Skip to content
    SVV
    Earnings call· Jul 2026(Q2 FY26)

    Savers Value Village Q2 FY26 earnings call SVV

    Aug 6, 2026 Source

    Executive summary

    Savers Value Village Q2 FY26 — Strong US Comp Growth & ThriftIQ Rollout

    Savers Value Village delivered a strong Q2 FY26, marked by robust US comparable sales and significant adjusted EBITDA growth, reinforcing confidence in its model. The company is accelerating its path to high-teens adjusted EBITDA margins, driven by faster new store profitability and the strategic rollout of ThriftIQ, a proprietary data platform enhancing pricing consistency and customer value. While Canada's top-line growth was modest, profit improvement initiatives drove substantial margin expansion.

    Highlights

    4

    • US sales grew 11.6% with comparable store sales up 6.6%, driven by both average basket and transactions.

    • Adjusted EBITDA increased 8% to $75 million, representing 16.6% of sales.

    • New store profitability is ramping ahead of original expectations, with a North Carolina opening delivering the highest sales in company history.

    • Canada segment profit grew almost 16% and expanded segment profit margin by 330 basis points despite limited top-line growth.

    Concerns

    2

    • Canada comparable store sales increased only 0.8%, reflecting a 70 basis point benefit from the Easter shift, with management expecting roughly flat comps in the near term.

    • Selling, general and administrative expenses increased 15% to $102 million, including a $2 million impairment charge and $1 million in transaction costs.

    Guidance & targets

    18
    CategoryTargetConfidence
    Full-year 2026 Net Sales
    $1.77 billion to $1.79 billion
    high materiality
    High
    Full-year 2026 Comparable Store Sales Growth
    3% to 4%
    high materiality
    High
    Full-year 2026 Net Income
    $67 million to $76 million
    high materiality
    High
    Full-year 2026 Adjusted Net Income
    $76 million to $85 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $265 million to $275 million
    high materiality
    High
    Full-year 2026 Capital Expenditures
    $125 million to $145 million
    medium materiality
    High
    Full-year 2026 New Store Openings
    Approximately 25
    medium materiality
    High
    Full-year 2026 Net Interest Expense
    Approximately $48 million
    medium materiality
    High
    Full-year 2026 Effective Tax Rate (GAAP)
    Approximately 28%
    low materiality
    High
    Full-year 2026 Effective Tax Rate (Adjusted Net Income)
    Approximately 27%
    low materiality
    High
    Full-year 2026 Weighted Average Diluted Shares Outstanding
    Approximately 160 million
    low materiality
    High
    Q3 2026 Total Revenue Growth
    Between Q1 and Q2 levels
    medium materiality
    Medium
    Q3 2026 Comp Sales Growth
    Moderating slightly
    medium materiality
    Medium
    Q3 2026 Adjusted EBITDA
    Modestly below Q2
    medium materiality
    Medium
    Q3 2026 New Store Openings
    8
    low materiality
    High
    Adjusted EBITDA Margin Expansion
    50 to 100 basis points
    high materiality
    High
    Adjusted EBITDA Margin Target
    High teens
    high materiality
    High
    Net Leverage Ratio Target
    Under two times
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    US
    Revenue increased 11.6% to $255 million. Comparable store sales increased 6.6% fueled by both average basket and transactions with broad-based growth across regions, categories, and income cohorts. Segment profit increased by $10 million, primarily due to increased profit from comparable stores and continued maturation of new stores.
    Comparable store sales growth: 6.6%
    		$255 million11.6%—$59 million
    Canada
    Net sales and constant currency net sales both increased 2.2% to $158 million. Comparable store sales increased 0.8%, reflecting a 70 basis point benefit from the Easter holiday shift. Segment profit was up $6 million, growing almost 16%, and segment profit margin expanded by 330 basis points due to tight production management, offsite processing improvements, and new store maturation.
    Comparable store sales growth: 0.8%Segment profit margin expansion: 330 basis points
    		$158 million2.2%—$46 million

    Operational metrics

    24
    Total Net Sales
    $448 million7.4% growth
    Q2 FY26
    Constant Currency Net Sales Growth
    7.1%
    Q2 FY26

    Favorable FX impact was 170 bps lower than in Q1.

    Adjusted EBITDA
    $75 million8% increase
    Q2 FY26
    Adjusted EBITDA Margin Expansion Target
    50 to 100 basis points
    annual

    Expected to build as deployment scales, lower end in 2027, higher end in subsequent years, full annualization in 2028 and beyond. Driven by ThriftIQ, new store ramp, and profit improvement initiatives.

    Gross Profit Dollar Growth (ThriftIQ pilot stores)
    approximately 100 basis points highervs non-pilot stores
    Q2 FY26

    Translated into gross profit dollar growth that was approximately 100 basis points higher in pilot stores than in non-pilot stores.

    Training Time Reduction (ThriftIQ)
    approximately half
    Q2 FY26

    ThriftIQ helped reduce training time for new graders by approximately half.

    New Stores Positive 4-Wall Contribution
    More than halfahead of previous new store classes
    Q2 FY26

    More than half of the 2025 class of new stores generated positive 4-wall contribution in the second quarter, which is ahead of previous new store classes.

    Cost of Merchandise Sold % of Net Sales
    43.1%decreased 170 basis points
    Q2 FY26

    Due to comp leverage, efficiency initiatives, and growth in onsite donations, partially offset by new store openings.

    Salaries, Wages and Benefits
    $85 million
    Q2 FY26
    Wages and Benefits % of Net Sales (ex-IPO stock comp)
    19.7%increased 100 basis points
    Q2 FY26

    Increase driven by new store growth, higher annual incentive plan expense, and higher non-IPO related stock-based compensation.

    Selling, General and Administrative Expenses
    $102 million15% increase
    Q2 FY26
    SG&A % of Net Sales
    22.7%increased 150 basis points
    Q2 FY26
    SG&A Impairment Charge
    $2 million
    Q2 FY26

    Primarily related to the consolidation of a Canadian warehouse processing facility.

    SG&A Transaction Costs
    $1 million
    Q2 FY26

    Related to the recent repricing of term loans.

    Depreciation and Amortization
    $25 million22% increase
    Q2 FY26

    Reflecting continued investments in new stores, offsite processing, IT, and capital maintenance.

    Net Interest Expense
    $13 million19% decrease
    Q2 FY26

    Primarily due to the impact of debt refinancing last fall.

    Annualized Interest Expense Reduction
    approximately $20 million
    last year

    Reduced over the last year due to debt refinancing and repricing.

    GAAP Net Income
    $22 million
    Q2 FY26
    Adjusted Net Income
    $22 million
    Q2 FY26
    Cash and Cash Equivalents
    $92 million
    Q2 FY26 end
    Net Leverage Ratio
    2.4 times
    Q2 FY26 end
    Shares Repurchased
    1.2 million shares
    Q2 FY26
    Onsite Donations Penetration
    84.9%up from 78.5% a year ago
    Q2 FY26

    Significant growth in both countries, contributing to gross margin expansion.

    New Store Comp Benefit
    40 to 50 basis points
    Q2 FY26

    Benefit from 2023 and 2024 class new stores entering the comp base, as young comp stores grow well ahead of the mature fleet.

    Industry KPIs

    6
    MetricValueDetails
    Aur basketIncreaseddirectional
    Comparable sales6.6%%
    Segment revenue mixUS: $255 million; Canada: $158 millionUSD
    Regional market performanceUS: 11.6% net sales growth, 6.6% comp sales growth; Canada: 2.2% net sales growth, 0.8% comp sales growth%
    Subscription membership programGrowingdirectional
    Operating income EBIT and adjusted EBITDA$75 millionUSD

    Product announcements

    2
    ProductTypeDetails
    ThriftIQlaunch
    Savers Innovation Daymilestone

    Risks & headwinds

    3
    Canadian Economic ConditionsNear term

    Stable but sluggish; roughly flat comp sales expected in the near term.

    Mitigation: Tight production management, offsite processing improvements, and continued maturation of new stores to drive profit growth despite limited top-line growth.

    SG&A Cost IncreasesQ2 FY26

    Increased 15% to $102 million, or 150 basis points as a percentage of net sales.

    Mitigation: Increase primarily due to growth in store base, but also included a $2 million impairment charge and $1 million in transaction costs, some of which are non-recurring or efficiency-driven.

    New Store Drag in CanadaOngoing

    New stores are a temporary drag on margins.

    Mitigation: Shifting the vast majority of new store growth to the U.S., meaning Canada will have relatively few new store openings going forward, thus reducing the new store drag on Canadian margins.

    What to watch in Q3 FY26

    5

    ThriftIQ deployment scale and financial contribution

    Next quarter (Q3 FY26) and into 2027
    CurrentLive in 58 stores, 100 bps higher gross profit dollar growth in pilot stores.
    TargetBuilding financial contribution, lower end of 50-100 bps annual EBITDA margin expansion.

    Why it matters

    ThriftIQ is a key driver for future EBITDA margin expansion and new store profitability, with its contribution expected to build as deployment scales.

    The contribution from ThriftIQ is going to build as the deployment scales. And so, as you think about us rolling that out, you know, back half of this year, all the way through 27 and into early 2028, I would expect to see full annualization, you know, come in 28 and beyond.

    Q&A highlights

    6

    Asked for details on the assumptions underpinning the return to high-teens EBITDA margins, specifically ThriftIQ's contribution and phasing within the 50-100 bps annual expansion.

    Michael explained it's a combination of innovation (ThriftIQ), new store ramp, and ongoing comp margin leverage. ThriftIQ's contribution will build as deployment scales, expecting lower end of 50-100 bps in 2027 and higher end in subsequent years as it annualizes in 2028 and beyond.

    “The contribution from ThriftIQ is going to build as the deployment scales. And so, as you think about us rolling that out, you know, back half of this year, all the way through 27 and into early 2028, I would expect to see full annualization, you know, come in 28 and beyond.”

    asked by Brooke Roach · answered by Unknown Speaker

    2 min read6 chapters

    Detailed Narrative

    01

    ThriftIQ Platform Launch

    Savers Value Village announced ThriftIQ, a proprietary data-driven platform designed to improve pricing precision and consistency across men's and women's apparel. The platform has been tested for two years, pricing over 25 million items across 45,000 brands, and is currently operational in 58 existing stores, including most new openings over the last six months. It aims to enhance customer value, deploy proprietary data, and improve financial outcomes through stronger sales yields and larger baskets.

    02

    ThriftIQ Pilot Results and Financial Implications

    Pilot stores using ThriftIQ showed approximately 100 basis points higher gross profit dollar growth compared to non-pilot stores, driven by increased unit sell-through, larger baskets, and stronger sales yields, while maintaining average prices at or below the rest of the fleet. ThriftIQ also reduced training time for new graders by half and is helping new stores ramp to profitability faster, contributing to over half of the 2025 class generating positive 4-wall contribution in Q2.

    03

    Path to High-Teens Adjusted EBITDA Margins

    The company expects ThriftIQ, new store maturation, and other profit improvement initiatives to collectively support 50 to 100 basis points of annual adjusted EBITDA margin expansion starting in 2027, aiming for a return to high-teens margins within the next three years. The financial contribution of ThriftIQ is expected to build as deployment scales, with lower-end contributions in 2027 and higher-end contributions in subsequent years as it annualizes in 2028 and beyond.

    04

    New Store Performance and Expansion Strategy

    Savers opened four US and two Canadian locations in Q2, with a North Carolina store achieving the highest opening week sales in company history, reinforcing the model's durability and scalability. New store profitability is ramping ahead of original expectations. The company plans to open around 25 new stores in 2026, with over 20 in the US, including new markets like Tennessee. The strategy emphasizes strong site selection, dedicated support for new stores, and an evolved marketing playbook.

    05

    Capital Allocation and Balance Sheet Strength

    The company's balance sheet remains strong with $92 million in cash and cash equivalents and a net leverage ratio of 2.4 times at the end of the quarter. The capital allocation strategy prioritizes organically funding new store growth, repaying debt to target a net leverage ratio under two times by the end of next year, and opportunistically repurchasing shares. Savers repurchased 1.2 million shares at a weighted average price of $8.10 in Q2.

    06

    Canadian Market Stability and Efficiency Gains

    Despite limited top-line growth in Canada (0.8% comparable store sales), the segment grew profit by almost 16% and expanded segment profit margin by 330 basis points. This was attributed to tight production management, offsite processing improvements, and robust onsite donation growth. Management expects durable profit performance and roughly flat comparable store sales in the near term, with fewer new store openings reducing margin drag.

    AI-generated summary of the company’s earnings call. Not investment advice.