Savers Value Village's Q4 2024: Unpacking Contradictions in Canadian Strategy, Pricing, and Consumer Trends

These are the key contradictions discussed in Savers Value Village's latest 2024 Q4 earnings call, specifically including: Canadian business performance and strategy, pricing strategy, Canadian business recovery expectations, and new store profitability expectations:



U.S. Business Performance:
- U.S. business reported double-digit total revenue growth driven by accelerating new store growth and strong comparable store sales growth.
- The growth was supported by increased transactions and average basket size.

Canadian Market Challenges and Recovery Efforts:
- Canadian net sales declined 2.7%, reflecting a weaker Canadian dollar, although constant currency net sales increased 6%.
- The improvement was due to sharp value focus and freshness efforts, leading to a 500 basis point sequential improvement in Canadian comp.

New Store Growth and Economic Impact:
- The company plans to open 25 to 30 new stores in 2025, contributing to increased sales but presenting a short-term headwind to adjusted EBITDA.
- Each new store typically opens with $3 million in sales but will become profitable by the second year, impacting long-term growth.

Financial Outlook and Exchange Rate Impact:
- The company's adjusted EBITDA is anticipated to be $245 to $265 million in 2025, impacted by $10 million due to new store investments and $6.5 million from a weaker Canadian dollar.
- This outlook reflects continued momentum despite macroeconomic constraints and new store openings.