Q3 2024 Savers Value Village Inc Earnings Call Transcript
Key Points
- Savers Value Village Inc (SVV) reported positive comp sales growth in the US, driven by increases in both transactions and average basket size.
- The company opened nine new stores in the third quarter and is on track to open 29 new stores for the year, with plans to open 25 to 30 new stores in 2025.
- SVV's loyalty program saw double-digit percentage growth in active members in both the US and Canada, with loyalty members accounting for 72% of total sales in the quarter.
- The company generated $82 million of adjusted EBITDA in the quarter, representing more than 20% of sales, showcasing the resilience of its business model.
- SVV is making significant progress in its new store expansion plans, with a focus on the US market, particularly in underpenetrated regions such as the South and Southeast.
- The Canadian business continues to face challenges due to a difficult macroeconomic environment, with comp sales trends softening.
- Comparable store sales in Canada declined by 7.5%, primarily driven by declines in transactions, and were impacted by a timing shift in the Canada Day holiday.
- New store openings are a short to medium-term headwind to profit margins, as new stores typically open at roughly half of their mature sales levels.
- Investments in offsite processing are impacting profit margins due to additional activities and costs, including freight and overhead.
- The company had to adjust its processing levels in Canada after pulling back too far, which initially caused sales trends to decelerate further.
Good afternoon and welcome to Service Value Village conference call to discuss financial results for the third quarter ending September 28, 2024. At this time, all participants are analysts and only mode later, we will conduct a question and answer session and instructions will follow at that time.
Please note that this call is being recorded and a replay of this call and related materials will be available on the company's investor relations website. The comments made during this call and the Q&A that follows are copyrighted by the company and cannot be reproduced without written authorization from the company. Certain comments made during this call may constitute forward-looking statements which are subject to significant risks and uncertainties that could cause the company's actual results to differ materially from expectations or historical performance. Please review the disclosure on forward-looking statements included in the company's earnings release and filings with the sec for a discussion of these risks and uncertainties. Please be advised that statements are current only as of the
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