Savers Value Village (SVV) Q2 FY26 earnings call: guidance and Q&A

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

Asked how ThriftIQ impacts traffic, repeat rates, basket size, and conversion, and how the 100 bps higher gross profit dollar growth is split between sales momentum and COGS efficiencies.

Mark explained ThriftIQ improves customer value by making pricing more precise and consistent, leading to better outcomes like higher unit sell-through, larger baskets, and stronger sales yields. Michael clarified the 100 bps gross profit improvement comes from sales yield, a mix of higher sales for given production or similar sales on lower production.

“The result that we've seen in our pilot stores is it's producing better outcomes across a number of metrics. Higher unit sell-through, larger baskets, stronger sales yields. And we've talked about the faster new store ramps, very important as well. Ultimately, it's driving improved profitability.”

asked by Brooke Roach · answered by Mark Walsh

Inquired about new customer acquisition, trends from existing cohorts, market share, and constraints to sustaining mid-single-digit comps in the back half.

Mark highlighted robust new customer interaction and focus on loyalty program sign-ups. Noted growth in younger, higher, and lower household income cohorts, indicating universal appeal. Michael added that comp growth is broad-based (transactions, basket, categories, regions) and new stores entering the comp base will provide a tailwind.

“What's really exciting for us, and I think it speaks to the universal appeal of how we're delivering value and merchandise is the fact that both the high and the low end, we're seeing growth our high household income customers and our low household income customers are outpacing growth of those other the other household incomes in the middle.”

asked by Matthew Posse · answered by Mark Walsh

Asked about the cycle of Canadian margins and future potential, and what's being done differently in new store openings (e.g., North Carolina record opening) to drive awareness and performance.

Michael explained Canadian margin improvement is driven by tight production management, offsite processing improvements, and robust onsite donation growth. Canada will have fewer new store openings, reducing drag. Gibran detailed new store success factors: improved site selection algorithm, dedicated finance/leadership support, ThriftIQ streamlining training, and an evolved marketing playbook focusing on local communities and influencers.

“The first is that we've been on a continuous improvement path. with our algorithm and frankly picking winners when it comes to sites. So the site selection process has continued over the years, and I think our success bears this out.”

asked by Randal Konik · answered by Unknown Speaker

Sought clarification on how ThriftIQ represents a step change benefit compared to historical analytical pricing, and if it applies to both store and C2C operations.

Gibran explained that previously, team members subjectively graded garments. With ThriftIQ, they only identify the brand, and the system uses brand, seasonality, and sell-through data to determine price, making it objective and consistent. It will be rolled out to offsite facilities first, then traditional stores.

“Now fast forward to Thrift IQ, we're no longer asking the team member to assess condition and quality. We're simply asking them to identify the brand. We then use that brand and combine it with seasonality, sell-through to determine the price of the garment.”

asked by Peter Keith · answered by Jubran Tanious

Asked if faster new store profitability changes the underlying model and payback period, and if it argues for stepping up the opening cadence from 25 stores per year.

Michael confirmed earlier profitability ramp but stated it's too early to update the economic model. Gibran noted they like the current pace of 25 stores/year, citing strong site selection and pipeline. Emphasized ensuring sufficient supply (onsite donations) as a key constraint for accelerating openings.

“We like where we're at. We continue to see great site selection, good performance, high batting average on those. I think we've talked about in previous calls, the tone and tenor of the conversations that we've had with developers and landlords has really changed over time.”

asked by Mark Altschwager · answered by Jubran Tanious