Savers Value Village Q3 Earnings Call Highlights

Key Points

• Third-quarter performance improved: Net sales rose 8.5% to $463 million, comparable-store sales increased 4.2%, and adjusted EBITDA grew 8% to $76 million—marking a fourth straight quarter of adjusted EBITDA growth.
• U.S. growth led while Canada’s profitability strengthened: U.S. comparable-store sales increased 5.9%, while Canadian segment profit rose $5 million and its margin expanded 210 basis points.
• 2026 guidance and investments: Savers expects $1.77 billion to $1.78 billion in full-year sales and $270 million to $275 million in adjusted EBITDA. It is expanding pricing and labor-saving technologies, with the Autotagger rollout expected to generate about $10 million in annualized labor savings when fully deployed.

Savers Value Village NYSE: SVV reported an 8.5% increase in third-quarter net sales, as strong U.S. comparable-store growth and improving Canadian profitability helped the thrift retailer post its fourth consecutive quarter of adjusted EBITDA growth.

Net sales for the quarter ended Oct. 3, 2026, rose to $463 million, while comparable-store sales increased 4.2%. Adjusted EBITDA climbed 8% to $76 million, or 16.4% of sales. Net income was $23 million, or $0.15 per diluted share, while adjusted net income was $26 million, or $0.16 per diluted share.

The company updated its full-year outlook and said it expects modest adjusted EBITDA margin expansion in the fourth quarter. Management also outlined plans to deploy pricing and labor-saving technologies across its stores over the next two years.

U.S. Growth Leads, While Canada Improves

U.S. net sales increased 12.2% to $263 million, with comparable-store sales up 5.9% on growth in both transactions and average basket size. CEO Mark Walsh said the comparable-sales increase was broad-based across regions, product categories and income groups, with younger and higher-income shoppers among the strongest demographics.

In Canada, net sales rose 2.5% to $167 million, or 4.3% on a constant-currency basis. Comparable-store sales increased 1.5%, driven by average basket size. Canadian segment profit rose $5 million to $50 million, and segment margin expanded 210 basis points.

CFO Michael Maher attributed the Canadian improvement to factors including growth in on-site donations, disciplined production management, productivity gains and maturing new stores. Walsh said the company saw growth among lower-income Canadian shoppers, a group management had previously described as being on the sidelines. He added that the company would continue to plan conservatively.

Maher said U.S. comparable-sales growth moderated slightly during the third quarter and continued to moderate in early fourth-quarter trading as the company faced a strong comparison with the prior year. Canadian comparable sales in early fourth-quarter trading were roughly in line with the third quarter, he said.

Technology Rollout and Store Expansion

The company opened eight U.S. stores and one Australian store during the quarter, including its first location in Tennessee. It maintained its plan to open approximately 25 stores in 2026, more than 20 of them in the U.S., and expects seven openings in the fourth quarter.

Management said new-store profitability is improving faster than originally expected, supported by site selection, operational execution, marketing and the company’s ThriftIQ pricing platform. Maher said ThriftIQ reduces the time needed to train new merchandise graders by roughly half.

ThriftIQ was live in 108 U.S. and Canadian stores at quarter-end and had priced more than 40 million items. Maher said stores using the system were seeing faster gross-profit growth than the rest of the fleet, although its contribution to the overall business remains relatively small as pricing recommendations take time to flow through.

The company also introduced a patent-pending Autotagger with integrated image capture. President and Chief Operating Officer Jubran Tanious said its rollout is expected to extend into the first half of 2028, broadly matching the ThriftIQ deployment schedule.

Maher said Savers expects to spend approximately $40 million in capital expenditures over the next couple of years on the Autotagger rollout. Once fully deployed, the Autotagger and image-capture technologies are expected to deliver approximately $10 million in annualized labor savings.

Updated Outlook and Margin Targets

For fiscal 2026, Savers expects net sales of $1.77 billion to $1.78 billion and comparable-store sales growth of 3.5% to 4.0%. Its updated outlook also calls for:

• Net income of $69 million to $75 million, or $0.43 to $0.47 per diluted share.
• Adjusted net income of $76 million to $83 million, or $0.48 to $0.52 per diluted share.
• Adjusted EBITDA of $270 million to $275 million.
• Capital expenditures of $135 million to $145 million.

Maher said the updated forecast reflects the third-quarter performance while leaving the company’s fourth-quarter view largely unchanged. Savers expects fourth-quarter revenue to be roughly flat year over year, or up by a mid- to high-single-digit percentage excluding the impact of the prior year’s 53rd week.

For 2027, Maher said the company continues to expect adjusted EBITDA margin expansion near the lower end of its previously stated range of 50 to 100 basis points annually over the next three years. The outlook includes the anticipated benefits of ThriftIQ, the Autotagger and image capture, as well as comparable-sales leverage and new-store maturation.

Savers ended the quarter with $60 million in cash and a net leverage ratio of 2.3 times. It repaid $52 million of debt during the quarter and repurchased 1 million shares at a weighted average price of $9.79 as part of an August secondary offering.

About Savers Value Village (NYSE:SVV)

Savers Value Village, Inc operates a network of for-profit thrift stores in the United States, Canada and Australia. The company sells previously owned clothing, footwear, accessories, household goods, books and other merchandise through retail locations operating under banners that include Savers, Value Village, Unique and Village des Valeurs.

The company's business model centers on sourcing secondhand goods through purchases from nonprofit organizations, individual donations and other channels.

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