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Savers Value Village, Inc. (SVV)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered steady top-line growth and improved comps: net sales rose 4.5% to $370.1M (+7.1% constant currency) and total comp sales rose 2.8% (U.S. +4.2%; Canada +0.6%), with Adjusted EBITDA of $42.8M (11.6% margin) as new-store deleverage and FX headwinds weighed on margins .
  • Results vs S&P Global consensus: revenue modestly beat ($370.1M vs $366.2M*) and EPS exceeded ($0.02 vs ~$0.00*), while consensus EBITDA (EBITDA, not Adjusted EBITDA) appears mismatched to company’s reported Adjusted EBITDA; definition differences limit usefulness of this comparison . Values retrieved from S&P Global.*
  • Guidance reaffirmed: FY25 outlook maintained (net sales $1.61B–$1.65B; Adjusted EBITDA $245M–$265M; Adjusted EPS $0.37–$0.46), underscoring management confidence despite Canada macro and FX drag .
  • Strategic/catalyst items: continued U.S. strength, return to positive Canada comp, loyalty base nearing 6M, share repurchases (~1.4M shares at $8.43) and $44.5M note redemption; management emphasized minimal tariff exposure due to hyperlocal supply chain .

What Went Well and What Went Wrong

What Went Well

  • U.S. momentum: net sales +9.4% to $210.8M; U.S. comps +4.2% on transactions and basket growth . “Our U.S. business remains strong with nearly double-digit sales growth and healthy comps” — Mark Walsh .
  • Canada sequential improvement: positive comp (+0.6%) and constant-currency net sales +2.2% despite FX pressure . “Return to positive comp in Canada… macroeconomic conditions… remain challenging” — Mark Walsh .
  • Operating execution and innovation: expanded centralized processing centers (sixth CPC opened; ~45 stores serviced), scaling automated book processing to 170 stores, improving off-site cost per unit .

What Went Wrong

  • Margin compression: Adjusted EBITDA margin fell to 11.6% from 16.0% in Q1 2024 (new store deleverage, FX); cost of merchandise sold rose 80 bps to 45.5% of sales .
  • Canada segment profit down 27.1% YoY (FX and expense deleverage), highlighting sensitivity to CAD weakness and pressured low-income cohorts .
  • SG&A burden and new-store headwind: SG&A rose to 23.6% of sales and management reiterated 2025 ~$10M adjusted EBITDA headwind from accelerated 2024/2025 openings .

Financial Results

Consolidated P&L vs prior year, prior quarter, and consensus

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$354.2 $402.0 $370.1
Diluted EPS (GAAP) ($)$0.00 $(0.01) $(0.03)
Adjusted EPS ($)$0.09 $0.15 (new def.) $0.02
Operating Income Margin (%)4.6% 8.2% 2.8%
Adjusted EBITDA ($USD Millions)$56.7 $67.4 (new def.) $42.8
Adjusted EBITDA Margin (%)16.0% 16.8% (new def.) 11.6%
Consensus Revenue ($USD Millions)*——$366.2*
Consensus EPS ($)*——~$0.00*
Consensus EBITDA ($USD Millions)* (EBITDA)——$41.2*

Values retrieved from S&P Global.*

Segment Net Sales and Profit (Q1 YoY)

SegmentQ1 2024 Net Sales ($USD M)Q1 2025 Net Sales ($USD M)% ChangeQ1 2024 Segment Profit ($USD M)Q1 2025 Segment Profit ($USD M)
U.S. Retail$192.6 $210.8 +9.4% $40.6 $39.0
Canada Retail$134.1 $128.6 (4.1%) $34.7 $25.3
Other (Australia Retail + Wholesale)$27.5 $30.7 +11.9% $8.7 $8.7
Total$354.2 $370.1 +4.5% ——

KPIs

KPIQ1 2024Q1 2025
Comparable Store Sales – U.S.2.3% 4.2%
Comparable Store Sales – Canada(2.6%) 0.6%
Comparable Store Sales – Total0.3% 2.8%
Number of Stores – Total326 353
Pounds Processed (mm)238 262
On-site Donations + GreenDrop (% of pounds)71.9% 74.0%
Sales Yield ($ per pound)$1.41 $1.38
Cost of Merchandise Sold per pound ($)$0.66 $0.64

Guidance Changes

MetricPeriodPrevious Guidance (Feb 20, 2025)Current Guidance (May 1, 2025)Change
New store openingsFY 202525 to 30 25 to 30 Maintained
Net salesFY 2025$1.61B–$1.65B $1.61B–$1.65B Maintained
Comparable store sales growth (ex-53rd wk)FY 20250.5%–2.5% 0.5%–2.5% Maintained
Net incomeFY 2025$36M–$52M $36M–$52M Maintained
Adjusted net incomeFY 2025$62M–$77M $62M–$77M Maintained
Adjusted EBITDAFY 2025$245M–$265M $245M–$265M Maintained
Capital expendituresFY 2025$125M–$150M $125M–$150M Maintained
FX assumption (CAD/USD)FY 2025CAD 0.70 USD CAD 0.70 USD Maintained

Earnings Call Themes & Trends

TopicQ3 2024 (Nov-2024)Q4 2024 (Feb-2025)Q1 2025 (May-2025)Trend
U.S. growth and compsSteady U.S. performance; U.S. comps +1.6% U.S. comps +4.7%; double-digit U.S. revenue growth U.S. net sales +9.4%; comps +4.2%; transactions and basket both up Strengthening
Canada macro/compCanada comps (7.5%); pressure from macro/FX 500 bps sequential comp improvement; still pressured; targeting positive comps Positive comp (+0.6%); cautious outlook due to tariffs sentiment/FX Improving but fragile
FX headwindsFX unfavorable; CAD weakness noted CAD near multi-decade low; EBITDA headwind ~$6.5M for 2025 FX drag persists; Q1 COGS deleverage and FX impact noted Ongoing headwind
New store acceleration29 stores planned in 2024; pipeline confidence 25–30 stores in 2025; Year-1 profitability lag; ~$10M EBITDA headwind On track; Q1 opened 2 stores; expect 4 in Q2; margins to improve as stores mature Accelerating footprint; near-term margin drag
CPC/off-site processingCritical unlock for growth; best-practice sharing Continued expansion supporting off-site processing 6th CPC opened; ~45 stores serviced; off-site costs converging Scaling infrastructure
Loyalty/customer cohortsLoyalty ~72% of sales; growth in high-income cohorts Loyalty members up double-digit; focus on non-loyalty in Canada Nearly 6M members; high-single-digit growth Sustained loyalty expansion
Tariff exposureNot highlightedTariffs cloud Canada macro Minimal direct tariff exposure due to hyperlocal sourcing Advantage vs peers

Management Commentary

  • “Our U.S. business remains strong with nearly double-digit sales growth and healthy comps, driven by increases in both transactions and average basket. Our Canadian business saw continued sequential improvement… positive Canadian comp for the first time since Q4 2023.” — Mark Walsh .
  • “Our model is hyperlocal… virtually no direct exposure to tariffs, giving us a unique position in the retail apparel sector.” — Mark Walsh .
  • “We recently opened our sixth CPC… off-site processing is a critical enabler of our accelerated unit growth… automated book processing now expanded to 170 stores.” — Mark Walsh/Jubran Tanious .
  • “Adjusted EBITDA was $43M… new stores are a headwind to adjusted EBITDA this year… net leverage ratio of 2.4x at the end of the quarter.” — Michael Maher .

Q&A Highlights

  • U.S. strength and Canada outlook: transactions and basket growth continue in the U.S.; Canada comp turned positive with strong donations; management cautious on macro/tariffs sentiment .
  • Pricing/value strategy amid tariffs: maintain sharp price-value; potential widening price gaps viewed as opportunity for trial and share gains rather than price increases .
  • Supply/donations and labor: on-site donations robust across geographies; turnover declining; vacancies low; proactive wage assessments .
  • Margin dynamics: Q1 gross margin deleverage driven by new stores; on-site donation mix (74%) a tailwind; expect margins to improve through the year as seasonality and stores mature .
  • Real estate pipeline: opportunities from retail liquidations; disciplined openings tied to supply equation; 2 Peaches integration on track; building Southeast U.S. presence .
  • CPC capacity: ~45 stores serviced; capacity per CPC rising with efficiencies; critical to enabling locations without on-site processing .

Estimates Context

  • Revenue: actual $370.1M vs S&P Global consensus $366.2M* — modest beat . Values retrieved from S&P Global.*
  • EPS: Adjusted diluted EPS $0.02 vs consensus near $0.00* — beat . Values retrieved from S&P Global.*
  • EBITDA: Company reports Adjusted EBITDA ($42.8M), while consensus refers to EBITDA ($41.2M*). Given definitional differences, direct comparison is less meaningful; focus on trajectory and margin commentary . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • U.S. momentum intact; Canada showing early signs of recovery: comp trajectory and loyalty growth suggest durable demand, but FX and low-income cohort pressure in Canada warrant caution .
  • Near-term margin headwinds are transitory: new-store cohort (back-half 2024 openings) drives deleverage in early 2025; management reiterates inflection in profitability by 2026 as cohorts mature .
  • Structural advantages vs tariff risk: hyperlocal supply and ~$5 AUR limit direct tariff exposure, positioning SVV favorably amid potential sector-wide pricing shifts .
  • Execution levers: CPC expansion and ABP roll-out support scaling and cost convergence between off-site/on-site processing; on-site donations rising improves margin mix .
  • Capital allocation supportive: debt redemption and share repurchases demonstrate balance sheet discipline and opportunistic returns .
  • Guidance confidence: reaffirmed FY25 guidance despite FX headwinds underscores visibility; watch CAD/USD and Canada consumer indicators for estimate revisions .
  • Trading implications: positive revenue/EPS surprise and reaffirmed outlook are supportive; margin compression is known and likely to ease through the year as seasonality improves and stores mature .

Notes:

  • 8-K 2.02 Q1 2025 earnings press release fully reviewed –.
  • Q1 2025 earnings call transcript fully reviewed –.
  • Prior quarters reviewed: Q4 2024 8-K and call – –; Q3 2024 8-K –.
  • No standalone company press releases found for Q1 2025 beyond SEC 8-Ks; secondary offering and concurrent repurchase disclosed via 8-Ks (May 13/16, 2025) .