Savers Value Village (SVV 1.07%), North America's largest for-profit thrift retailer, released its Q2 FY2025 results on July 31, 2025. The company reported better-than-expected results, with both GAAP revenue and non-GAAP EPS exceeding analyst estimates, with GAAP revenue of $417.2 million topping analyst forecasts by $8.9 million. Non-GAAP earnings per share reached $0.14, beating non-GAAP EPS estimates by $0.02 but slipping from last year. The company saw healthy comparable store sales growth of 4.6%. Management raised full-year guidance for sales, comparable store sales, adjusted net income (non-GAAP), and adjusted EBITDA (non-GAAP), indicating careful monitoring will be needed as expansion continues. Overall, the quarter underscored healthy U.S. demand and ongoing progress on store expansion, offset by cost headwinds.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.14 | $0.12 | N/A | N/A |
| Revenue (GAAP) | $417.2 million | $408.3 million | $386.7 million | 7.9 % |
| Adjusted EBITDA | $68.8 million | $72.9 million | (5.6 %) | |
| Comparable Store Sales | 4.6 % | (0.1 %) | 4.7 pp | |
| Net Income (GAAP) | $18.9 million | N/A | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Success Factors
Savers Value Village operates a chain of thrift stores in the United States, Canada, and Australia, selling secondhand clothing, household goods, and other donated items. The company sources its inventory through charitable partnerships, collecting donations at its stores, dedicated GreenDrop locations, and works directly with nonprofit groups. This thrift retail model not only supports sustainability by keeping goods out of landfills but also provides value-priced merchandise for budget-conscious shoppers.
In recent years, the business has focused on five critical areas: increasing the share of on-site and GreenDrop donations to ensure steady supply, investing in automated back-office processing, growing its popular Super Savers Club® loyalty program, expanding its store base in key markets, and leveraging its scale to maintain a competitive edge. Key factors for success include efficient supply chain management, continuous process improvement, outreach for customer engagement, and disciplined site selection for new store openings.
Quarterly Results and Notable Developments
GAAP revenue growth outpaced expectations, as Net sales (GAAP) increased to $417.2 million, helped by robust results in the United States. U.S. net sales (GAAP) jumped 10.5%, reaching $228.8 million. Comparable store sales, a closely watched retail metric that gauges sales performance at stores open at least a year, rose 4.6%. In the U.S, comparable store sales grew 6.2%.
Canada, though trailing the U.S. in growth, posted stable progress as GAAP net sales ticked up 3.4% to $155.0 million. Canadian comparable store sales recovered to a 2.6% increase, after falling 3.1% in Q2 FY2024. This improvement reflected better local execution and signs of stabilization in consumer sentiment. Elsewhere, the "Other" segment, which includes Australia, delivered 12.3% top-line growth.
Despite this widening sales base, the company faced tightening profit margins. Adjusted EBITDA fell 5.6% to $68.8 million compared to the same period in the prior year, Adjusted EBITDA margin declined from 18.9% to 16.5% compared to the same period in the prior year. The cost of merchandise sold per pound processed increased to $0.67 from $0.64. Operating expenses, including salaries and benefits, edged up slightly as a proportion of sales, even as improvements in automation and off-site processing (through central distribution centers and Automated Book Processing for used books) continued.
Store expansion continued at a steady pace, with four new stores opened, bringing the total to 354. Management signaled it remains on track to open 25 stores in fiscal 2025, focusing primarily on U.S. markets. The quarter also included continued investments in processing technology and network upgrades. Ongoing enhancements to the Super Savers Club® loyalty program contributed to customer retention, with membership reaching nearly 6 million and 72.4% of retail sales attributed to active members during fiscal year 2024.
One-time events included share repurchases totaling 0.4 million shares at an average price of $8.17. The company also repurchased approximately 2.3 million shares from major shareholders in a secondary offering. Cash balances declined to $70.6 million due to these repurchases and debt repayment.
Looking Ahead: Guidance and Investor Focus
Savers Value Village raised its full-year financial outlook. The company now expects GAAP net sales between $1.67 billion and $1.69 billion, up from its prior range of $1.61 billion to $1.65 billion. Comparable store sales growth is forecast at 3.0% to 4.5%, revised sharply higher from 0.5% to 2.5%. Net income and adjusted EBITDA guidance were both modestly increased, reflecting confidence in demand. The store opening plan remains at 25 for the year.
Management noted that profit margins will likely remain under pressure in the near term as newly opened stores mature. The company expects further improvement in profitability when these new locations ramp up, especially in the U.S. market, which management sees as its main engine for growth. Investors should watch for trends in supply costs, progress on operational efficiency, and regional performance—particularly in Canada, where profit was down despite higher sales. SVV does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
