Summary of Savers Value Village (SVV) Q2 2026 Earnings Call

1Key Financial Results and Metrics

Total Net Sales: Increased by 7.4% to $448 million; constant currency growth of 7.1%.

U.S. Sales: Grew 11.6% to $255 million; comparable store sales (comps) up 6.6%.

Canadian Sales: Increased 2.2% to $158 million; comps up 0.8% (with a 70 basis point benefit from Easter).

Adjusted EBITDA: Rose 8% to $75 million, representing 16.6% of sales.

Net Income: $22 million, or $0.14 per diluted share.

Cash Position: $92 million in cash and cash equivalents; net leverage ratio of 2.4x.

New Store Openings: Four in the U.S. and two in Canada; positive performance noted, especially in North Carolina.

2Strategic Updates and Business Highlights

ThriftIQ Initiative: Launched to enhance pricing consistency and improve profitability. Currently operational in 58 stores, showing positive results in sales yield and gross profit.

New Store Performance: New stores are ramping to profitability faster than expected, with over half of the 2025 class achieving positive four-wall contributions.

Productivity Improvements: Continued focus on off-site processing and efficient production management, particularly in Canada, leading to margin expansion.

Innovation Day: Scheduled for early November to showcase ThriftIQ and other initiatives.

3Forward Guidance and Outlook

Updated 2026 Guidance:

Net sales projected between $1.77 billion and $1.79 billion.

Comparable store sales growth of 3%-4%.

Net income expected between $67 million and $76 million; adjusted net income between $76 million and $85 million.

Adjusted EBITDA forecasted at $265 million to $275 million.

Capital expenditures projected at $125 million to $145 million with plans for approximately 25 new store openings.

4Challenges and Points of Concern

Canadian Market: Limited top-line growth with comps only slightly positive; economic conditions expected to remain flat.

SG&A Expenses: Increased by 15% to $102 million, partly due to a $2 million impairment charge and higher costs associated with new store growth.

Market Conditions: The macro environment remains stable but sluggish, particularly in Canada, which may impact future performance.

Comp Growth Moderation: Anticipated slight moderation in comp sales growth in the back half of the year due to tougher comparisons.

5Notable Q&A Insights

ThriftIQ Contribution: Expected to provide 50-100 basis points of annual adjusted EBITDA margin expansion starting in 2027, with full annualization anticipated by 2028.

Customer Trends: Strong growth observed in younger and higher-income customer cohorts; however, pressure remains on lower-income demographics in Canada.

New Store Economics: New stores are expected to contribute positively to EBITDA, with a faster ramp-up in profitability than in previous years.

On-site Donations: Increased to 84.9% of total pounds processed, up from 78.5% a year ago, contributing positively to gross margins. Overall, SVV's Q2 2026 results reflect strong growth in the U.S. market, successful implementation of new initiatives like ThriftIQ, and a strategic focus on expanding store presence while managing costs effectively. However, challenges in the Canadian market and rising expenses present potential headwinds for the company.