Savers Value Village, Inc.

Second-quarter total net sales increased 7.4% to $448 million, with constant-currency net sales up 7.1% and comparable store sales up 4.4%. U.S. net sales increased 11.6% to $255 million and U.S. comparable store sales increased 6.6%; Canada net sales increased 2.2% to $158 million and Canada comparable store sales increased 0.8%, helped by about a 70 basis point Easter shift benefit. Gross margin improved as cost of merchandise sold fell to 43.1% of net sales, down 170 basis points; adjusted EBITDA increased 8% to $75 million, or 16.6% of sales; GAAP net income was $22 million, or $0.14 per diluted share, and adjusted net income was also $22 million, or $0.14 per diluted share. For fiscal 2026, management now expects net sales of $1.77 billion-$1.79 billion, comp growth of 3%-4%, net income of $67 million-$76 million ($0.42-$0.47 per diluted share), adjusted net income of $76 million-$85 million ($0.47-$0.53 per diluted share), adjusted EBITDA of $265 million-$275 million, capital expenditures of $125 million-$145 million, about 25 new store openings, net interest expense of approximately $48 million, and an effective tax rate of approximately 28% (about 27% for adjusted net income). For Q3, management expects revenue growth between Q1 and Q2 levels, slightly moderating comps, and adjusted EBITDA modestly below Q2 due mainly to the timing of new store openings and pre-opening expenses.

Mark Walsh emphasized that the quarter reinforced confidence in the company’s model, pointing to a third consecutive quarter of year-over-year adjusted EBITDA growth, broad-based U.S. comp strength, and improving profitability in both major markets. He said new store profitability is ramping ahead of expectations and framed ThriftIQ plus broader productivity initiatives as supporting a path back to high-teens adjusted EBITDA margins. His tone was upbeat and deliberate, stressing that growth is scalable, the customer value proposition is resonating, and innovation is becoming a bigger part of the long-term algorithm.

Michael Maher focused on the financial mechanics behind the quarter and the updated outlook. He cited gross profit dollar growth in ThriftIQ pilot stores that was approximately 100 basis points higher than non-pilot stores, more than half of the 2025 new-store class generating positive four-wall contribution in Q2, $92 million in cash, a net leverage ratio of 2.4x, and about $20 million of annualized interest expense savings from refinancing and repricing. He also noted SG&A of $102 million, cost of merchandise sold at 43.1% of sales, salaries/wages/benefits at $85 million, net interest expense of $13 million, and a share repurchase of 1.2 million shares at a weighted average price of $8.10. On capital allocation, he said the priorities remain funding new stores, repaying debt toward under 2x leverage by end of next year, and opportunistic buybacks.

Analysts pressed on what underpins the return to high-teens EBITDA margins, how much ThriftIQ contributes, and whether the company could accelerate the store-opening cadence. Management said the margin path is a mix of ThriftIQ, new-store maturation, comp leverage, and other profit-improvement initiatives, with ThriftIQ building as rollout scales and full annualization not expected until 2028 and beyond. Questions also focused on Canada margin potential, North Carolina’s strong opening, onsite donation penetration, and the impact of ThriftIQ on consumer behavior; management said Canada margins should hold or improve, the North Carolina store was a record breaker, onsite donations rose to 84.9% from 78.5% a year ago, and ThriftIQ is delivering higher unit sell-through, larger baskets, and stronger sales yields.