Savers Value Village, Inc. Reports First Quarter Financial Results and Acquisition of Thrift Store Chain with Seven Locations in Georgia

Sales increased 2.5%

Comparable store sales increased 0.3%

Entering the U.S. Southeast with seven store acquisition

Net store growth now targeted at 29 in 2024 with acquisition

Savers Value Village, Inc. (NYSE:SVV), (the "Company") today announced financial results for the thirteen weeks ended March 30, 2024 (the "first quarter").

Highlights for the First Quarter, Compared to the thirteen weeks ended April 1, 2023

• Net sales increased 2.5% to $354.2 million.
• Comparable store sales increased 0.3%, with the United States ("U.S.") up 2.3% and Canada down 2.6%.
• Sales yield² increased 1.4% to $1.41 per pound.
• The Company ended the first quarter with 326 stores, increasing its store count by 2.8%.
• Net loss of $0.5 million, or $0.00 per diluted share.
• Adjusted net income¹ increased 32.3% to $13.9 million and Adjusted net income per diluted share¹ was $0.08.
• Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA")¹ increased 2.1% to $60.3 million, and Adjusted EBITDA margin¹ decreased 10 basis points to 17.0%. Changes in foreign currency rates positively impacted Adjusted EBITDA¹ by $0.2 million during the first quarter.
• Total active members enrolled in our U.S. and Canadian loyalty programs increased 12.2% to 5.5 million.

Mark Walsh, Chief Executive Officer, commented, "Our first quarter results were in line with our expectations and guidance. Demand trends in the U.S. were strong and relatively consistent throughout the quarter, our new stores are performing well and ramping in line with plan, and the acquisition in Georgia provides an entry point into a new and high-growth region where we have no presence. With this acquisition, we now plan to add a total of 29 net new stores this year. While the macro environment in Canada is putting some pressure on our lower income customer segment, we have aligned processing levels to recent demand trends. We have also taken a number of steps to strengthen our balance sheet over the past several months and expect to end the year with net leverage around 1.5 times."

Subsequent Events

Acquisition of Thrift Store Chain with Seven Locations in Atlanta, GA

On May 6, 2024, the Company acquired 2 Peaches Group, LLC ("2 Peaches"), a thrift store chain with seven locations in the Atlanta, Georgia metropolitan area. The acquired stores are the Company's first locations in the state of Georgia and will serve as a base for the Company's entrance and expansion into the southeast region of the U.S.

Michael Maher Named as Chief Financial Officer

In a separate press release dated May 9, 2024, the Company announced that Michael Maher has been appointed to the role of Chief Financial Officer ("CFO"), replacing current CFO, Jay Stasz, effective May 13, 2024. Mr. Maher will be based at the Company's headquarters in Bellevue, Washington and will report to Mark Walsh, Chief Executive Officer. In order to assist with a successful transition, Mr. Stasz has agreed to remain employed by the Company in an advisory role through August 12, 2024.

Mr. Maher is a seasoned finance leader, bringing to the Company over 25 years of experience in the retail and consumer sectors. Most recently, he served as Interim Chief Financial Officer at Nordstrom, Inc., where he spent over 13 years in various senior finance roles and was instrumental in guiding the company through periods of transformation. His extensive finance expertise includes all aspects of business development, financial planning, accounting, reporting, treasury, tax and investor relations. He holds a Bachelor of Arts in Business Economics from the University of California, Los Angeles.

Fiscal 2024 Outlook

The Company's updated outlook for the fifty-two weeks ended December 28, 2024 ("fiscal 2024") is as follows:

• Store base increase of approximately 29, consisting of 22 new stores (unchanged) and 7 stores from our Two Peaches acquisition;
• Total net sales of approximately from $1.57 to $1.59 billion (unchanged);
• Comparable store sales growth of approximately from 2% to 3% (unchanged);
• Net income of approximately $85 million to $92 million (from $78 million previously);
• Adjusted net income¹ of approximately $126 million to $133 million (from $123 million previously);
• Adjusted EBITDA² of approximately $330 million to $340 million (from $340 million previously);
• Capital expenditures of approximately $105 to $115 million (unchanged); and
• Diluted weighted average common shares outstanding of approximately 171 million (from 172 million previously).

Included in the outlook figures contained above is contribution from the Company's acquisition of 2 Peaches. The 2 Peaches acquisition closed on May 6, 2024 and will add seven stores to the U.S. operations beginning in the second quarter ending June 30, 2024. For the period of May 7, 2024 to December 28, 2024, the acquisition is expected to generate approximately $7 million in net sales.

Conference Call Information

A conference call to discuss the first quarter financial results is scheduled for today, May 9, 2024, at 4:30 p.m. ET.

Investors and analysts who wish to participate in the call are invited to dial +1 800 549 8228 (international callers, please dial +1 289 819 1520) approximately 10 minutes prior to the start of the call. Please reference Conference ID 87107 when prompted. A live webcast of the conference call will be available over the Internet, which you may access by logging on to the Investor Relations section on the Company's website at https://ir.savers.com/events-and-presentations/default.aspx.

A recorded replay of the call will be available shortly after the conclusion of the call and remain available until May 23, 2024. To access the telephone replay, dial +1 888 660 6264 (international callers, please dial +1 289 819 1325). The access code for the replay is 87107#. A replay of the webcast will also be available within two hours of the conclusion of the call and will remain available on the website for one year.

About the Savers Value Village™ family of thrift stores

As the largest for-profit thrift operator in the U.S. and Canada for value priced pre-owned clothing, accessories and household goods, our mission is to champion reuse and inspire a future where secondhand is second nature. Learn more about the Savers family of thrift stores, our impact, and the #ThriftProud movement at savers.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and are made in reliance on the safe harbor protections provided thereunder. Forward looking statements can be identified by words such as "could," "may," "might," "will," "likely," "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "continues," "projects" and similar references to future periods, or by the inclusion of forecasts or projections, the outlook for the Company's future business, prospects, financial performance, including its fiscal 2024 outlook or financial guidance, and industry outlook. Forward-looking statements are based on the Company's current expectations and assumptions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, the Company's actual results may differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to: the impact on both the supply and demand for the Company's products caused by general economic conditions and changes in consumer confidence and spending; the Company's ability to anticipate consumer demand and to source and process a sufficient quantity of quality secondhand items at attractive prices on a recurring basis; risks related to attracting new, and retaining existing customers, including by increasing acceptance of secondhand items among new and growing customer demographics; risks associated with its status as a "brick and mortar" only retailer and its lack of operations in the growing online retail marketplace; its failure to open new profitable stores, or successfully enter new markets on a timely basis or at all; risks associated with doing business with international manufacturers and suppliers including, but not limited to, transportation and shipping challenges, regulatory risks in foreign jurisdictions (particularly in Canada, where the Company maintains extensive operations) and exchange rate risks, which the Company may not choose to fully hedge; the loss of, or disruption or interruption in the operations of, its centralized distribution centers; risks associated with litigation, the expense of defense, and the potential for adverse outcomes; its failure to properly hire and to retain key personnel and other qualified personnel or to manage labor costs; risks associated with the timely and effective deployment, protection, and defense of computer networks and other electronic systems, including e-mail; changes in government regulations, procedures and requirements; its ability to maintain an effective system of internal controls and produce timely and accurate financial statements or comply with applicable regulations; risks associated with heightened geopolitical instability due to the conflicts in the Middle East and Eastern Europe; the outbreak of viruses or widespread illness, such as the COVID-19 pandemic, natural disasters or other highly disruptive events and regulatory responses thereto; together with each of the other factors set forth under the heading "Risk Factors" in its filings with the United States Securities and Exchange Commission ("SEC"). Any forward-looking statement made by us in this press release speaks only as of the date on which it is made, and while we believe that information forms a reasonable basis for such statements, that information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Moreover, factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. The Company is not under any obligation (and specifically disclaims any such obligation) to update or alter these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

The Company reports its financial results in accordance with GAAP. Non-GAAP financial measures used by the Company include Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin. The Company has included these non-GAAP financial measures in this press release as they are key measures used by its management and its board of directors to evaluate its operating performance and the effectiveness of its business strategies, make budgeting decisions, and evaluate compensation decisions. Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and you should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP. There are limitations to using non-GAAP financial measures, including those amounts presented in accordance with the Company's definitions of Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin, as they may not be comparable to similar measures disclosed by its competitors, because not all companies and analysts calculate Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin in the same manner. Because of these limitations, you should consider Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, including, as applicable, net income and the Company's other GAAP results. The Company presents Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin because we consider these meaningful measures to share with investors because they best allow comparison of the performance of one period with that of another period. In addition, by presenting Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin, we provide investors with management's perspective of the Company's operating performance.

Adjusted net income is defined as net loss excluding the impact of loss on extinguishment of debt, IPO-related stock-based compensation expense, transaction costs, dividend-related bonus, loss (gain) on foreign currency net, certain other adjustments, the tax effect on the above adjustments, and the excess tax benefit from stock option exercises. The Company defines Adjusted net income per diluted share as Adjusted net income divided by adjusted diluted weighted average common shares outstanding.

The Company defines Adjusted EBITDA as net loss excluding the impact of interest expense, net, income tax benefit, depreciation and amortization, loss on extinguishment of debt, stock-based compensation expense, non-cash occupancy-related costs, lease intangible asset expense, pre-opening expenses, store closing expenses, transaction costs, dividend-related bonus, loss (gain) on foreign currency, net and certain other adjustments. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by net sales, expressed as a percentage.

Constant Currency

The Company reports certain operating results on a constant-currency basis in order to facilitate period-to-period comparisons of its results without regard to the impact of fluctuating foreign currency exchange rates. The term foreign currency exchange rates refers to the exchange rates used to translate the Company's operating results for all countries where the functional currency is not the U.S. Dollar into U.S. Dollars. Because the Company is a global company, foreign currency exchange rates used for translation may have a significant effect on its reported results. In general, given the Company's significant operations in Canada, the Company's financial results are affected positively by a weakening of the U.S. Dollar against the Canadian Dollar and are affected negatively by a strengthening of the U.S. Dollar against the Canadian Dollar. References to operating results on a constant-currency basis mean operating results without the impact of foreign currency exchange rate fluctuations.

The Company believes disclosure of constant-currency net sales is helpful to investors because it facilitates period-to-period comparisons of its results by increasing the transparency of its underlying performance by excluding the impact of fluctuating foreign currency exchange rates. However, constant-currency results are non-GAAP financial measures and are not meant to be considered as an alternative or substitute for comparable measures prepared in accordance with GAAP. Constant-currency results have no standardized meaning prescribed by GAAP, are not prepared under any comprehensive set of accounting rules or principles and should be read in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. Constant-currency results have limitations in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. During the thirteen weeks ended March 30, 2024, as compared to the thirteen weeks ended April 1, 2023, the U.S. Dollar was weaker relative to the Canadian Dollar but stronger relative to the Australian Dollar which overall resulted in a favorable foreign currency impact on our operating results. To present this information, our current operating results in currencies other than the U.S. dollar are converted into U.S. dollars using the average exchange rates from the comparative prior period rather than the actual average exchange rates in effect.

The following unaudited table sets forth the computation of net loss per basic and diluted share as shown on the face of the accompanying condensed consolidated statements of net loss:

The following unaudited table presents net sales by segment for the periods presented:

The following information relates to non-GAAP financial measures and should be read in conjunction with the investor call held on May 9, 2024, discussing the Company's financial condition and results of operations for the first quarter.

The following unaudited table presents a reconciliation of net loss and net loss per diluted share on a GAAP basis to Adjusted net income and Adjusted net income per diluted share for the periods presented:

A reconciliation of the Company's fiscal 2024 outlook for net income on a GAAP basis to Adjusted net income is presented in the table below:

The following unaudited table presents a reconciliation of GAAP net loss to Adjusted EBITDA for the periods presented:

Constant-currency

The Company calculates constant-currency net sales by translating current-period net sales using the average exchange rates from the comparative prior period rather than the actual average exchange rates in effect. The Company's constant-currency net sales is not a financial measure prepared in accordance with GAAP.

The following unaudited table presents a reconciliation of GAAP net sales to constant-currency net sales for the periods presented:

Supplemental Metrics

We use the supplemental metrics below to evaluate the performance of our business, identify trends, formulate financial projections and make strategic decisions. The Company believes that these metrics provide useful information to investors and others in understanding and evaluating its results of operations in the same manner as its management team.

The following unaudited table summarizes certain supplemental metrics for the periods presented:

View source version on businesswire.com: https://www.businesswire.com/news/home/20240509624482/en/