Savers Value Village Inc (SVV, Financial) released its 8-K filing on November 7, 2024, detailing its financial performance for the third quarter ended September 28, 2024. The company, a leading for-profit thrift operator in the U.S. and Canada, reported a modest increase in net sales but faced challenges in its Canadian operations.
Company Overview
Savers Value Village Inc operates thrift stores across the United States and Canada, purchasing second-hand textiles and other goods from non-profit partners. These items are processed, priced, and sold in its stores, offering a unique value proposition in the retail sector.
Performance Highlights
In the third quarter, Savers Value Village Inc reported net sales of $394.8 million, a 0.5% increase compared to the same period last year. However, this fell short of the analyst estimate of $402.46 million. The U.S. market showed resilience with a 6.2% increase in sales, while the Canadian market saw a 7.1% decline, partly due to a timing shift in the Canada Day holiday.
Financial Achievements and Challenges
The company opened nine new stores during the quarter, bringing the total to 344 stores, and remains on track to open 29 new stores in 2024. Despite these expansions, comparable store sales decreased by 2.4%, with a notable decline in Canada. Net income was reported at $21.7 million, translating to $0.13 per diluted share, missing the estimated earnings per share of $0.14.
Mark Walsh, CEO of Savers Value Village Inc, stated, “Our team’s disciplined focus on execution enabled us to deliver the quarter in line with our expectations, driven by steady performance in our U.S. business. As expected, our Canadian business remains pressured as a result of the challenging macro environment.”
Key Financial Metrics
Adjusted EBITDA for the quarter was $82.0 million, with an adjusted EBITDA margin of 20.8%. The company also reported an increase in active loyalty program members by 11.5% to 5.8 million, highlighting strong customer engagement.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $394.8 million | $392.7 million |
| Net Income | $21.7 million | $(15.6) million |
| Adjusted EBITDA | $82.0 million | N/A |
Analysis and Outlook
Savers Value Village Inc's performance underscores the challenges faced in the Canadian market, which could impact future growth if not addressed. The company's strategy to expand its store footprint aligns with increasing consumer demand for thrift, but the pressure on comparable store sales and the Canadian market's macroeconomic environment remain concerns.
The company's narrowed full-year outlook reflects these challenges, with expected net sales between $1.53 billion and $1.54 billion, slightly below previous estimates. The focus on new store openings and loyalty program engagement will be crucial for sustaining growth in the competitive retail sector.
Explore the complete 8-K earnings release (here) from Savers Value Village Inc for further details.
