Savers Value Village (SVV) Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics

Total Net Sales: Increased 15.6% to $465 million; 8.4% growth excluding the benefit of a 53rd week.

U.S. Sales: Grew 20.6% to $266 million; 12.6% growth when excluding the 53rd week. Comparable store sales (comps) rose 8.8%.

Canada Sales: Increased 9.1% to $156 million; 3.1% growth excluding the 53rd week. Comps rose 0.7%.

Adjusted EBITDA: $74 million, representing 15.9% of sales.

Net Income: GAAP net income of $22 million ($0.14 per diluted share); adjusted net income of $24 million ($0.15 per diluted share).

Segment Profits: U.S. segment profit increased to $60 million; Canada segment profit rose to $43 million.

Cash and Debt: $86 million in cash; net leverage ratio of 2.5x. $20 million of debt repaid during the quarter.

2Strategic Updates and Business Highlights

Store Openings: 10 new stores opened in Q4, totaling 26 for 2025. Plans to open approximately 25 new stores in 2026, with a focus on U.S. markets including North Carolina and Tennessee.

Loyalty Program: Active members reached 6.1 million.

Innovation Initiatives: Introduction of ABP Lite to enhance automated processing capabilities and investments in in-store efficiencies like AI-enabled HVAC systems.

Consumer Trends: Notable increase in younger and more affluent customers, with 40% of U.S. shoppers under 45 and 45% with household incomes above $100,000.

3Forward Guidance and Outlook

2026 Financial Outlook:

Net Sales: Projected between $1.76 billion and $1.79 billion.

Comparable Store Sales Growth: Expected between 2.5% and 4%.

Net Income: Estimated between $66 million and $78 million ($0.41 to $0.48 per diluted share).

Adjusted EBITDA: Forecasted between $260 million and $275 million.

Capital Expenditures: Anticipated between $125 million and $145 million.

First Quarter Expectations: Mid- to high single-digit revenue growth anticipated, with flat to slightly up adjusted EBITDA compared to the previous year.

4Bad News, Challenges, or Points of Concern

Canadian Market: Expected to remain conservative with flat to low single-digit comps due to a stagnant economy; reliance on operational efficiency for profit growth.

Weather Impact: Severe weather events in January disrupted business operations in both the U.S. and Canada.

Cost Pressures: Increase in salaries, wages, and benefits as a percentage of sales due to new store growth and higher wage rates.

Preopening Expenses: Higher preopening expenses expected in Q1 2026 due to a more balanced store opening schedule, impacting short-term profitability.

5Notable Q&A Insights

Consumer Behavior: The company sees a strong trend of thrift adoption, with a low attrition rate among loyalty program members, suggesting that the shift towards thrift shopping is becoming more permanent.

New Store Productivity: New stores are performing as expected, with projected sales ramping from $3 million in the first year to $5 million by the fifth year.

Pricing Strategy: The company is monitoring pricing closely and sees opportunities to gain market share as competitors raise prices, maintaining a competitive price-value relationship.

Economic Sensitivity: Management does not expect significant changes in the U.S. or Canadian economies in 2026, which could impact growth assumptions. Overall, Savers Value Village reported a strong quarter with positive momentum in the U.S. market, while navigating challenges in Canada and managing cost pressures. The outlook for 2026 remains cautiously optimistic, with a focus on store expansion and operational efficiency.