Executive Summary

Q4 2024 net sales rose 5.0% to $402.0M; comparable store sales increased 1.6%, driven by double‑digit U.S. growth (+10.5%) and sequential improvement in Canada despite continued macro pressure . GAAP diluted EPS was -$0.01; adjusted EPS (old definition) was $0.10; adjusted EBITDA was $73.8M (18.4% margin) .
Management introduced FY2025 guidance: net sales $1.61B–$1.65B, comps +0.5%–+2.5%, adjusted EBITDA $245M–$265M, capex $125M–$150M; Q1 2025 later reaffirmed this outlook (maintained) .
Strategic actions: repurchased ~1.1M shares at $9.67, with $18.1M remaining; redeemed $44.5M of Senior Secured Notes (10% of balance) in February 2025, supporting deleveraging and interest expense reduction .
Near‑term margin headwinds (new store ramp and weaker CAD) temper 2025 EBITDA vs 2024; management expects an earnings inflection in 2026 as ~50 first‑year stores mature and FX headwinds normalize .

What Went Well and What Went Wrong

What Went Well

U.S. strength: “We ended 2024 with strong momentum…particularly proud of our double‑digit revenue growth in the U.S in the fourth quarter” . U.S. Q4 net sales +10.5% to $220.5M; U.S. comps +4.7% .
Operating resilience and loyalty: “The resilience of our business model allowed us to generate $74 million of adjusted EBITDA…more than 18% of sales.” Loyalty members accounted for 72% of sales, up from 70% last year .
Store growth and processing innovation: Opened 9 stores in Q4 (351 total); class performing well; off‑site processing expanding (over half of new stores to use it), with automated book processing scaled to 156+ stores .

What Went Wrong

Canada macro and comps: Canada Q4 comps declined 2.5%, with transactions pressure; FX weakened CAD, adding ~$6.5M 2025 EBITDA headwind per outlook commentary .
Gross margin pressure: Cost of merchandise sold rose 230 bps to 44.3% on new store mix and Canadian deleverage; operating margin fell to 8.2% from 9.7% YoY .
FX and non‑cash items: Q4 recorded a $14.8M FX loss; other adjustments included a $4.3M impairment charge, pressuring GAAP earnings (GAAP net loss of $1.9M) .

Financial Results

Core P&L vs prior year and prior quarter

Metric	Q4 2023	Q3 2024	Q4 2024
Net Sales ($USD Millions)	$382.8	$394.8	$402.0
Operating Income ($USD Millions)	$36.9	$48.6	$33.1
Operating Margin (% of Sales)	9.7%	12.3%	8.2%
Net Income ($USD Millions)	$43.9	$21.7	$(1.9)
Net Income Margin (%)	11.5%	5.5%	(0.5)%
GAAP Diluted EPS ($)	$0.27	$0.13	$(0.01)
Adjusted Net Income ($USD Millions, old defn)	$25.4	$25.1	$15.9
Adjusted EPS, Diluted ($, old defn)	$0.15	$0.15	$0.10
Adjusted EBITDA ($USD Millions, old defn)	$83.1	$82.0	$73.8
Adjusted EBITDA Margin (%)	21.7%	20.8%	18.4%
Consensus (S&P Global)	Unavailable*	Unavailable*	Unavailable*

*Wall Street consensus estimates from S&P Global were unavailable at the time of analysis due to API rate limits; comparisons to estimates cannot be provided.

Key comparisons:

Net sales +5.0% YoY and +1.8% QoQ, supported by U.S. strength; Canada declined YoY but improved sequentially .
Gross/operating pressure: new store ramp and Canada deleverage reduced operating margin (8.2% vs 9.7% YoY) .

Segment breakdown (Q4)

Segment	Q4 2023 Net Sales ($MM)	Q4 2024 Net Sales ($MM)	YoY Change	Q4 2023 Segment Profit ($MM)	Q4 2024 Segment Profit ($MM)	YoY Change
U.S. Retail	$199.5	$220.5	+10.5%	$51.1	$49.8	(2.4)%
Canada Retail	$155.4	$151.1	(2.7)%	$49.0	$40.3	(17.8)%
Other (Australia Retail & Wholesale)	$27.9	$30.4	+8.8%	$9.7	$8.8	(8.6)%

KPIs

KPI	Q4 2023	Q3 2024	Q4 2024
Comparable Store Sales – U.S. (%)	3.1%	1.6%	4.7%
Comparable Store Sales – Canada (%)	2.0%	(7.5)%	(2.5)%
Comparable Store Sales – Total (%)	2.6%	(2.4)%	1.6%
Number of Stores – U.S.	155	167	172
Number of Stores – Canada	159	164	165
Total Stores	326	344	351
Pounds Processed (lbs mm)	250	261	259
Sales Yield ($ per lb)	$1.54	$1.45	$1.50
Loyalty Active Members (mm)	N/A	~5.8	5.9
Loyalty % of Sales	70%	N/A	72%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($)	FY2025	N/A	$1.61B–$1.65B	Initiated
Comparable Store Sales Growth (%)	FY2025 (ex‑53rd week impact)	N/A	+0.5% to +2.5%	Initiated
Net Income ($)	FY2025	N/A	$36M–$52M	Initiated
Adjusted Net Income ($)	FY2025	N/A	$62M–$77M	Initiated
Adjusted EBITDA ($)	FY2025	N/A	$245M–$265M	Initiated
Capital Expenditures ($)	FY2025	N/A	$125M–$150M	Initiated
Diluted Shares (mm)	FY2025	N/A	~168	Initiated
FY2025 Guidance (Overall)	FY2025	Q4 introduced	Q1 2025 reaffirmed unchanged	Maintained
Adjusted EBITDA ($)	FY2024	$290M–$300M (Q3 narrowed)	Reaffirmed approx. $290M–$300M (Jan 10)	Maintained

Notes: Non‑GAAP definition changes effective FY2025 (Adjusted EBITDA now includes non‑cash occupancy, pre‑opening, store closing; comparable store sales redefined to 14 months; refined tax effect methodology). Q4/FY2024 results are presented using old definitions; FY2025 outlook uses new definitions and includes recast comparability tables in the release .

Earnings Call Themes & Trends

Topic	Q2 2024 (Q‑2)	Q3 2024 (Q‑1)	Q4 2024 (Current)	Trend
Canada macro and comps	Cited severe macro: rising unemployment, debt service; Canada comps down; managing processing and pricing tests	Canada sales pressured; total comps -2.4% in Q3; narrowed FY2024 outlook	Sequential improvement (+500 bps), but Q4 comps -2.5%; cautious 2025 outlook; tariff uncertainty	Improving sequentially; still a headwind
U.S. performance	Solid low‑single digit comps and transactions; new stores exceeding expectations	U.S. steady; Q3 comps +1.6%	U.S. comps +4.7%; double‑digit sales growth	Accelerating
New store growth & economics	2024 pipeline robust; off‑site processing unlock; stores open at ~50–60% mature volume; profitable by Year 2	9 Q3 opens; 29 in FY2024; acknowledged margin compression from ramp	9 Q4 opens; plan 25–30 in 2025; ~$10M 2025 EBITDA headwind; 2026 earnings inflection expected	Accelerating openings; near‑term margin headwind
Off‑site processing (CPC)	CPCs reduce cost/unit over time; Edmonton near parity; Hyattsville parity within ~1.5 years	Continued efficiency gains offset margin pressure	Expanded utilization; collaboration across CPCs to lower unit cost	Structural tailwind developing
FX (CAD weakness)	FX headwind recognized; risk disclosure	FX unfavorable; constant currency performance highlighted	2025 outlook assumes CAD=0.70 USD; ~1.7 pp sales drag, ~$6.5M EBITDA drag	Persistent near‑term headwind
Loyalty/customer mix	Double‑digit loyalty growth; strong retention	Loyalty ~72% of sales	Loyalty 72% of sales; higher‑income cohort mix rising; lower‑income cohorts under pressure	Expanding loyalty; mix shift upmarket
Pricing analytics	Ongoing competitive pricing; tests in Canada; focus on ROI	—	Sharpened limited pricing; strong price‑value holds; dynamic geographic/category response	Active, targeted adjustments

Management Commentary

“We are well positioned to capitalize on strong long‑term secular tailwinds and continue our pivot to growth with 25 to 30 new store openings in 2025.” — Mark Walsh, CEO .
“Our competitive pricing tools give us actionable insights…allow us to better respond to rapidly shifting competitive dynamics in a localized way…innovation is a key part of our DNA.” — Mark Walsh .
“We therefore expect new stores to be a meaningful driver of revenue growth this year, but a net headwind of approximately $10 million to adjusted EBITDA. We expect an inflection in profitability by 2026.” — Michael Maher, CFO .
“Loyalty members accounted for 72% of our total sales in the quarter, up from 70% last year.” — Mark Walsh .

Q&A Highlights

U.S. health and Canada recovery: Management emphasized broad‑based U.S. strength (transactions and basket) and a learned lesson to maintain production levels; Canada sequentially improved but remains pressured; tariffs add uncertainty .
New store economics and cadence: First‑year stores average ~$3M sales, profitable by Year 2; 20% store‑level adjusted EBITDA margin target by Year 5; 2025 openings skew to U.S.; Canada openings to slow in 2026 in favor of relocations/infill .
2025 margin bridge: ~$10M EBITDA headwind from new stores plus ~~$6.5M FX drag bridge 2024 recast EBITDA ($273M) to 2025 midpoint (~~$255–$256M); core comp EBITDA essentially flat at ~1.5% comps .
Q1 cadence: Low single‑digit sales growth expected; adjusted EBITDA margin high‑single to low‑double digits due to seasonality, lull in new store openings, and heavier FX drag in Q1 .
Pricing and inventory: Competitive pricing remains sharp (USD ~$5 AUR value proposition); selective sharpening had limited impact; robust backstock supports weather‑driven assortment needs .

Estimates Context

S&P Global consensus estimates for revenue and EPS were unavailable due to API rate limits at the time of analysis; as a result, we cannot present Q4 2024 vs. consensus, nor Q1 2025 forward comparisons at this time. We attempted retrieval but were blocked by a daily request limit. Where possible in future updates, we will anchor estimate comparisons to S&P Global consensus data [SPGI API error].

Key Takeaways for Investors

U.S. momentum offsetting Canada: U.S. Q4 comps +4.7% and net sales +10.5% underscore core growth, while Canada shows sequential improvement but remains a drag; monitor Canada comps and FX trajectory for inflection timing .
Growth pivot with near‑term margin trade‑off: 25–30 planned 2025 openings and broadened off‑site processing support high‑single digit top‑line growth over time; expect 2025 EBITDA margin compression before 2026 earnings inflection as store cohorts mature .
Balance sheet actions de‑risk: $44.5M note redemption and ongoing share repurchases (1.1M shares at $9.67; $18.1M remaining) support interest expense and share count dynamics (FY2025 diluted shares ~168M) .
Loyalty and analytics as durable moat: Loyalty penetration at 72% of sales and localized pricing analytics bolster resiliency and lift mix toward higher‑income cohorts; watch conversion of non‑loyalty customers in Canada .
Margin watch: Cost of goods up 230 bps and FX losses ($14.8M) pressured Q4 GAAP earnings; efficiency gains in CPCs and maturing stores should aid margins into 2026 .
2025 guidance maintained: FY2025 net sales $1.61B–$1.65B, comps +0.5%–+2.5%, adjusted EBITDA $245M–$265M (new definitions); unchanged in Q1 confirms management confidence despite macro headwinds .
Tactical focus: Near‑term trading likely keyed to Canada comp progression and FX; medium‑term thesis centers on U.S. white space, off‑site processing scalability, and 2026 EBITDA inflection as ~50 first‑year stores turn profitable .

Citations: All financials and commentary taken from the Q4 2024 8‑K press release and exhibits , the Q4 2024 earnings call transcript , the Q3 2024 8‑K press release , and the Jan 10 preliminary Q4/FY press release 8‑K .

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