Savers Value Village, Inc. Q1 FY2025 earnings call

• U.S. business remains strong with nearly double-digit sales growth and healthy comps. - Canadian business had positive comp for first time since Q4 2023, with continued sequential improvement. - Opened 2 new stores in the quarter, on track for 2025 new store targets. - Loyalty program reached nearly 6 million active members. - Generated $43 million of adjusted EBITDA (11.6% of sales). - Opened 6th CPC in Southern California earlier than planned, off-site processing powers new store growth. - Automated book processing expanded to 170 stores.

The U.S. business had net sales increase 9.4% to $211 million with comparable store sales up 4.2%, driven by transactions and average basket growth. The Canadian business saw net sales decline 4.1% (but up 2.2% on constant currency) with comparable store sales up 0.6% (positive comp since Q4 2023), primarily due to average basket increase. U.S. segment contributed approximately 57% of total net sales ($211M out of $370M), while Canadian segment contributed approximately 37% ($137M out of $370M).

• 25 to 30 new store openings in 2025. - Net sales expected to be $1.61 billion to $1.65 billion. - Comparable store sales growth 0.5% to 2.5% (U.S. outperforming Canada). - Net income $36 million to $52 million ($0.21 to $0.31 per diluted share). - Adjusted net income $62 million to $77 million ($0.37 to $0.46 per diluted share). - Adjusted EBITDA $245 million to $265 million. - Capital expenditures $125 million to $150 million.

• Tariffs could create uncertainty in consumer spending. - Macroeconomic conditions in Canada remain challenging. - New stores are a headwind to adjusted EBITDA initially as they haven't reached profitability yet.

Q: Can you unpack more on U.S. strength and Canada's outlook?

A: On U.S., sales growth driven by transactions and average basket; on Canada, execution, selection, and donation flow contributing to positive comp, but tariffs add uncertainty.

Q: Would Savers use pricing opportunities if value gap widens?

A: If value gap widens, it's an opportunity for trial, loyalty growth, market share gains, but not planning to raise prices directly.

Q: Break down first quarter gross margin contraction?

A: Driven by new store deleverage, but offset by healthy growth in on-site donations.

Q: Update on 2 Peaches integration and real estate availability?

A: 2 Peaches integration on track, prospecting real estate in North America, with positive landlord conversations.