expand its store footprint, planning to open around 25 new stores in 2026, primarily in the U.S. [9][24] - Focus on innovation includes the introduction of ABP Lite and investments in in-store efficiency initiatives [10][11] - Strategic pillars for long-term value creation include growth, innovation, and capital allocation [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the competitive positioning and value gaps as clothing prices rise in the U.S. [7] - The outlook for 2026 includes expected adjusted EBITDA growth with flat adjusted EBITDA margins, reflecting the maturation of new stores [19][21] - Management anticipates continued improvements in profitability and a long-term target of high teens adjusted EBITDA margins [20][81] Other Important Information - The company repaid $20 million of debt during the quarter and repurchased 1.1 million shares at a weighted average price of $8.75 [18] - The balance sheet remains strong with $86 million in cash and cash equivalents and a net leverage ratio of 2.5x [18] Q&A Session Summary Question: Progression of same-store sales post-holiday in the U.S. - Management noted continued good momentum in the U.S., with a rebound in February following disruptions from severe weather in January [29] Question: New store productivity and expected returns in the U.S. - New stores are progressing as expected, averaging around $3 million in sales in the first year, ramping up to around $5 million by the fifth year [30] Question: Latest thoughts on pricing and market share gains - Management indicated that price increases by competitors present opportunities for market share gains, with a focus on maintaining a compelling price-value relationship [34] Question: Trends with thrift customers and regional growth outlook - Management highlighted the growth of younger and more affluent customers, with broad-based growth across various U.S. markets [40][41] Question: Confidence in EBITDA margin expansion despite new store openings - Management emphasized the maturation of new stores as a key factor for future EBITDA margin expansion, expecting a modest tailwind from stores entering their third, fourth, and fifth years [65][81]

Financial Data and Key Metrics Changes - Total net sales increased by 15.6% to $465 million, with an 8.4% increase when excluding the benefit of the 53rd week [12][18] - Adjusted EBITDA for the quarter was $74 million, representing a margin of 15.9% [16][18] - GAAP net income for the quarter was $22 million, or $0.14 per diluted share, while adjusted net income was $24 million, or $0.15 per diluted share [16][18] Business Line Data and Key Metrics Changes - U.S. sales grew by 20.6% to $266 million, with comparable store sales up 8.8% driven by both transactions and average basket size [12][18] - Canadian sales increased by 9.1% to $156 million, with comparable store sales up 0.7% [13][18] - U.S. segment profit was $60 million, an increase of $11 million, while Canadian segment profit was $43 million, up $4 million [17] Market Data and Key Metrics Changes - The U.S. customer base is skewing younger and more affluent, with approximately 40% of shoppers under 45 and 45% having household incomes above $100,000 [5][6] - The Canadian market remains stable, with a conservative approach to planning due to macroeconomic conditions [6][13] Company Strategy and Development Direction - The company plans to open around 25 new stores in 2026, with over 20 of those in the U.S., including expansions into North Carolina and Tennessee [8][10] - The strategic pillars for long-term value creation include growth, innovation, and capital allocation, with a focus on enhancing the price-value equation and driving efficiency [10][11] - The company aims for a net leverage ratio of under 2x within the next couple of years, supported by strong cash flow generation [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth of thrift adoption in the U.S. and the potential for market share gains due to rising prices in new clothing and footwear [5][34] - The outlook for 2026 includes net sales of $1.76 billion to $1.79 billion, with comparable store sales growth of 2.5% to 4% [22][24] - Management anticipates modest improvements in gross profit margins as new store headwinds abate and operational efficiencies are driven [20][22] Other Important Information - The company repaid $20 million of debt during the quarter and repurchased 1.1 million shares at a weighted average price of $8.75 [17] - The company introduced ABP Lite, an asset-light extension of its automated book processing system, expected to enhance operational efficiency [9] Q&A Session Summary Question: Can you speak to the progression of same-store sales post-holiday in the U.S.? - Management noted continued good momentum in the U.S., with a rebound in February following disruptions from severe weather in January [28] Question: Can you elaborate on new store productivity and expected returns in the U.S.? - New stores are progressing as expected, averaging around $3 million in sales in the first year and ramping up to around $5 million by the fifth year [29] Question: What are your latest thoughts on pricing and market share gains? - Management believes that price increases by competitors present opportunities for market share gains, targeting price increases below inflation [34] Question: Can you provide insights on the drivers of U.S. sales acceleration? - The acceleration is attributed to the secular trend towards thrift, exceptional selection, and a strong brick-and-mortar experience [68] Question: What is the outlook for Canada? - The company plans conservatively for Canada, expecting flat to low single-digit comparable store sales growth due to a stabilized but weaker economy [69]

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]