Savers Value Village (NYSE:SVV) reported what management described as an inflection quarter, delivering its first year-over-year Adjusted EBITDA growth in nearly two years as both its U.S. and Canadian segments contributed higher profit. Executives pointed to accelerating thrift adoption in the U.S., stabilizing trends in Canada, and improving returns as newer stores mature.
Fourth-quarter results and key drivers
For the fourth quarter ended January 3, 2026, total net sales increased 15.6% to $465 million. Chief Financial Officer Michael Maher said sales growth was 8.4% excluding the benefit of a 53rd week and 8.4% on a constant-currency basis. Comparable store sales increased 5.4% on a like-for-like 52-week basis.
Management highlighted strong performance in the U.S. business. U.S. net sales increased 20.6% to $266 million, or 12.6% excluding the 53rd week. Comparable store sales in the U.S. rose 8.8%, which executives said was fueled by both transactions and average basket and was broad-based across categories and regions. CEO Mark Walsh said results were driven primarily by mature stores, with limited contribution from new locations that are only beginning to enter the comp base.
In Canada, trends were described as stabilized. Canadian net sales increased 9.1%, or 3.1% excluding the 53rd week. On a constant-currency basis, Canadian net sales increased 3% to $156 million and comparable store sales increased 0.7%, driven by higher average basket. Management said it is planning conservatively in Canada and does not assume a material improvement in the Canadian economy in the near term.
Margin, expense, and segment profitability
On the cost line, cost of merchandise sold increased 30 basis points to 44.6% of net sales, which Maher attributed to the impact of new stores, partially offset by leverage on comparable sales and growth in on-site donations.
Salaries, wages, and benefits expense totaled $93 million. Excluding IPO-related stock-based compensation, salaries, wages, and benefits as a percentage of net sales increased 90 basis points to 19.2%, driven primarily by new store growth, higher wage rates, and increased annual incentive plan expense.
Selling, general, and administrative expenses rose 8% to $99 million, mainly due to store base growth. However, as a percentage of net sales, SG&A decreased 150 basis points to 21.4%. Depreciation and amortization increased 32% to $22 million, reflecting investments in new stores, the extra week, and accelerated depreciation on seven stores closed during the quarter. Net interest expense decreased 8% to $14 million, primarily due to debt refinancing, partially offset by the extra week.
By segment, U.S. segment profit was $60 million, up $11 million, which management attributed to higher profit from comparable stores and progression in new store productivity. Canada segment profit was $43 million, up $4 million due to favorable comparable store performance and new store performance. Executives repeatedly cited on-plan maturation of newer stores as a key contributor to the profit improvement.
Store growth, customer trends, and innovation initiatives
The company opened 10 new stores in the quarter, finishing 2025 with 26 openings. Walsh said new stores, as a class, continue to perform in line with expectations and reiterated the company’s long-term confidence in store growth and a targeted 20% store-level contribution margin.
For 2026, management plans to open around 25 stores, with more than 20 in the U.S. The company expects to expand into new markets in North Carolina and Tennessee and plans openings across 11 states with a mix of infill and new markets. In Canada, executives said store openings will “significantly” slow, which they expect will benefit segment margins and allow the Canadian business to remain a meaningful contributor to free cash flow.
On consumer mix, Walsh said loyalty data shows the U.S. customer base continues to skew younger and more affluent, with roughly 40% of U.S. shoppers under 45 and about 45% reporting household income above $100,000. The company reported 6.1 million total active loyalty members.
Management also outlined innovation investments and efficiency initiatives. At ICR, the company introduced ABP Lite, an asset-light extension of its automated book processing system, and expects returns comparable to the existing ABP platform. Walsh said ABP Lite is expected to extend capabilities to roughly 85% of the fleet by the end of the second quarter. Additional initiatives discussed included autonomous floor scrubbers and AI-enabled HVAC integration, with innovation focused on strengthening the price-value equation, driving efficiency and cost reduction, and expanding data science and business insights.
Capital allocation and balance sheet
Maher said the balance sheet remained strong, ending the quarter with $86 million in cash and cash equivalents and a net leverage ratio of 2.5x. During the quarter, the company repaid $20 million of debt and repurchased 1.1 million shares at a weighted average price of $8.75. Management said its model allows it to organically fund new store growth while also repaying debt and repurchasing shares, and it is targeting net leverage below 2x within the next couple of years.
Walsh also highlighted a new capital structure implemented during 2025 that he said reduces annual interest expense by $17 million and provides flexibility for continued debt reduction.
2026 outlook and first-quarter expectations
Management issued full-year fiscal 2026 guidance calling for net sales of $1.76 billion to $1.79 billion and comparable store sales growth of 2.5% to 4%. The company expects net income of $66 million to $78 million, or $0.41 to $0.48 per diluted share, and adjusted net income of $73 million to $85 million, or $0.45 to $0.53 per diluted share. Adjusted EBITDA is expected to be $260 million to $275 million, with capital expenditures of $125 million to $145 million and roughly 25 new store openings.
Maher said the company expects adjusted EBITDA growth in 2026 with roughly flat adjusted EBITDA margins, reflecting continued maturation of newer stores. He noted pre-opening expenses are expected to be approximately $14 million to $16 million, consistent with 2025, but more front-loaded due to a more balanced opening schedule across the year. The company’s planning assumptions include mid-single-digit U.S. comps and flat to low single-digit comps in Canada, with no assumed material change in either economy.
Guidance also reflects lapping a 53-week fiscal 2025, which management said represents about a 2% headwind to total sales growth in 2026 but has no impact on net income, adjusted net income, or Adjusted EBITDA. For Canada, the outlook assumes an exchange rate of $0.72 USD per CAD.
For the first quarter, Maher said the company expects mid- to high-single-digit total revenue growth, with Adjusted EBITDA dollars roughly flat to slightly up versus last year. He cited seasonality, limited new store openings, higher pre-opening expenses, and the impact of an earlier Easter (including Good Friday closures in Canada) as factors shaping the quarter.
In Q&A, management said U.S. momentum continued into the first quarter to date, though January results were disrupted by storms, with a rebound seen in February. Executives also reiterated that new store economics remain consistent with prior expectations, describing first-year sales averaging around $3 million and ramping to around $5 million by year five, with stores typically unprofitable in year one, breaking even or better by year two, and approaching a 20% contribution margin by year five.
About Savers Value Village (NYSE:SVV)
Savers Value Village, Inc (NYSE: SVV) is a publicly traded thrift retailer that operates a network of donation-based retail stores. Headquartered in Bellevue, Washington, the company specializes in selling second-hand apparel, footwear, household items, accessories and other pre-owned goods. Through its retail stores, SVV offers value-conscious shoppers the opportunity to purchase quality, gently used merchandise at affordable prices.
At the heart of the company’s model is a partnership network with more than 500 nonprofit organizations across North America.
