SVV - Earnings call transcript Q4 2024 | Savers Value Village, Inc.

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Operator

Good afternoon, and welcome to Savers Value Village's conference call to discuss financial results for the fourth quarter ending December 28, 2024. (Operator Instructions.) 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 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 currently only as of the date of this call, and while the company may choose to update these statements in the future, it is under no obligation to do so as required by applicable law or regulation. The company may also discuss certain non-GAAP financial measures. of financial measures in measure release SEC each directly the today's of and GAAP comparable can filings. reconciliation these to non-GAAP most earnings A be found

Chief today's Operating Walsh, Chief Michael you Treasury. sir. President Maher, and ahead, are on of President Officer Officer, management Financial may Yruma, the Jubran Tanious, go from Mark Joining Mr. Walsh, Ed Executive Chief Investor Officer, and and call Vice Relations

Mark Walsh

you, joining Thank good us We afternoon, you appreciate and everyone. today.

you giving performance in by The Canada. trends in start saw few about highlights things the quarter me U.S. Let we the doing the across forward. fourth our a were we within a the range and the healthy saw on quarter overall and trends business talk of acceleration then fourth and to our we are drive expectations,

Our positive generate both and continue average U.S. basket. increase comp sales and remains in business driven by transactions to solid growth,

months. improvement the engendered Our fourth and where a sequential freshness as yet we delivered Canadian reaction. focus store business positive with opened in quarter, expect. We XXXX have new saw last nine consumer over trends our to are That Canada In sharp coupled the do in work continued new we not said, the on value, more stores five sales against the quarter targets.

store And XX% for We targeted out are we confident long-term in adjusted opening that profitable XX as will we drive our XXXX. called new our plan XX to EBITDA ICR, growth. believe store margins at level

to but contribution new expect point an help XXXX from will our as be profit we a to in headwind new important will EBITDA. XXXX will As well, sales stores perform stores. continue adjusted inflection a growth, which accelerating be drive class,

the last solid last see in Loyalty program in our year. up active to members over members with from double-digit continue total year. loyalty for sales accounted percent quarter, of XX% growth in XX% also our We growth

of adjusted $XX EBITDA allowed XX% our or Finally, more than us sales. in business of of to quarter model the the million generate resilience

the performance U.S. strengthened sales both quarter Canada. in and Our in the fourth

are by growth pleased is strong continue The revenue double-digit growth in We new store white sales. comparable opportunities. U.S., U.S. see space store to growth we and significant driven market, with and total our especially the key accelerating

on work discount we value have reaffirms competitive pricing, off-price drift, Our offering retail and strong looking consumers. across a that for price

think better agility. that Our a localized important insights competitive challenging of a competitive This and of tools our environment. rapidly in we is shifting processes actionable are a These to key enhances pricing in great innovation is us our respond give dynamics macroeconomic further analytics allow particularly part DNA. example to which way, us a how

more technology identify to to use serve our to opportunities continue better customers. data We and

in Canada summer our on back the third call, too quarter levels during noted we far we As in production pulled months.

well has pleased and are responded improvement helped levels the inventory We We improved consumer level drive rebalanced to surgical adjustments sequential comp. XXX basis our since a that our Canadian in point then. Canadian believe price

and slightly, interest Canadian down tariff said, Bank Canada sentiment. That was clouds ever there has of landscape The For XXXX, small Unemployment the picture. consumer is is certainly reducing rates. in the a improvement changing. issue ticked the

love. innovations value Canadians conservatively what staying great to come same our planning improvements on We the can and with and our in control, stronger continuing focused drive are business processes, have we to making

is positive comparable goal get sales back business growth. our to Canadian to store Our simple,

comprehensive visited We've done adjusted XX in growth new our store grow XX underpenetrated our this to in opportunity. think a such is use as West. to South level the about optimistic major long-term even XX% teams. accelerated fleet. The new will to a Australian store underpins business regions support confidence excited is margin, and excited in are are and I'm our the our This first capabilities opportunity, analysis capital the to continue with that of targeted best long-term half our in more With footprint I our and also and we away that year We and store store XXXX our opening highly sector U.S. we XXXX. real that added there understand recently maturation stores particularly fragmented openings. estate the to growth our our came openings and expanding and emerging, and we store of other second four economics open our and and EBITDA on XX store in

of the processing accelerating to expansion element new growth essential capabilities. store off-site Another our is

open central has of support This already going for facilities and warehouse for proven processing. unlock that locations off-site critical network stores processing stores off-site than various new forward Our with a expect new be on-site store to half more plans processing. to of centers in can't enables form utilize of growth us some our our reasons, to

central between operating in an best continue our collaboration effort which help to share are per will lower practices, cost to great centers We processing unit. seeing

built make our technologies we year book XXX more continue is addition, our members stores. In to took agile conditions over exploring innovation are and innovation In the our more their efficiently. automated closing, to of the team work a model. macroeconomic out it XXXX to operating support capabilities more processing. refined for dedication after than challenging have XX,XXX And Savers We with A rolled thank returns, run and business. to our strong business new family. great always financial out as come now and better, let seeing embrace new we example We of and me

our Our in nature. values, footprint. am you our throughout I We consumers growth highly store on second our progress assortment than us confident prospects long-term in our make XXXX. expanding compelling look ever forward confident mission and which make in positively updating to secondhand more our and great to to react

XXXX. call Now fourth the quarter to outlook and financial over to I'll the turn Michael our discuss performance for

Michael Maher

everyone. afternoon, and Mark, Thank good you,

despite the a constant in sales of On million. X.X% lower-income net to constraints power, sales within increased basis, on continued X% especially consumer expectations. increased has consumers. comparable -- and indicated, on U.S. currency sales the pleased were our X% a quarter with net increased fourth $XXX store Mark sales we effect results spending As had double-digit are disproportionate the which growth Total

pressured challenges, improvement to Canada While able XXX store we continue our sales. sequential by to comparable were be point in macroeconomic results drive a basis

X.X%, X.X% merchandise primarily XX.X% of the net We sales of driven store also to achieving Canada, expense currency sales as decrease a declined million million. sales and and a organic stores the the basket. On new transactions. Cost increased $XXX new by during comparable dollar. both store Canadian comparable XX and increase of the declined a deleverage to net Canadian weaker sales stores increased store $XXX $XX sales quarter, net transactions average reflecting constant opened comparable target In declined U.S., nine year. In sales. XXX by percentage net the X.X%, points impact a Canadian was stores on in sold lower basis increased our in to benefits and growth new million with X.X%, and of reflecting wages basis, for XX.X%, driven Salaries, sales

foreign a million due diluted or to salaries, compensation, X% per XX.X%; year net to stores, store profit U.S. discipline. Depreciation EBITDA million new higher and $X.X processing versus prior new Fourth stores the Canadian due period, of prior and EBITDA store new period benefits continued primarily expense was reflects $X.X IPO-related wages or quarter Excluding related points increased margin Net profit million, year comp wages $X.XX debt preopening benefiting per down percentage basis segment growth new income XX automated down sales partially sales stock-based due in loss million, investments and to was share. by quarter $X.X currency driven the reflecting XX% million expense diluted of to and centralized interest average amortization adjusted to was on systems. to expenses. $XX.X as primarily and segment net offset $X.XX Adjusted versus and and increased million $XX processing primarily expenses, Canada XX.X%. primarily stores expenses. for rates. the net Other share. a increase net $XX.X decreased was by loss was weaker million, was centers a reduced million, dollar. GAAP was preopening million, $XX.X expense lower book the declines, adjusted and to $XX $XX interest $XX and million

allocation. sheet. to balance capital our funds a Turning remain committed our We disciplined that now approach and strengthens to growth

capital our As we opportunistic to continues cash will flow, shareholders. repay business to and to continue debt returning in generate be strong

month, strong during stock balance. outstanding X.X of leverage notes of share. ratio average balance our at equivalents quarter. $X.XX a XX% approximately with secured the of the common an the $XX.X of million $XXX net we and or cash and remains redeemed the sheet cash senior million our quarter of end in per We price shares X.Xx repurchased at million This Our of

of the had As repurchase fourth our authorization. the quarter, share approximately $XX million of remaining end we on

new like providing near-term for I'd the the which impact also environment outlook of business momentum outlook. XXXX, to I'll our our Finally, openings. believe reflects by while acknowledging context we for start store discuss in the macroeconomic some continued and important

our We, year XXXX openings, stores XXXX. we approximately average, year. discussed, first expect XX approximately new their will are of point approximately inflection we but year million in stores in their an First, XXXX net we've operation therefore, long-term EBITDA. a and strategy. driver as of headwind first to achieve $X Between million profitability a meaningful in at stores previously and our new growth have On in to growth generate adjusted of their second in be by this year, revenue sales $XX

by drive We mature these and both growth. expect profitability bottom stores an top inflection in as and XXXX line

the a cautious steady planning Canada. U.S. a sales taking conservative to growth in store growth with are we comparable continued in and approach approach Second,

indicated, but uncertainty. currently relative a for has additional related to of creates dollar Canadian shown weakened is the has the and On stabilization near the a Mark low economy new multi-decade recently, some the dollar. Canadian trading signs tariffs note, U.S. As potential

USD by $X.X which effective Canadian for Please negatively exchange we store with million. Also, adjusted based to year-over-year amounts adjusted release for outlook and in XXXX XXXX, X.XX and for month, recast is financial last income as EBITDA we dollar, these announced approximately percentage our companies. X.X sales adjusted earnings of of growth the comparisons measurements details refer a improved report today's impacts comparability. by measures, new an our changes our for Our and are points way on accelerating per estimated changing approximately and consistency better EBITDA peer on based rate previous we including non-GAAP comparable for reflect additional sales, net on certain year for to

million. will $X.XX on impact adjusted net new using income billion XXrd impact adjusted significant $XXX up sales be net second continuing openings, on $XXX with which of growth and sales the no store of million $XXX of which fiscal with using approximately net X.X% XX-week million to There We billion; year a the the comparable adjusted will a $XX is capital growth, like-for-like new also occur with compared in EBITDA. to our expenditures of $XX X.X% income X.X% Finally, $XXX using week definition. Adjusted to no income in definition XXXX the same includes for sales that outperform mind, will add our the half XXXX XXXX following: $XXX definition using XX context income, Canada; of full to million with the of comparable our outlook in million basis. With in to store million; $XX U.S. million $XX is compared reported or definition XX-week estimate $X.XX on year. new EBITDA net to net same million year; million to XXXX sales million the total of to store to XX $XX most

assumes outlook net and tax for XX%. rate effective of net $XX expense of approximately Our income an approximately million interest

effective income, any approximately net repurchases. an does projecting rate potential shares of adjusted XXX For the share not full million XX%. for We're diluted assuming weighted tax future contemplate we be average approximately outstanding to are This year.

terms of quarter to will our on expectations to briefly year of QX like in the I'd EBITDA of a be adjusted quarter. due our both Finally, for and revenue the factors. smallest touch number first

first The normal due is variations. to quarter smallest seasonal typically our

with back again the openings the In we and store one relocation quarter. picks before new during will temporary new pace second stores addition, have a in in up lull quarter the two

and are weighted, Finally, stores XXXX their year still generating half are first operating early quarter. were most back store openings first of operation still since in the our in those of new therefore losses

the We begin profitability most them expect year. of this to achieving end by of

first in like single quarter low the As our sales digits questions. call digits. This prepared to open and factors, result the quarter expect the We single a remarks. high a these digits first of adjusted would EBITDA total now for the in concludes growth double to we Operator? low in margin

Operator

is (Operator Instructions.) question Boss first Matthew Your from JPMorgan. from

Matthew Boss

progress. the Congrats on

your in XXXX. So Mark, on improvement the you current elaborate speak in to putting maybe could sequential just of peak drivers growth and U.S. Canada maybe health of the business,

Mark Walsh

Thanks, And throughout we through new prepared quarter. when quarter. end the gotten as did acceleration Matt. in beginning to we the I when across have the strong appreciate we Canada that's us transactions solid positive articulated we we be. a It's the Look, complicated continues and cohorts. see our and as has both the in the the U.S. that Canadian the the rebalanced is within improvement in prepared base continues that thoughts. business more remarks, consistently to where grow and really improvement fourth be in business growth saw year, consumer our remarks, membership, bit to loyalty the sequential in August of team levels, a want fourth production obviously articulated remains the in not

and bit Canada lowering has upwards. Tariffs the confidence months us. several last and of direction, we're inching unemployment a The a and little in uncertainty while for over of satisfied -- in -- down create new stabilizing an consumer ticked been So, certainly slightly. more the Bank uncertainty was right did not has aggressive interest rates welcome

core happening In remain terms of what's business, strong. donations with our

saw half the a the The January. quarter into of first as the a little weather mean, we the has XXXX February I quarter of been clouded progression into as fourth, quarter, translated nice impacts more muddy first have this third, first well picture.

Our If that this, though, rearticulate to our after level in demand. simple: consumer very point. of would provides wanted customer the and selection learned. is Jubran was lesson approach, that maintain production they that the with It our he jump key

Second, stay value. sharp on price

conservatively. added consumers our offers control, that with we connect with give to what throughout can continue year, plan Third, controlling the them value essentially

again, think with value. Canadian our well serve when I value, with innovation be we'll the price the and sharp to and attractive cycle turns, that additional selection positioned consumer great

Matthew Boss

Maybe, could follow the new If inflection for store new pipeline Maybe of the time up you profitability. to just you on and through could on Michael, recent that. the speak more XXXX? walk store just to elaborate line economics to on the builds the some for

Michael Maher

Matt. it, Yes, you got

in mix typically about month, of They ICR the as profitability X. XX% year. the mature become So, around money in sales their donation we their But Year because They ramps. to open roughly XX% average lower. of store by at EBITDA on way and by last on roughly in lose their first talked first stores the new though, at a $X quickly on-site margin million Year X volume typically is year, -- they're profitable

as XXXX about the new most pronounced store headwind is $XX XX at were last now year. which a the we from year backloaded. there margins short profit our the more And accelerate in million as to because especially XXXX. Matt, we new in quantified this And stores recall, So, growth, new is in year, we're we to in stores opened current XX of adding last you'll class XX term, store

one-year new profitability But year. that -- these of store that which to lag out this stores their expect that just a the which year go. up the profitable those their becomes new next there's laid from and we seeing ramp inflection, curve, store So, inflection, second as become continue earnings way the year economics to nature we tailwind we're essentially as work by maturity that means I sales see to a the

like the a little the I it's lull of a a of as year, said, Matt, bit cadence that As QX. in -- little through bit far

It's two We largely to back a in have we'll of be We'll pace, we'll see QX, QX. temporary sort store new get and lull. a normal openings. caught to pace by over-index of that we'll kind QX. up --

Mark Walsh

Look, on in capital stores. And use The white it open the very new new Matt, the more me thing those one stores. our best is add U.S. remains to compelling. let space of

will lion's I and store of XXXX, the in growth. more our in share U.S. XXXX the be so think new

targeted Our Jubran strong considerably Canadian market have to that supply cadence a done this effectively relocations new as importantly, opportunities. the focusing slow supplement estate base year, on these continue the growing, as really roll into and look and just we teams out to stores fill-ins. will muscle count can opening that on as new future. the job great with supply And is operations really after strategic in store real we to well developing

new and about we direction group I feel our store good group really the as opportunity results -- initiative, the So, of ahead. think the the a

Operator

is Altschwager from question Mark next from Baird. Your

Mark Altschwager

XXXX I was a unpack the just further. guide hoping to little bit

contribution. other hundred how impact X Year gross to at I of called some know specifically thinking So, store guiding year? of about of margin of that out the specifically of you EBITDA margin on we couple kind be $XX maybe factors basis are through midpoint. that you're a million should the and you driving points deleverage deleverage there the Can new the unpack the for

Michael Maher

Yes, it, got you Mark.

let XXXX. maybe back EBITDA So our me XXXX step and the help to from to outlook bridge for try just

that sure $XXX So, definition, beginning include we XXXX grounded the Recall and we'll store exclude. that other definition EBITDA used to preopening first the we're to that we're by making number. changing on in million. start was Under just XXXX, expenses new expenses

will that a I unique EBITDA headwind comparisons the a follow the in have XXXX year. inflection for Now later. like that store million we those is new earnings the point because, elements one sales, pressuring we're we about, inflection investments $XX said, to this two Number are for year but talked

million. $XX that's So,

is second the dollar. Canadian weaker The

forward as the rate of well. USD the at weaker that's where most X.XX today. than have of That's it for XXXX. trading around That's year curves down, for the sort it's So, average

that so headwind XXXX an in to million relative means XXXX. additional And EBITDA $X.X to

items, So, $XXX million, midpoint XXXX sales you at that of And million. number at our if million of you $XXX that our comp roughly unique from just XXXX take X.X% have those bridges the guidance, right midpoint we $XXX around two increase. to about

core that our essentially two X.X% on So, items that are comp those flat comp. out excluding I called distinct EBITDA,

up then go where guidance X.X%, are high to like EBITDA from the of higher. If you million range, move our there our sales comp $XX have end we and

our low with long-term that a low comps. So, single-digit it's about I consistent growth we've at algorithm talked think --

growth But as to year. low new now said is stores. We drive investment We're the while, we've EBITDA single-digit expect comps. EBITDA a at XXXX growth the investing for in

We of will headwind now but see that have the sales, in XXXX. course, the translation. follow we earnings And foreign currency in added the of

Mark Altschwager

That's to was helpful. bigger very And on going of kind just I beyond up algorithm the XXXX. follow picture

I spoke just guess, leverage presumably as think from tailwind. large cohort ramping a a X.X%. the comp that's be of part of kind should to a benefit start the realize You going to building comp to of north kind you on algo? of it we of How stores, about

little you're speak more of just about comp a outlook. maybe the medium-term how So, kind thinking bit the to

Michael Maher

over market continue our is EBITDA few support I more all, we expect long-term will investments Mark. which do me I but reiterate Canada, we're think years, mean those teens mean us. specificity. for and high continue not new right. driven right, see to any as we will that the financial is obviously let the growth model We and of high U.S., that's it. mature, business Yes, low growth as XXXX comps, single-digit guide that's growth going margin a first a expand. to next total stores, by to revenue And we which -- -- to see that single-digit the primarily But we with outperform to mature

stores. stores medium-term as will as near- as you'd some outgrow think growth, to But store the mature to continue the as store openings, entering that have we will we'll because, comp help comp not stores feed which base. comp new a store accelerating only we we're growth are young that significant through have more new tend mentioned, expect, that continue maturing And build by number but comp pipeline, XXXX, XXXX. So, headwinds you our younger of we to that

Operator

Brooke Your Goldman next from is question from Roach Sachs.

Brooke Roach

your that the loyalty in a spoke but changes you seeing Mark, you're Can proportion prepared you the seeing little also expand what remarks, in environment the the of an the sales today? the to customer base, in as among you're bit the repeat pressures customers about speak macroeconomic you in given more store customers. and from cohorts increase

Mark Walsh

Thanks, Brooke. Great question.

where the steady, U.S., on the So, an I income to chain. place to the continues income, would decline, Canada above our increase that is of continue is decline at in see that both that say cohort and household seeing end remain $XXX,XXX we as income in both in the overall household of we're The that an the matching customer perspective countries, and cohort pie. lower trend line cohorts pretty the

think we real weakness customer around a when in trade effort the may on we income higher pressure about in and offset of is While we're when down, in the are And down put Canada being we trade these some our issue trends, by some for us continued the seeing be comp lower seeing to continuing and of Canada. consumer are where gains non-loyalty income lot Unfortunately, that's some -- focus. cohorts. the construct, in you

Brooke Roach

helpful really color. That's

the year. that you as us to For margin And quarter? could a the thinking first should the that result EBITDA to margin help the in of quarter you be expect path Michael, the throughout return some that that pressure hoping pressure EBITDA understand healthy drives the low I see first what growth? growth. of is we was additional single-digit But likely how sales cadence the about Understood to

Michael Maher

Yes. Thanks, Good question. Brooks.

seasonality, our this normal different that's of sales right. year, QX, of just of is lowest So, no year. all, the typically, because that's and first quarter our

We'll new just as a in mentioned earlier, We have quarter. store also have, this two I slowdown temporary openings.

the drag in And lower. mentioned actually to just will a It's a little X% sales total weaker the contribution about first little It's Canadian north comparison. so, first dollar quarter the be of in new stores growth of is to that the year. of higher year-over-year X.X% I And that because then total on our a addition, growth quarter. the the than sales in

that then comprised a the of higher of single-digit get FX low low growth in sales then which the that So, that to store all quarter, contribution we is single-digit first drag. basically say new comp, to total and

margin, the base. it's there driver the -- is and Number leveraging on new QX. bit the the deleverage right, on timing stores. that, in little the lower is twofold. EBITDA On sales, one top There's a cost of the the of just But dynamics of the

the significantly as So, class, XXXX I earlier, backloaded. mentioned was

obviously stores in very early losses. those and So, generating their first are ramp year still operating

double And with the of That expect the high somewhere our outlook. we upshot EBITDA margins be so, the that quarters, first full consistent EBITDA quarter in digits low the would that remaining outlier The in quarter. is the we to is single to expect year margin more digits.

Operator

question is Guggenheim. next Your from Bob from Drbul

Robert Drbul

Just a couple for of questions me.

sort stores impact had year, -- about of have can the and been two you right the sort think in but thus this in any of improve and able some the any of one, December, in just about have I some to were the months talk made has trend? adjustments think first bit think apparel about Canada, weather that in my you you of you question. to little the talked really but think in first help drivers, And the U.S., when first the you The a pricing I impacts the weather of business to far? just that's even

Mark Walsh

thanks. Bob,

really we trends that it set and We not our value. We of with our items. to start then a looked tests, set gaps fourth that reaffirms have Jubran impact discount strong price material to the Village Value to not And talked competitors. X pass and But and talk improvement. did sharpen price thrift, pricing I'll and results. about competitive gaps small AUR but frankly, on at seeing. of broader were with Look, off-price over was quarter we're price Savers So a all closely between and provides also that work the to we've pleased just we that relative great USD have lot the a I'll

looking we So, in respond equation will at in on solid both focused and there's pricing, for price But when category. both set there value in really geography consumer remain needed, countries. our dynamically a competitive

Jubran Tanious

this Jubran. Bob, is Yes.

or In needed well the year. rough backstock having selection for that. on of We that's winter have covered what we're terms a the pretty you, throughout

winter So, And start level, that's weather at at accumulate in warm weather backstocking store weather every the items. important we a the and that metric measure months important leading allows we seeing, exactly jackets we're demand the sweaters we maintain because for in want know the the the there the production while want proper very levels we the to to have, we months, say, very of based we're store, to season. That's ski on it that more that very cold us up we're to be out opportunistic if seeing. and what

good weather as that. very end in tell you, where we're I we months, here both countries sit on at we warm February, the are on as the And we're for well. of and backstocking season feel the in shape So, in that would we good about approaching

Operator

Lasser from Michael is from question next Your UBS.

Michael Lasser

you And to the expect you business positive in the not, business that comp to if Canadian to turn first quarter? expect would Do positive when comps?

Michael Maher

is date overall growth. improvement, QX, for somewhere if think an I a U.S. XXXX to I continuing modest with the results that a little and recovery guide of about which low you in QX. specifically I QX range Michael, with growth. Yes, it's to mid-single-digit at our sales given and downside consistent to year upside a look the are want decline total Canada, we outperform some outlook we would -- driving to said looks think don't that case that that like modest our to just low scenario to we've for what single-digit bit given say guidance the the

but been how bit and has year. in that's of earlier, That more mentioned favorable progressed, in was both was by It last U.S. momentum the in year. far Mark coming quarter. flipped we the some pattern January a did it to January see continued comparisons tough As February last little as year. think helped I Canada. out That weather the fourth weather severe this

So, for a uncommon outlook our you growth. that's But with quarter-to-date, muddied bit, and step of just at back low look that the single-digit discussed revenue waters if the we've QX. not basically through today, total consistent results

Michael Lasser

comps to question, do clarify, another right? you you I positive Is Michael, think And XQ. do to that -- response in just expect in

Michael Maher

Yes.

Michael Lasser

symmetrically this think the arc year. you million that of full drag where profitability up And does maturity EBITDA to you. ramp Should we even about impact stores have $XX years. from from in new few the next and as EBITDA Got and new of then XXXX, XXXX full the work over the get the to you maybe back they stores all as more a

Michael Maher

including that first least in you've are of are and such as got in slightly XXXX really is well. stores their smooth we're their of first are -- now first then XXXX is, years that such expenses that I portion And unprofitable to as large between add that, those that stores out. essentially all, XXXX That preopening year, to in said two year. late remarks, the this a dynamic, are which is we've said, starting Here at number for some prepared XX

as openings, year's by much I QX. So half we up largely as last bit a like loaded, back not little year, said, this caught

be that So, of XXXX will many that to as same their year, the third in that, was on XXXX. Add of entering some stores or their nearly won't XX impact XXXX even them them. second to those year largely, be XXXX

now, of stores a benefit we're that. the We've their -- of now to fill until meaningful tailwind not starting have yet first aren't And in when not the had five years so, that we provide we pipeline had. up

as also the the not So, see year the but to only reach line. this of we'll top the we inflection, second line benefit bottom

Operator

Your next Jefferies. question from Gallagher is from Carlos

Carlos Gallagher

On Randy here at for Konik Jefferies.

on the just pressures more you is guess up as Or or macro? that be following a of capturing want would forward Just Canada you more difficult here. Would I persist. there be beneficiary to of result Savers a if going expect benefit unpack if pressured consumer dynamics a should say Canadian trade-down I there and a to

Mark Walsh

in of of got XX%-plus. as of One, terms previous -- Look, great -- question. retail Canada. the we've calls, things. for in We're discussed you at awareness brand in think we've Thank fabric the a I part couple

on answered trade income which cohort we're down, trade sidelines. in cohorts. increases the we disappeared but being simply discount trade and they're has pressure last trading in due on Our meaningful seeing last that and of as Canadian question consumer really not down. they're lower the down quarter, power in income to against customer -- purchasing competitors. of pressure price And income that's been in did may And on our be benefit We A making year just -- not focused I Bob's the price base. and on that from sure food the our offset sharp, higher work costs. They're off-price seeing by we fuel, has the continued at percent as those earlier value sharp. base sizable is customer portion those base, And around the the below And Canadian a is is unfortunately, households or we're line. from gaps, the housing enormous. thrift, mentioned our the property just is is a gains household Ten

good what when a up about cohorts, frequency, from at low perspective, is base. is data we're seeing in building customer feel combined double our attrition, shopper base you the we again digits Loyalty customer with rates Canada. that So, across look we're

have base simply the So, that of solid, stability sidelines. cohort but on a is income lower who's do we the

the top the gets that get able up and filling the be a the the ends. we'll on we're think to funnel healthier, we is bottom So, once And it both at little funnel of sidelines. of

Operator

Capital. Your next Loop question Anthony from Chukumba from is

Anthony Chukumba

significantly in new you Canada do How down long-term to XXXX. planning the about openings store you're So, in you in slow mentioned store Canada? think of that sort target

Jubran Tanious

Anthony, question, in. with this the no big jump U.S. space can white is have I is the Jubran. and all that answer it's we the guys that can But opportunity. growth our of

term pretty be that is long think that Canada. put in Canada, a question going saturation expansive answer the in know I what we think always be so, like opportunistic does for looking do where successful. to look we we'll in our we're look, market But can deals that I to And parts your us of about

will we every to excited to and opportunistic the well. is But in those we of infill prospect about at. major tier to really starting deals, I going including that. mean market, pretty those we're are markets always the prospecting virtually the be And and comes that so, in the are things we're it new that Southern the be strategic in Mark we locations stores Southeast, coming growth I mean had in spaces U.S., markets, white as question, some not past. talked looking down from in relocations, and no about

So, pretty exciting.

Anthony Chukumba

And a of few sort mentioned Got quick as you of just And macroeconomic follow-up. then it. Canadian a KPIs. sort

those Would lowering consumer like on what's mentioned KPIs a we if three in that high to we very rates, of up. consumer? at at tracking a of should confidence main declining, interest Bank say to maybe be America are looking level the get You unemployment for going gauge try sort you want the picking or Canadian

Michael Maher

mean Yes, Anthony, obviously, want be Michael. and is there. not to state business the relevant think, economists economy pretend I don't is of certainly our regard. that material in to and the are I Canadian But this experts we to

think in transportation think pressure or particularly And spending categories; that last I to we it's the so. inflation. obviously really when put is, food, nondiscretionary in who core things, year housing, those about consumer you has look our over at their discretionary inflation on addition

a in for in was major business I pressure that driver think so, our And Canadian XXXX. the

Operator

proceed are with Please no at There Instructions.) remarks. further closing questions (Operator time. this

Michael Maher

again. We look next quarter. forward end first the our call Thanks the to of at

Operator

and conference that call thank disconnect for gentlemen, for concludes today. lines. you participating Ladies your you your ask and We this please

Savers Value Village (SVV) 20 Feb 252024 Q4 Earnings call transcript