Savers Value Village, Inc. Q4 FY2025 earnings call

• U.S. business shining with strong sales growth, comps, and thrift adoption acceleration. Canada sales trends stabilized with managed production. Opened 10 new stores in Q4, 26 in 2025. Innovation efforts like ABP Lite and in-store efficiency initiatives. Progress on strategic pillars of growth, innovation, and capital allocation.
• Fourth quarter sales: U.S. net sales up 20.6% ($266M), Canada up 9.1% ($156M). Adjusted EBITDA $74M, margin 15.9%. U.S. segment profit $60M, Canada $43M. Strong cash flow, repaid debt, repurchased shares.

U.S. business: Sales grew 20.6% ($266 million), comps up 8.8% driven by transactions and average basket. Canada business: Sales trends stabilized with 0.7% comp, managed production levels to drive segment profit growth. U.S. adjusted EBITDA growth was seen, Canada's segment profit up $4 million. U.S. customer base skews younger and more affluent. New stores opened: 10 in Q4, 26 in 2025, planning ~25 in 2026 with over 20 in U.S.

Full year 2026 outlook: net sales $1.76B - $1.79B, comps growth 2.5% - 4%, net income $66M - $78M, adjusted net income $73M - $85M, adjusted EBITDA $260M - $275M, cap ex $125M - $145M, ~25 new store openings. Q1 expected mid- to high single-digit revenue growth, adjusted EBITDA flat to slightly up.

Q: Congrats on a nice quarter. Could you speak to the progression of same-store sales that you've seen post holidays in the U.S., just maybe relative to the momentum that you saw in the fourth quarter?

A: Michael Maher said they've continued to see good momentum in the U.S., but there was disruption from severe weather at the end of January, with a nice rebound in February.

Q: What are your latest thoughts on pricing, particularly as the industry has raised prices in recent months?

A: Mark Walsh said they continually monitor pricing relative to competition, see opportunity to gain share if others raise prices, target price increases to be a little under inflation.

Q: With the comp trends you're seeing, can you give us a sense of the trends with the need-to-shop-thrift customer versus the want-to-shop-thrift customer?

A: Mark Walsh said they're excited about the continued growth of younger and more affluent customers, drawn to the well-merchandised environment and price value proposition.

Q: Michael, just a point of clarification. So you gave the first quarter flat to slightly up EBITDA margin. Is that kind of the outlook for the balance of the year?

A: Michael Maher said Q1 is flat to slightly up EBITDA dollars, and after that, the overall cadence and shape of earnings will resemble 2025.

Q: On the new markets, can you talk a little bit about supply in the new markets or any surprises that you're seeing?

A: Jubran Tanious said they're excited about new markets in the U.S. with a mix of infill and greenfield markets, and are confident in supply with robust on-site donation growth.

Q: Given the typical margin drag associated with new store openings, what gives you confidence in your ability to drive EBITDA margin expansion looking longer term over the coming years while keeping unit growth steady?

A: Michael Maher said the biggest thing is the continued maturation of new stores, which will provide a tailwind as they mature toward a mature store level.

Q: We've seen a lot of commentary lately about consumers leaning pretty heavily into thrift for holiday gifting. I guess, based off what you saw in 4Q, strong quarter, obviously. But do you think that behavior is pretty sticky and could potentially carry over to other major holidays and seasonal moments maybe throughout the year?

A: Mark Walsh said they've seen very low attrition rates, indicating stickiness, and Michael Maher said it's consistent with broader consumer adoption of thrift.

Q: You guys have talked a lot about the fact you have very high brand recognition in Canada. I was just wondering, I guess, what's that comparable number? I want to say it's like over 90%. What's that comparable number in the U.S.? And then how has that changed over like the last year?

A: Mark Walsh said every U.S. market is different, with strong but unquantified brand recognition in more mature stores and rapid gain in new markets.

Q: Have you seen any shifts in terms of source of supply like between in-store versus GreenDrop versus delivered by the nonprofit, anything notable there that you've seen?

A: Jubran Tanious said no notable shifts, seeing good robust on-site donation growth across regions.