ThZeal - The Zeal

svv-20250628

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 10-Q

____________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2025


¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number 001-41733

____________________________

Savers Value Village, Inc.

(Exact name of registrant as specified in its charter)

____________________________


Delaware			83-4165683
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

11400 S.E. 6th Street
Suite 125, Bellevue, WA			98004
(Address of Principal Executive Offices)			(Zip Code)

____________________________

425-462-1515

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.000001 per share	SVV	The New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The registrant had outstanding 155,555,984 shares of common stock as of July 28, 2025.

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		Page
Special Note Regarding Forward-Looking Statements		3
Part I - Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Condensed Consolidated Statements of Operations and Comprehensive Income	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	40
Part II - Other Information
Item 1.	Legal Matters	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
Signatures		45

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Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q 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” or the negative of these terms or other comparable terminology. In particular, statements about the markets in which we operate, including competition, growth and trends in our markets and industry; our strategies, outcomes and prospects; our expectations, beliefs, plans, objectives, assumptions; and future events or performance made in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements.

Forward-looking statements are based on our 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:

•the impact on both the supply and demand for our products caused by general economic conditions, such as the macroeconomic pressures in Canada and/or the U.S., and changes in consumer confidence and spending;

•our 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 our status as a “brick and mortar” only retailer and our lack of operations in the growing online retail marketplace;

•our failure to open new profitable stores or successfully enter new markets on a timely basis or at all;

•risks associated with conducting business internationally, including challenges related to serving customers that are international manufacturers and suppliers, such as transportation and shipping challenges, regulatory risks in foreign jurisdictions (particularly in Canada, where we maintain extensive operations) and exchange rate risks, which we may not choose to fully hedge;

•the loss of, or disruption or interruption in the operations of, our centralized processing centers and other offsite processing locations;

•risks associated with litigation, the expense of defense, and the potential for adverse outcomes;

•our 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 our computer networks and other electronic systems, including e-mail;

•changes in government regulations, procedures and requirements;

•our 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; and

•other factors set forth under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 21, 2025.

These risks are not exhaustive. Other sections of this Quarterly Report on Form 10-Q include additional factors that could adversely affect our business and financial performance.

Any forward-looking statement made by us in this Quarterly Report on Form 10-Q 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 our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We are not under any obligation (and we specifically disclaim 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.

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Part I - Financial Information

Item 1. Condensed Consolidated Financial Statements (Unaudited)

SAVERS VALUE VILLAGE, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(All amounts in thousands, except per share amounts, unaudited)


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Net sales	$	417,208	$	386,663	$	787,353	$	740,835
Operating expenses:
Cost of merchandise sold, exclusive of depreciation and amortization	186,878		162,626		355,381		320,790
Salaries, wages and benefits	86,993		90,955		171,795		174,652
Selling, general and administrative	88,412		83,486		175,491		161,229
Depreciation and amortization	20,904		17,380		40,262		35,681
Total operating expenses	383,187		354,447		742,929		692,352
Operating income	34,021		32,216		44,424		48,483
Other expense (income):
Interest expense, net	15,985		15,767		30,799		31,843
(Gain) loss on foreign currency, net	(8,611)		940		(10,242)		1,896
Other expense (income), net	37		(496)		203		(390)
Loss on extinguishment of debt	—		—		2,718		4,088
Other expense, net	7,411		16,211		23,478		37,437
Income before income taxes	26,610		16,005		20,946		11,046
Income tax expense	7,693		6,293		6,752		1,801
Net income	18,917		9,712		14,194		9,245
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	4,209		(681)		4,841		(2,574)
Cash flow hedges	(1,796)		(2,515)		(4,432)		(3,340)
Other comprehensive income (loss)	2,413		(3,196)		409		(5,914)
Comprehensive income	$	21,330	$	6,516	$	14,603	$	3,331
Net income per share, basic	$	0.12	$	0.06	$	0.09	$	0.06
Net income per share, diluted	$	0.12	$	0.06	$	0.09	$	0.06
Basic weighted average shares outstanding	156,464		161,788		157,524		161,518
Diluted weighted average shares outstanding	162,393		168,010		163,297		168,020

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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SAVERS VALUE VILLAGE, INC.

Condensed Consolidated Balance Sheets

(All amounts in thousands, except per share amounts, unaudited)


	June 28, 2025		December 28, 2024
Current assets:
Cash and cash equivalents	$	70,550	$	149,967
Trade receivables, net	19,205		16,761
Inventories	42,850		34,288
Prepaid expenses and other current assets	38,054		24,634
Derivative assets – current	24		4,574
Total current assets	170,683		230,224
Property and equipment, net	309,082		270,123
Right-of-use lease assets	609,440		552,762
Goodwill	678,895		665,465
Intangible assets, net	155,758		159,330
Deferred tax assets, net	9,377		3,801
Other assets	5,886		3,790
Total assets	$	1,939,121	$	1,885,495
Current liabilities:
Accounts payable and accrued liabilities	$	90,783	$	83,039
Accrued payroll and related taxes	61,349		52,252
Lease liabilities – current	96,573		89,809
Current portion of long-term debt	—		6,000
Total current liabilities	248,705		231,100
Long-term debt, net	700,526		735,133
Lease liabilities – non-current	529,624		472,343
Other liabilities	36,792		25,239
Total liabilities	1,515,647		1,463,815
Commitments and contingencies (see Note 11)
Stockholders’ equity:
Preferred stock, $0.000001 par value, 100,000 shares authorized; zero shares issued and outstanding	—		—
Common stock, $0.000001 par value, 800,000 shares authorized; 155,397 and 159,164 shares issued and outstanding	—		—
Additional paid-in capital	680,808		657,906
Accumulated deficit	(271,968)		(250,451)
Accumulated other comprehensive income	14,634		14,225
Total stockholders’ equity	423,474		421,680
Total liabilities and stockholders’ equity	$	1,939,121	$	1,885,495

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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SAVERS VALUE VILLAGE, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(All amounts in thousands, unaudited)


	Thirteen Weeks Ended
	Common Stock			Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance at March 29, 2025	157,857	$	—	$	668,667	$	(267,075)	$	12,221	$	413,813
Stock-based compensation	—	—		11,805		—		—		11,805
Stock issued under stock incentive plans, net	237	—		336		—		—		336
Repurchase of common stock	(2,697)	—		—		(23,810)		—		(23,810)
Comprehensive income	—	—		—		18,917		2,413		21,330
Balance at June 28, 2025	155,397	$	—	$	680,808	$	(271,968)	$	14,634	$	423,474

Balance at March 30, 2024	161,728	$	—	$	615,196	$	(248,008)	$	27,769	$	394,957
Stock-based compensation	—	—		21,650		—		—		21,650
Stock issued under stock incentive plans, net	262	—		(352)		—		—		(352)
Repurchase of common stock	(288)	—		—		(3,316)		—		(3,316)
Comprehensive income (loss)	—	—		—		9,712		(3,196)		6,516
Balance at June 29, 2024	161,702	$	—	$	636,494	$	(241,612)	$	24,573	$	419,455

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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SAVERS VALUE VILLAGE, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(All amounts in thousands, unaudited)


	Twenty-Six Weeks Ended
	Common Stock			Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance at December 28, 2024	159,164	$	—	$	657,906	$	(250,451)	$	14,225	$	421,680
Stock-based compensation	—	—		22,682		—		—		22,682
Stock issued under stock incentive plans, net	325	—		220		—		—		220
Repurchase of common stock	(4,092)	—		—		(35,711)		—		(35,711)
Comprehensive income	—	—		—		14,194		409		14,603
Balance at June 28, 2025	155,397	$	—	$	680,808	$	(271,968)	$	14,634	$	423,474

Balance at December 30, 2023	160,453	$	—	$	593,109	$	(247,541)	$	30,487	$	376,055
Stock-based compensation	—	—		40,779		—		—		40,779
Stock issued under stock incentive plans, net	1,537	—		2,606		—		—		2,606
Repurchase of common stock	(288)	—		—		(3,316)		—		(3,316)
Comprehensive income (loss)	—	—		—		9,245		(5,914)		3,331
Balance at June 29, 2024	161,702	$	—	$	636,494	$	(241,612)	$	24,573	$	419,455

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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SAVERS VALUE VILLAGE, INC.

Condensed Consolidated Statements of Cash Flows

(All amounts in thousands, unaudited)


	Twenty-Six Weeks Ended
	June 28, 2025		June 29, 2024
Cash flows from operating activities:
Net income	$	14,194	$	9,245
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	23,965		40,779
Amortization of debt issuance costs and debt discount	2,826		2,755
Depreciation and amortization	40,262		35,681
Operating lease expense	69,427		63,593
Deferred income taxes, net	(5,416)		(20,631)
Loss on extinguishment of debt	2,718		4,088
Other items	(15,923)		(3,931)
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables	(2,144)		(1,838)
Inventories	(7,717)		(4,315)
Prepaid expenses and other assets	(13,172)		(12,270)
Accounts payable and accrued liabilities	(2,449)		14,197
Accrued payroll and related taxes	6,447		(14,658)
Operating lease liabilities	(62,247)		(59,981)
Other liabilities	4,094		1,852
Net cash provided by operating activities	54,865		54,566
Cash flows from investing activities:
Purchases of property and equipment	(53,145)		(53,284)
Business acquisition, net of cash acquired	—		(2,856)
Settlement of derivative instruments, net	1,838		28,136

Purchase of marketable securities	(2,864)		—
Proceeds from sale of marketable securities	292		—
Net cash used in investing activities	(53,879)		(28,004)
Cash flows from financing activities:

Principal payments on long-term debt	(44,500)		(52,500)
Payment of debt issuance costs	—		(1,004)
Prepayment premium on extinguishment of debt	(1,335)		(1,485)


Proceeds from stock option exercises	411		3,139

Repurchase of common stock	(35,646)		(2,866)
Shares withheld for taxes	(191)		(40)
Settlement of derivative instrument, net	—		11,925
Principal payments on finance lease liabilities	(1,672)		(705)

Net cash used in financing activities	(82,933)		(43,536)
Effect of exchange rate changes on cash and cash equivalents	2,530		(2,330)
Net change in cash and cash equivalents	(79,417)		(19,304)
Cash and cash equivalents at beginning of period	149,967		179,955
Cash and cash equivalents at end of period	$	70,550	$	160,651
Supplemental disclosures of cash flow information:
Interest paid on debt	$	34,483	$	39,385
Income taxes paid, net	$	27,859	$	21,233
Supplemental disclosure of noncash investing and financing activities:
Noncash capital expenditures	$	8,331	$	4,535
Repurchase of common stock not yet paid	$	332	$	450

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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SAVERS VALUE VILLAGE, INC.

Notes to Interim Condensed Consolidated Financial Statements (unaudited)

Note 1. Description of Business and Basis of Presentation

Description of business

Savers Value Village, Inc., a Washington State based company, together with its wholly owned subsidiaries (the “Company”, “we”, “us” or “our”), sells secondhand merchandise primarily in retail stores located in the United States (“U.S.”), Canada and Australia. Items that are unsuited for or unsold at retail stores are marketed to wholesale customers.

Basis of presentation

The accompanying interim condensed consolidated financial statements as of June 28, 2025 and for the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024, have not been audited but, in the opinion of management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial statements. The Condensed Consolidated Balance Sheet at December 28, 2024, has been derived from the audited financial statements at that date but does not include all of the disclosures required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the fiscal year ended December 28, 2024, and related notes included in the most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 21, 2025. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year, which ends on the Saturday nearest to December 31.

All dollar and share amounts in the notes to these unaudited interim condensed consolidated financial statements, with the exception of per share amounts, are rounded to the nearest thousand unless otherwise indicated.

Secondary offering

On May 16, 2025, certain funds, investment vehicles or accounts managed or advised by the Private Equity Group of Ares Management Corporation (“Ares”) and Mark Walsh, the chief executive officer of the Company (collectively, the “Selling Stockholders”), sold 17.3 million shares, including approximately 2.3 million shares pursuant to the exercise of the underwriters’ over-allotment option (the “Offering”). The Company did not receive any proceeds from sales made by the Selling Stockholders but incurred approximately $1.2 million in costs associated with the Offering, which were recorded within selling, general and administrative in the unaudited interim Condensed Consolidated Statement of Operations and Comprehensive Income for the thirteen and twenty-six weeks ended June 28, 2025.

In connection with the Offering, the Company purchased from the underwriters approximately 2.3 million shares of common stock at a total cost of approximately $20.0 million, excluding excise tax, at a price per share equal to the price per share paid by the underwriters to the Selling Stockholders (the “Concurrent Share Repurchase”). The underwriters did not receive any compensation for the shares repurchased by the Company. See Note 9. Share Repurchases for further details.

As of June 28, 2025, Ares owned approximately 75.6% of the Company’s outstanding common stock.

Note 2. Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies as described in the Company’s consolidated financial statements as of and for the fiscal year ended December 28, 2024.

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Use of estimates

The preparation of these unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. These estimates are based on available information and on various other assumptions that are believed to be reasonable under the circumstances. Certain items subject to such estimates and assumptions include, but are not limited to, the valuation of insurance reserves, impairment assessments associated with our goodwill and indefinite-lived intangible assets, and income taxes. Actual results could vary from those estimates under different assumptions or conditions.

Revenue recognition

The following table disaggregates our revenue by retail and wholesale for the periods presented:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Retail sales	$	396,430	$	367,922	$	747,189	$	704,717
Wholesale sales	20,778		18,741		40,164		36,118
Total net sales	$	417,208	$	386,663	$	787,353	$	740,835

Recently issued accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require that public business entities on an annual basis disclose specific categories in the rate reconciliation table, provide additional information for reconciling items that meet a quantitative threshold and provide additional information about income taxes paid. The amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. This guidance is expected to impact the Company’s disclosures only with no impact to its results of operations, financial position or cash flows.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update require public entities to disclose, on an annual and interim basis, specific expenses included in each relevant expense caption on the income statement. The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. This guidance is expected to impact the Company’s disclosures only with no impact to its results of operations, financial position or cash flows.

Note 3. 2 Peaches Acquisition

On May 6, 2024, the Company acquired all of the equity of 2 Peaches Group, LLC (“2 Peaches”) for $5.4 million, which was comprised of cash consideration of $3.5 million, including a holdback of $0.5 million, and acquisition-related contingent consideration with an initial fair value of $1.9 million (the “2 Peaches Acquisition”). 2 Peaches is 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.

The acquisition-related contingent consideration arrangement with an initial fair value of $1.9 million requires us to make a future cash payment of up to $2.7 million upon achievement of specific milestones; the associated liability is classified in other liabilities in the unaudited interim Condensed Consolidated Balance Sheets. See Note 5. Fair Value Measurements for information on the fair value of the acquisition-related contingent consideration.

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Note 4. Debt

Long-term debt consisted of the following:


(in thousands)	June 28, 2025		December 28, 2024
Senior Secured Notes	$	401,000	$	445,500
Term Loan Facility	315,756		315,756

Total face value of debt	716,756		761,256
Less: current portion of long-term debt	—		6,000
Less: unamortized debt issuance costs and debt discount	16,230		20,123
Long-term debt, net	$	700,526	$	735,133

On February 6, 2025, the Company redeemed $44.5 million aggregate principal amount of the Senior Secured Notes, equal to 10% of the outstanding balance at December 28, 2024. In addition to paying accrued interest, the Company paid a premium of 3%, or $1.3 million, on the partial redemption. This transaction resulted in a loss on extinguishment of debt of $2.7 million.

As of June 28, 2025, there were no advances on the Revolving Credit Facility, there were $0.9 million of letters of credit outstanding and $124.1 million was available to borrow.

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Note 5. Fair Value Measurements

The Company utilizes fair value measurements for its financial assets and financial liabilities and fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is based upon a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

•Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•Level 2 inputs are inputs other than unadjusted quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

•Level 3 inputs are unobservable inputs for the asset or liability.

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement.

Recurring fair value measurements

The following table presents financial assets and financial liabilities that are measured at fair value on a recurring basis at June 28, 2025:


	Fair Value Hierarchy
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	3,172	$	—	$	—	$	3,172


Marketable securities (1)	2,665		—		—		2,665
Forward contracts	—		24		—		24
Total	$	5,837	$	24	$	—	$	5,861
Liabilities:

Forward contracts	$	—	$	1,881	$	—	$	1,881
Acquisition-related contingent consideration	—		—		788		788
Total	$	—	$	1,881	$	788	$	2,669

(1)Represents investments held in a rabbi trust associated with the Company’s deferred compensation plan which is included in “Prepaid expenses and other current assets” and “Other assets” in the accompanying unaudited interim Condensed Consolidated Balance Sheets.

The following table presents financial assets and financial liabilities that are measured at fair value on a recurring basis at December 28, 2024:


	Fair Value Hierarchy
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	57,000	$	—	$	—	$	57,000
Forward contracts	—		4,574		—		4,574
Total	$	57,000	$	4,574	$	—	$	61,574
Liabilities:
Acquisition-related contingent consideration	$	—	$	—	$	2,000	$	2,000

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Money market funds, consisting of short-term deposits with an original maturity of three months or less, are valued based on quoted market prices of identical assets and are classified within Level 1. Marketable securities are deferred compensation investments measured at fair value using unadjusted quoted market prices available from national securities exchanges and are classified within Level 1.

Forward contracts are fair valued using independent valuation services, and the valuations are based on observable market data. As such, the forward contracts are classified within Level 2. The Company reviews the independent valuation and obtains an understanding of the methods used in pricing the instruments.

The fair value of the acquisition-related contingent consideration liability is measured using the probability-weighted present value of the potential payment. The probability-weighted present value of the potential payment is based on significant unobservable inputs, including management estimates and assumptions. Accordingly, the fair value of acquisition-related contingent consideration has been classified within Level 3.

The following table provides quantitative information regarding Level 3 inputs used in the fair value measurement of the acquisition-related contingent consideration liability as of June 28, 2025:

Acquisition-Related Contingent Consideration Liability

Valuation Technique

Unobservable Inputs

Range

Potential payment

Probability-weighted present value

Probability of payment

0% - 100%

Discount rate

9.6%

Projected years of payments

2026 - 2027

The following table provides a reconciliation of the acquisition-related contingent consideration liability measured at fair value using Level 3 significant unobservable inputs:


(in thousands)
Balance at December 28, 2024	$	2,000
Change in fair value recorded in selling, general and administrative	(326)
Balance at March 29, 2025	1,674
Change in fair value recorded in selling, general and administrative	(886)
Balance at June 28, 2025	$	788

Other fair value disclosures

The fair value of the Company’s Senior Secured Notes, based on Level 1 inputs, was $421.0 million and $467.6 million at June 28, 2025 and December 28, 2024, respectively. The fair value of borrowings under the Company’s Senior Secured Credit Facilities approximate their carrying value as the current rates approximate rates on similar debt and were based on rate notices provided by the Administrative Agent (Level 2 inputs) at June 28, 2025 and December 28, 2024.

Note 6. Derivative Financial Instruments

As a result of its operating and financing activities, the Company is exposed to market risks from changes in foreign currency exchange rates and interest rates. These market risks may adversely affect the Company’s operating results, cash flows and financial position. The Company seeks to manage risk from changes in foreign currency exchange rates through the use of forward contracts or cross currency swaps or both, and from time to time, may use interest rate swaps to manage the risk of changes in interest rates. The Company’s forward contracts are not collateralized and are entered into with large, reputable financial institutions that are monitored for counterparty risk. Refer to Note 5. Fair Value Measurements for information on the fair value of our derivative financial instruments.

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Foreign currency contracts

The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. The Company uses forward contracts to manage its exposure to fluctuations in the U.S. dollar (“USD”) – Canadian dollar (“CAD”) and may also use cross currency swaps for the same reason. Forward contracts lock in the exchange rate for a portion of the estimated cash flows of the Company’s Canadian operations. As of June 28, 2025 and December 28, 2024, the Company’s forward contracts had USD equivalent notional amounts of $105.4 million and $102.5 million, respectively. In April 2024, the Company terminated its cross currency swaps, resulting in net proceeds of $28.1 million. These cross currency swaps were not designated in hedging relationships.

Interest rate swap contracts

The Company’s market risk is affected by changes in interest rates. The Company’s Senior Secured Credit Facilities bear interest based on market rates plus an applicable margin. Because the interest rate on the Company’s floating-rate debt is tied to market rates, the Company may from time to time manage its exposure to interest rate movements by effectively converting a portion of its floating-rate debt to fixed-rate debt using interest rate swaps. Interest rate swaps, as used by the Company, involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreement without exchange of the underlying notional amount. The Company previously entered into two interest rate swaps that were designated as cash flow hedges. In April 2024, the Company terminated its interest rate swaps, resulting in net proceeds of $10.3 million. All amounts deferred into accumulated other comprehensive income prior to termination have been amortized to interest expense, net through May 2025, being the original maturity date of the interest rate swaps.

The fair value of forward contracts were as follows:


(in thousands)	Balance Sheet Location	June 28, 2025		December 28, 2024
Forward contracts not designated as hedging instruments	Derivative asset – current	$	24	$	4,574

Forward contracts not designated as hedging instruments	Accounts payable and accrued liabilities	$	1,881	$	—

The impact of derivative financial instruments on the unaudited interim Condensed Consolidated Statements of Operations and Comprehensive Income was as follows:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Loss (gain) on forward contracts recognized in (gain) loss on foreign currency, net	$	4,248	$	(189)	$	4,593	$	(460)
Gain on cross currency swaps recognized in (gain) loss on foreign currency, net	$	—	$	(2,033)	$	—	$	(7,647)
Gain on interest rate swaps recognized in interest expense, net	$	(1,796)	$	(2,680)	$	(4,432)	$	(5,704)

The table below presents the effect of cash flow hedge accounting on other comprehensive income (loss), net of tax:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Gain recognized in other comprehensive income (loss)	$	—	$	165	$	—	$	2,364
Gain reclassified from accumulated other comprehensive income into net income	$	1,796	$	2,680	$	4,432	$	5,704

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As of May 2025, the entirety of the deferred gain recognized within accumulated other comprehensive income from the interest rate swap had been reclassified as a decrease in interest expense, net. As of December 28, 2024, the Company’s total deferred gain in accumulated other comprehensive income in the unaudited interim Condensed Consolidated Balance Sheets was $4.4 million. Amounts reclassified from accumulated other comprehensive income into net income are recognized in interest expense, net in the unaudited interim Condensed Consolidated Statements of Operations and Comprehensive Income.

Note 7. Segments

The Company’s Chief Executive Officer, who is the chief operating decision maker (“CODM”), assesses segment performance and makes resource allocation decisions based on the geographies in which it conducts its retail operations, and separately for its wholesale operations, each of which represents an operating segment. For disclosure purposes, U.S. Retail and Canada Retail were determined to be reportable segments. Neither the Company’s retail operations in Australia nor its wholesale operations meet the quantitative thresholds to be reported separately and since they do not share similar economic characteristics, they have been combined and disclosed within Other Profit. We do not separately present assets for our reportable segments because the Company’s CODM is not provided these amounts.

General corporate expenses include unallocated corporate overhead recorded in salaries, wages and benefits, and selling, general and administrative in the unaudited interim Condensed Consolidated Statements of Operations and Comprehensive Income.

Beginning in the first quarter of fiscal 2025, the Company revised its calculation of segment profit to include, among other things, lease expense as recognized under Topic 842, consistent with the information provided to the CODM. Previously, segment profit included cash-basis rent. Prior period amounts have been recast to reflect this change, resulting in a decrease in segment profit of $3.8 million for the U.S. Retail segment and an increase of $0.1 million for the Canada Retail segment for the thirteen weeks ended June 29, 2024. For the twenty-six weeks ended June 29, 2024, the recast resulted in a decrease in segment profit of $5.0 million for the U.S. Retail segment and a decrease of $0.7 million for the Canada Retail segment.

Segment profit may not be comparable to similarly titled measures used by other entities. These measures should not be considered as alternatives to our GAAP measures of operating income, net income or cash flows from operating activities as an indicator of the Company’s performance or as a measure of its liquidity.

Our segment results are presented in the tables below. In each table, “Other profit” is attributable to the Australia Retail and Wholesale operating segments which have been combined.

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	Thirteen Weeks Ended June 28, 2025
(in thousands)	U.S. Retail		Canada Retail		Total
Segment sales	$	228,833	$	154,956	$	383,789
Segment expenses:
Cost of merchandise sold, exclusive of depreciation and amortization	104,090		66,400		170,490
Salaries, wages and benefits	32,396		19,203		51,599
Selling, general and administrative	43,834		29,878		73,712
Total segment expenses	180,320		115,481		295,801
Segment profit	$	48,513	$	39,475	87,988

Reconciliation of profit
Other profit					8,689
General corporate expenses					41,752
Depreciation and amortization					20,904
Operating income					34,021
Interest expense, net					15,985
Gain on foreign currency, net					(8,611)
Other expense, net					37

Income before income taxes					$	26,610


	Thirteen Weeks Ended June 29, 2024
(in thousands)	U.S. Retail		Canada Retail		Total
Segment sales	$	207,068	$	149,836	$	356,904
Segment expenses:
Cost of merchandise sold, exclusive of depreciation and amortization	90,562		57,889		148,451
Salaries, wages and benefits	28,874		18,445		47,319
Selling, general and administrative	39,574		29,424		68,998
Total segment expenses	159,010		105,758		264,768
Segment profit	$	48,058	$	44,078	92,136

Reconciliation of profit
Other profit					8,423
General corporate expenses					50,963
Depreciation and amortization					17,380
Operating income					32,216
Interest expense, net					15,767
Loss on foreign currency, net					940
Other income, net					(496)

Income before income taxes					$	16,005

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	Twenty-Six Weeks Ended June 28, 2025
(in thousands)	U.S. Retail		Canada Retail		Total
Segment sales	$	439,598	$	283,591	$	723,189
Segment expenses:
Cost of merchandise sold, exclusive of depreciation and amortization	201,923		122,518		324,441
Salaries, wages and benefits	64,140		36,572		100,712
Selling, general and administrative	86,024		59,710		145,734
Total segment expenses	352,087		218,800		570,887
Segment profit	$	87,511	$	64,791	152,302

Reconciliation of profit
Other profit					17,379
General corporate expenses					84,995
Depreciation and amortization					40,262
Operating income					44,424
Interest expense, net					30,799
Gain on foreign currency, net					(10,242)
Other expense, net					203
Loss on extinguishment of debt					2,718
Income before income taxes					$	20,946


	Twenty-Six Weeks Ended June 29, 2024
(in thousands)	U.S. Retail		Canada Retail		Total
Segment sales	$	399,648	$	283,955	$	683,603
Segment expenses:
Cost of merchandise sold, exclusive of depreciation and amortization	178,634		115,718		294,352
Salaries, wages and benefits	56,902		34,473		91,375
Selling, general and administrative	75,433		54,973		130,406
Total segment expenses	310,969		205,164		516,133
Segment profit	$	88,679	$	78,791	167,470

Reconciliation of profit
Other profit					17,079
General corporate expenses					100,385
Depreciation and amortization					35,681
Operating income					48,483
Interest expense, net					31,843
Loss on foreign currency, net					1,896
Other income, net					(390)
Loss on extinguishment of debt					4,088
Income before income taxes					$	11,046

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Note 8. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average number of shares outstanding during the period. Diluted net income per share gives effect to all potentially dilutive common equivalent shares outstanding for the period under the treasury stock method.

Basic and diluted net income per share were as follows:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(in thousands, except per share data)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Numerator
Net income	$	18,917	$	9,712	$	14,194	$	9,245
Denominator
Basic weighted average shares outstanding	156,464		161,788		157,524		161,518
Dilutive effect of employee stock options and awards	5,929		6,222		5,773		6,502
Diluted weighted average shares outstanding (1)	162,393		168,010		163,297		168,020
Net income per share
Basic	$	0.12	$	0.06	$	0.09	$	0.06
Diluted	$	0.12	$	0.06	$	0.09	$	0.06

(1)For the thirteen and twenty-six weeks ended June 28, 2025, the calculation of diluted net income per share excludes the effect of 8.2 million and 7.6 million, respectively, of potential shares of common stock relating to awards of stock options and restricted stock units that, if exercised or vested, would have been antidilutive. For the thirteen and twenty-six weeks ended June 29, 2024, the calculation of diluted net income per share excludes the effect of 3.5 million and 2.4 million, respectively, of potential shares of common stock relating to awards of stock options and restricted stock units that, if exercised or vested, would have been antidilutive.

Note 9. Share Repurchases

Concurrent share repurchase

As part of the Offering, the Company purchased from the underwriters approximately 2.3 million shares of common stock at a price per share of $8.86 and a total cost of approximately $20.0 million, excluding excise tax. The Company funded the Concurrent Share Repurchase from its existing cash on hand and it was not part of its existing share repurchase program authorized in November 2023.

Share repurchase authorization

In November 2023, the Company authorized a share repurchase program of up to $50.0 million of the Company’s common stock. The share repurchase program does not obligate us to purchase any minimum number of shares, and the program may be suspended, modified, or discontinued at any time without prior notice. The timing, actual number and value of any additional shares purchased will depend on a variety of factors, including, but not limited to, the market price of the Company’s common stock, general business and market conditions, other investment opportunities, and applicable regulatory requirements.

During the thirteen and twenty-six weeks ended June 28, 2025, the Company repurchased 0.4 million and 1.8 million shares, respectively, at a weighted average price of $8.17 and $8.37, respectively, and a total cost of $3.6 million and $15.3 million, respectively, excluding commissions and excise tax. During the thirteen and twenty-six weeks ended June 29, 2024, the Company repurchased 0.3 million shares at a weighted average price of $11.51 and a total cost of approximately $3.3 million, excluding commissions and excise tax. As of June 28, 2025, the Company had $2.8 million remaining under the share repurchase program.

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Note 10. Income Taxes

The income tax provision for interim periods is generally determined using an estimate of the Company’s annual effective tax rate adjusted for discrete items. Each quarter the estimate of the annual effective tax rate is updated, and if the Company’s estimated tax rate changes, a cumulative adjustment is made.

The effective tax rate for the thirteen weeks ended June 28, 2025 and June 29, 2024 was 28.9% and 39.3%, respectively. The effective tax rate for the twenty-six weeks ended June 28, 2025 and June 29, 2024 was 32.2% and 16.3%, respectively. The effective tax rates differed from the federal statutory rate primarily due to stock-based compensation and Internal Revenue Code Section 162(m) excess compensation.

In the normal course of business, the Company is required to make estimated tax payments throughout the year based on the expected tax liability for the full year. This typically results in a prepaid balance during the first half of the year, as the Company earns most of its profit in the second half of the year. As of June 28, 2025, the Company had a $15.7 million balance in prepaid income taxes, which is classified in prepaid expenses and other current assets in the unaudited interim Condensed Consolidated Balance Sheets.

The Organization for Economic Cooperation and Development (“OECD”) proposed model rules to ensure a minimal level of taxation (commonly referred to as Pillar II) and the European Union member states have agreed to implement Pillar II’s proposed global corporate minimum tax rate of 15%. We considered the applicable tax law changes from Pillar II implementation in the relevant countries in which we operate, and there is no material impact to our tax provision for the thirteen and twenty-six weeks ended June 28, 2025. We will continue to evaluate the impact of these tax law changes in future reporting periods.

On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (“OBBBA”), which encompasses a broad range of tax reform provisions affecting businesses, including extensions and modifications of certain provisions of the Tax Cuts & Jobs Act (“TCJA”). The OBBBA also makes some key elements of the TCJA permanent, including 100% bonus depreciation, domestic research cost expensing, and deductibility of business interest expense. Under GAAP, the effect of such tax legislation changes is required to be recognized in the period of enactment. As the OBBBA was signed into law after the Company’s current period-end date, the financial statements as of June 28, 2025 do not reflect the effects of the new tax legislation. However, we are currently evaluating the impact of the tax reform and the results of such evaluation will be recorded in our results of operations, financial position and cash flows in the reporting periods in which such provisions are effective.

Note 11. Commitments and Contingencies

Litigation and regulatory matters

The Company is involved from time to time in claims, proceedings and litigation arising in the ordinary course of business. The Company has made accruals with respect to these matters, where appropriate, which are reflected in the unaudited interim condensed consolidated financial statements. For some matters, the amount of liability is not probable or the amount cannot be reasonably estimated and therefore accruals have not been made. The Company may enter into discussions regarding settlement of these matters and may enter into settlement agreements, if in the best interest of the Company. From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company’s financial position.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of the financial condition and results of operations of Savers Value Village, Inc. in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q (the “Quarterly Report”) and our audited consolidated financial statements for the year ended December 28, 2024 and related notes included in our Annual Report on Form 10-K filed with the SEC on February 21, 2025 (our “Annual Report”).

Unless the context otherwise requires, all references in this section to “Savers Value Village”, “the Company”, “we”, “us” or “our” refer to the business of Savers Value Village, Inc. and its predecessor entities.

This discussion contains forward-looking statements that involve risks and uncertainties about our business and operations and reflect our plans, estimates and beliefs. Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A “Risk Factors” in our Annual Report or in other parts of this Quarterly Report.

Overview

We are the largest for-profit thrift operator in the United States (“U.S.”) and Canada based on number of stores and operate a total of 354 stores under the Savers®, Value Village®, Value Village Boutique™, Village des ValeursMD, Unique® and 2nd Ave.® banners. We are committed to redefining secondhand shopping by providing one-of-a-kind, low-priced merchandise ranging from quality clothing to home goods in an exciting treasure-hunt shopping environment. We purchase secondhand textiles (e.g., clothing, bedding and bath items), shoes, accessories, housewares, books and other goods from our non-profit partners (“NPPs”). We then process, select, price, merchandise and sell these items in our stores. Items that are unsuited for or unsold at retail stores are marketed to wholesale customers who reuse or repurpose the items they purchase from us. We believe our hyper-local and socially responsible procurement model, industry-leading and innovative operations, differentiated value proposition and deep relationships with our customers distinguish us from other secondhand and value-based retailers. Our business model is rooted in sustainability and contributing to the communities we serve, with a mission to positively impact our stakeholders: thrifters, NPPs and their donors, our team members and our stockholders. As a leader and pioneer of the for-profit thrift category, we seek to positively impact the environment by reducing waste and extending the life of reusable goods. The vast majority of the clothing and textiles we source is sold to our retail or wholesale customers.

We offer a dynamic, ever-changing selection of items, with an average unit retail price of approximately $5. Our most engaged customers are members of our Super Savers Club® loyalty program. As of June 28, 2025, we had over 6.0 million total active members enrolled in our U.S. and Canadian loyalty programs who have shopped with us within the last twelve months, compared to approximately 5.7 million total active members as of June 29, 2024. Active members drove 72.6% of retail sales during the twelve months ended June 28, 2025, compared to 71.5% during the twelve months ended June 29, 2024.

We have innovated and invested in the development of significant operational expertise in order to integrate the three highly complex parts of thrift operations—supply and processing, retail, and sales to wholesale markets. Our business model enables us to provide value to our NPPs and our customers, while driving attractive profitability and cash flow.

Our strategy is to locally source our merchandise by purchasing secondhand items donated to our NPPs, which provides them with revenue to support their community-focused missions. This also aids in creating a broad and diverse selection for our customers, fosters a sense of community, and reduces transportation costs and emissions typically associated with the production and distribution of new merchandise. While purchases made by our customers in our stores do not directly benefit any NPP, we pay a market-competitive contractual rate to purchase donated items.

We source our merchandise primarily through three distinct and strategic procurement models: (i) on-site donations (“OSDs”), (ii) GreenDrop locations and (iii) delivered supply. Increasing the proportion of OSDs and GreenDrop as a percentage of total supply is desirable as donations from these sources are usually of higher quality and collectively have a lower cost than product sourced through other channels. OSDs and GreenDrop are collectively the largest part of our supply mix, accounting for 78.5% of our total pounds processed for the thirteen weeks ended June 28, 2025, compared to 78.3% for the thirteen weeks ended June 29, 2024. OSDs and GreenDrop accounted for 76.3% of our total pounds processed for the twenty-six weeks ended June 28, 2025, compared to 75.2% for the twenty-six weeks ended June 29, 2024.

•OSDs: Donations of items by individuals to our NPPs, made at Community Donation Centers (“CDCs”) located at our stores. We operate as a registered professional fundraiser where required, accepting donations on behalf of our NPPs. Each store is specifically designated as an OSD location for a particular NPP, such that all donations received at the CDC are credited to that NPP.

•GreenDrop locations: Attended donation stations that collect donations of items made by individuals to our NPPs at convenient and well-signed brick and mortar and trailer locations in neighborhoods surrounding a store. On behalf of our NPPs, we solicit, collect and deliver items from our GreenDrop locations to our stores and Centralized Processing Centers (“CPCs”).

•Delivered supply: Delivered supply comprises donations delivered either to our CPCs or our stores, or both. These donations can be collected by our NPPs through a variety of methods such as neighborhood collections or donation drives, or we may solicit, collect and deliver the items on behalf of our NPPs.

We leverage an analytical platform to measure the sales yield and product margin of each stream of supply in our stores. In general, this tool is either used to periodically confirm the performance of an existing stream of supply or to evaluate the performance of a new source of supply.

Our business model is predicated on sourcing and selling quality secondhand items to our customers in local communities. We are able to meet customer demand given our deep relationships with an extensive network of NPPs that is unmatched in the thrift industry.

The majority of our retail stores have a dedicated space that handles the processing of soft and hard goods that provide the inventory to be sold on our retail sales floors. During the thirteen weeks ended June 28, 2025, we processed 279 million pounds of secondhand goods, compared to 254 million during the thirteen weeks ended June 29, 2024. During the twenty-six weeks ended June 28, 2025, we processed 541 million pounds of secondhand goods, compared to 492 million during the twenty-six weeks ended June 29, 2024. We are actively implementing our offsite processing strategy which allows us to process goods at larger-scale facilities and distribute goods to multiple stores in a local market. The processing of donations under this strategy can occur at offsite warehouse facilities, stores with surplus processing capacity or at CPCs.

Our store experience directly reflects our mission to make secondhand second nature. We deliver a well merchandised environment that maximizes customer engagement and supports a core tenet for any thrifter—the treasure hunt. Our stores offer a wide selection of quality items across clothing, home goods, books and other items at convenient locations. Our sales floor inventory is also regularly rotated and refreshed, providing our customers with an extensive, ever-changing selection at tremendous value.

In support of our efforts to extend the life of reusable goods and recover a portion of the cost of acquiring our supply of secondhand items, we sell the majority of textile items that are unsuited for or unsold at retail stores to our wholesale customers (predominantly comprised of textile graders and small business owners) who supply local communities across the globe with gently used, affordable items like clothing, housewares, toys and shoes. Textiles not suitable for reuse as secondhand clothing can be repurposed into other textile items (e.g., wiping rags) and post-consumer fibers (e.g., insulation, carpet padding), further reducing waste.

Business Highlights

The following highlights our financial results for the thirteen weeks ended June 28, 2025 (the “second quarter”). Comparisons are to the thirteen weeks ended June 29, 2024:

•Total Company net sales increased 7.9% to $417.2 million; constant-currency net sales increased 8.5%; and comparable store sales increased 4.6%.

•For the U.S., net sales increased 10.5% and comparable store sales increased 6.2%.

•For Canada, net sales increased 3.4%; constant-currency net sales increased 4.7%; and comparable store sales increased 2.6%.

•Opened 4 new stores, ending the second quarter with 354 stores.

•Net income was $18.9 million, or $0.12 per diluted share, and net income margin was 4.5%.

•Adjusted net income was $22.8 million, or $0.14 per diluted share.

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•Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $68.8 million and Adjusted EBITDA margin was 16.5%. Changes in foreign currency exchange rates negatively impacted Adjusted EBITDA by $0.4 million during the second quarter.

Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin, as well as amounts presented on a constant-currency basis, are not measures recognized under U.S. GAAP. For additional information on our use of non-GAAP financial measures and a reconciliation to the nearest GAAP measure, see “Non-GAAP Financial Measures” below.

Recent Developments

Macroeconomic conditions

There remains significant uncertainty in the current macroeconomic environment, driven by several factors, including global trade policies and tariffs. While the Company is not directly impacted by tariffs due to its hyper-local procurement model, in periods of perceived or actual unfavorable economic conditions, consumers may reallocate their discretionary spending, which may adversely impact demand for the Company’ products and its profitability.

Secondary offering

As part of the Offering, the Company purchased from the underwriters approximately 2.3 million shares of common stock at a price per share of $8.86 and a total cost of approximately $20.0 million, excluding excise tax. The Company funded the share repurchase from its existing cash on hand and it was not part of its existing share repurchase program authorized in November 2023.

As of June 28, 2025, Ares owned approximately 75.6% of the Company’s outstanding common stock.

Share repurchase authorization

During the thirteen and twenty-six weeks ended June 28, 2025 under its $50 million share repurchase program announced in November 2023, the Company repurchased 0.4 million and 1.8 million shares, respectively, at a weighted average price of $8.17 and $8.37, respectively, and a total cost of $3.6 million and $15.3 million, respectively, excluding commissions and excise tax. As of June 28, 2025, the Company had $2.8 million remaining under the share repurchase program.

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Key Performance Indicators

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

The following table summarizes our key performance indicators for the periods indicated:


	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	June 28, 2025			June 29, 2024			June 28, 2025			June 29, 2024
Comparable Store Sales (1)
U.S.	6.2		%	2.1		%	5.2		%	2.2		%
Canada	2.6		%	(3.1)		%	1.7		%	(2.9)		%
Total (2)	4.6		%	(0.1)		%	3.7		%	0.1		%
Number of Stores
U.S.	171			165			171			165
Canada	167			159			167			159
Total (2)	354			337			354			337
Other Metrics
Pounds processed (lbs mm)	279			254			541			492





OSDs and GreenDrop as a % of total pounds processed	78.5		%	78.3		%	76.3		%	75.2		%
Sales yield (3)	$	1.46		$	1.46		$	1.42		$	1.44
Cost of merchandise sold per pound processed	$	0.67		$	0.64		$	0.66		$	0.65

(1)Comparable store sales is the percentage change in comparable store sales over the comparable period in the prior fiscal year. Beginning in fiscal 2025, comparable store sales is defined as sales by stores that have been in operation for all or a portion of 14 months. The impact of the change is inconsequential to prior periods, so we have not recast previous year amounts to reflect this change. For the periods presented, comparable store sales exclude stores acquired from 2 Peaches Group, LLC (the “2 Peaches Acquisition”). Comparable store sales is measured in local currency for Canada, while total comparable store sales is measured on a currency neutral basis.

(2)Total comparable store sales and the total number of stores include our Australia retail locations, in addition to retail stores in the U.S. and Canada.

(3)We define sales yield as retail sales generated per pound processed on a currency neutral and comparable store basis.

Comparable store sales

Comparable store sales provides us with visibility into top-line performance on a like-for-like basis excluding new stores as defined above and excluding all closed stores as of the end of the current reporting period. We believe investors can use this metric to assess our ability to increase comparable store sales over time.

During the thirteen weeks ended June 28, 2025, our comparable store sales increased 4.6%, primarily reflecting higher average basket and transactions. During the thirteen weeks ended June 29, 2024, our comparable store sales decreased 0.1%, primarily reflecting a decrease in transactions and average basket in our Canada Retail segment, largely offset by higher transactions and average basket in our U.S. Retail segment.

During the twenty-six weeks ended June 28, 2025, our comparable store sales increased 3.7%, primarily reflecting higher average basket and transactions. During the twenty-six weeks ended June 29, 2024, our comparable store sales increased 0.1%, primarily reflecting higher average basket and transactions in our U.S. Retail segment, largely offset by a decrease in transactions and average basket in our Canada Retail segment.

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Number of stores

Our number of stores provides us visibility into the scale of our operations and is viewed as a key driver of long-term growth. We believe investors can use this metric to assess our ability to open new stores in high-growth markets while reducing the number of stores in low-growth markets.

Our number of stores increased to 354 stores as of June 28, 2025, from 337 stores as of June 29, 2024. The increase in stores resulted from the opening of six net new stores in the U.S., eight net new stores in Canada and three new stores in Australia.

Pounds processed and supply mix

We define pounds processed as the total number of pounds of goods processed during the period, excluding furniture and other large items. This metric is an indicator of the amount of secondhand goods processed during the period and is typically a key driver of top-line sales growth. We process inventory by receiving goods directly from our NPPs or through OSDs and GreenDrop, sorting them, and placing them on the sales floor. Increasing the proportion of OSDs and GreenDrop as a percentage of total supply is desirable as donations from these sources are usually of higher quality and collectively have a lower cost than product sourced through other channels. We believe investors can use these metrics to assist in their evaluation of our sales growth and sales yield.

During the thirteen weeks ended June 28, 2025 and June 29, 2024, we processed 279 million and 254 million pounds of supply, respectively, of which 78.5% and 78.3% was comprised of supply from OSDs and GreenDrop, respectively.

During the twenty-six weeks ended June 28, 2025 and June 29, 2024, we processed 541 million and 492 million pounds of supply, respectively, of which 76.3% and 75.2% was comprised of supply from OSDs and GreenDrop, respectively.

Sales yield

We define sales yield as retail sales generated per pound processed on a currency neutral and comparable store basis. We believe investors can use this metric as an indicator of the quality of goods we source, because when the quality is high, we are able to sell more items and/or sell items at higher prices from the volume we process than we would otherwise.

Our sales yield for the thirteen weeks ended June 28, 2025 was consistent with the thirteen weeks ended June 29, 2024 at $1.46.

Our sales yield for the twenty-six weeks ended June 28, 2025 was $1.42, compared to $1.44 for the twenty-six weeks ended June 29, 2024. The 1.4% decline in sales yield primarily reflects a decrease in items sold per pound processed, partially offset by items sold at higher price points.

Cost of merchandise sold per pound processed

We define cost of merchandise sold per pound processed as cost of merchandise sold, exclusive of depreciation and amortization, on a reported basis, divided by total pounds of goods processed. We believe investors can use this metric to determine our ability to cost-effectively purchase and process supply items, and determine the value of incremental sales.

Cost of merchandise sold per pound processed during the thirteen weeks ended June 28, 2025 and the thirteen weeks ended June 29, 2024 was $0.67 and $0.64, respectively.

Cost of merchandise sold per pound processed during the twenty-six weeks ended June 28, 2025 and the twenty-six weeks ended June 29, 2024 was $0.66 and $0.65, respectively.

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Results of Operations

The following table sets forth our results of operations for each of the periods presented:


	Thirteen Weeks Ended								Twenty-Six Weeks Ended
	June 28, 2025				June 29, 2024				June 28, 2025				June 29, 2024
(in thousands)	Amount		% of Sales		Amount		% of Sales		Amount		% of Sales		Amount		% of Sales
Net sales	$	417,208	100.0	%	$	386,663	100.0	%	$	787,353	100.0	%	$	740,835	100.0	%
Operating expenses:
Cost of merchandise sold, exclusive of depreciation and amortization	186,878		44.8		162,626		42.1		355,381		45.1		320,790		43.3
Salaries, wages and benefits	86,993		20.8		90,955		23.5		171,795		21.9		174,652		23.6
Selling, general and administrative	88,412		21.2		83,486		21.6		175,491		22.3		161,229		21.8
Depreciation and amortization	20,904		5.0		17,380		4.5		40,262		5.1		35,681		4.8
Total operating expenses	383,187		91.8		354,447		91.7		742,929		94.4		692,352		93.5
Operating income	34,021		8.2		32,216		8.3		44,424		5.6		48,483		6.5
Other expense (income):
Interest expense, net	15,985		3.8		15,767		4.1		30,799		3.9		31,843		4.3
(Gain) loss on foreign currency, net	(8,611)		(2.0)		940		0.2		(10,242)		(1.3)		1,896		0.3
Other expense (income), net	37		—		(496)		(0.1)		203		—		(390)		(0.1)
Loss on extinguishment of debt	—		—		—		—		2,718		0.3		4,088		0.5
Other expense, net	7,411		1.8		16,211		4.2		23,478		2.9		37,437		5.0
Income before income taxes	26,610		6.4		16,005		4.1		20,946		2.7		11,046		1.5
Income tax expense	7,693		1.9		6,293		1.6		6,752		0.9		1,801		0.3
Net income	$	18,917	4.5	%	$	9,712	2.5	%	$	14,194	1.8	%	$	9,245	1.2	%

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Thirteen Weeks Ended June 28, 2025 compared to the Thirteen Weeks Ended June 29, 2024

Net sales

The following table presents net sales:


	Thirteen Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Retail sales	$	396,430	$	367,922	$	28,508	7.7	%
Wholesale sales	20,778		18,741		2,037		10.9	%
Total net sales	$	417,208	$	386,663	$	30,545	7.9	%

Retail sales increased by $28.5 million, or 7.7%, during the thirteen weeks ended June 28, 2025, compared to the thirteen weeks ended June 29, 2024. The increase in retail sales resulted primarily from growth in our store base and a 4.6% increase in comparable store sales, partially offset by the unfavorable impact of foreign currency exchange rates.

Cost of merchandise sold, exclusive of depreciation and amortization

The following table presents cost of merchandise sold, exclusive of depreciation and amortization (“cost of merchandise sold”):


	Thirteen Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Cost of merchandise sold, exclusive of depreciation and amortization	$	186,878	$	162,626	$	24,252	14.9	%

Cost of merchandise sold increased 270 basis points to 44.8% of net sales during the thirteen weeks ended June 28, 2025, compared to 42.1% for the thirteen weeks ended June 29, 2024. The 270 basis point increase primarily reflects deleverage of cost of merchandise sold as a percentage of net sales on comparable store sales in Canada due to higher processing and the impact of new stores, partially offset by the favorable impact of year-over-year growth in OSD’s.

Personnel costs classified within cost of merchandise sold were $113.5 million during the thirteen weeks ended June 28, 2025, compared to $96.7 million during the thirteen weeks ended June 29, 2024. The $16.8 million increase in personnel costs resulted primarily from growth in our store base, increased labor to support higher processing, the opening of new offsite processing facilities and elevated wage rates.

Salaries, wages and benefits

The following table presents salaries, wages and benefits:


	Thirteen Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Retail and wholesale	$	55,501	$	50,715	$	4,786	9.4	%
Corporate	31,492		40,240		(8,748)		(21.7)	%
Total salaries, wages and benefits	$	86,993	$	90,955	$	(3,962)	(4.4)	%

Personnel costs for our retail and wholesale operations increased by $4.8 million, or 9.4%, during the thirteen weeks ended June 28, 2025, compared to the thirteen weeks ended June 29, 2024. The increase primarily reflects growth in our store base, higher wages and an increase to annual incentive plan expense.

Personnel costs for our corporate employees decreased by $8.7 million, or 21.7%, during the thirteen weeks ended June 28, 2025, compared to the thirteen weeks ended June 29, 2024, primarily reflecting a $10.9 million decrease in IPO-related stock-based compensation expense, partially offset by an increase in non-IPO-related stock-based compensation expense and annual incentive plan expense.

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Selling, general and administrative

The following table presents selling, general and administrative (“SG&A”):


	Thirteen Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Retail and wholesale	$	78,152	$	72,763	$	5,389	7.4	%
Corporate	10,260		10,723		(463)		(4.3)	%
Total selling, general and administrative	$	88,412	$	83,486	$	4,926	5.9	%

SG&A for our retail and wholesale operations increased by $5.4 million, or 7.4%, during the thirteen weeks ended June 28, 2025, compared to the thirteen weeks ended June 29, 2024. The increase resulted primarily from growth in our store base.

Corporate SG&A decreased by $0.5 million, or 4.3%, during the thirteen weeks ended June 28, 2025, compared to the thirteen weeks ended June 29, 2024. The decrease primarily reflects a decrease in marketing expenses, partially offset by an increase in professional services which includes costs associated with the Offering.

Depreciation and amortization

The following table presents depreciation and amortization:


	Thirteen Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Depreciation and amortization	$	20,904	$	17,380	$	3,524	20.3	%

The increase in depreciation and amortization resulted primarily from accelerated amortization and depreciation of $3.3 million due to a reduction of the estimated useful lives for certain acquisition-related intangible assets and store-related property and equipment. In addition, the increase reflects continued investments in new stores, offsite processing and information technology, as well as capital maintenance expenditures.

Interest expense, net

The following table presents interest expense, net:


	Thirteen Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Interest expense, net	$	16,375	$	17,093	$	(718)	(4.2)	%
Amortization of debt issuance cost and debt discount	1,406		1,354		52		3.8	%
Gain on interest rate swaps	(1,796)		(2,680)		884		(33.0)	%
Total interest expense, net	$	15,985	$	15,767	$	218	1.4	%

The increase in interest expense, net was primarily due to a decrease in the gain on interest rate swaps of $0.9 million as the remaining deferred gain recognized within accumulated other comprehensive income from the interest rate swap was reclassified as of May 2025. This was offset by a decrease in interest expense, net primarily due to a lower weighted average face value of debt and a decrease in the weighted average interest rate. The weighted average face value of debt decreased 6.4% from $765.7 million during the thirteen weeks ended June 29, 2024 to $716.8 million during the thirteen weeks ended June 28, 2025 due to debt repayments. Over the same period, the weighted average interest rate decreased 46 basis points from 9.46% to 9.00%. This decrease was due to a decrease in interest rates affecting amounts borrowed under our Term Loan Facility.

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(Gain) loss on foreign currency, net

The following table presents (gain) loss on foreign currency, net:


	Thirteen Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
(Gain) loss on foreign currency remeasurement	$	(12,859)	$	3,162	$	(16,021)	n/m
Loss (gain) on derivative instruments	4,248		(2,222)		6,470		n/m
Total (gain) loss on foreign currency, net	$	(8,611)	$	940	$	(9,551)	n/m

n/m - not meaningful

Gains and losses on foreign currency relate primarily to movements in the Canadian dollar (“CAD”) relative to the U.S. dollar (“USD”). During the thirteen weeks ended June 28, 2025, the USD weakened against the CAD relative to March 29, 2025, resulting in remeasurement gains of $12.9 million arising primarily on USD-denominated debt held by one of our Canadian subsidiaries. We also recorded losses of $4.2 million during the thirteen weeks ended June 28, 2025 on derivative instruments we use to manage foreign currency exchange rate risk.

During the thirteen weeks ended June 29, 2024, the USD strengthened against the CAD relative to March 30, 2024, resulting in remeasurement losses of $3.2 million arising primarily on USD-denominated debt held by one of our Canadian subsidiaries. We also recorded gains of $2.2 million during the thirteen weeks ended June 29, 2024 on derivative instruments we use to manage foreign currency exchange rate risk.

Other expense (income), net

The following table presents other expense (income), net:


	Thirteen Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Other expense (income), net	$	37	$	(496)	$	533	n/m

n/m – not meaningful

Other expense (income), net is comprised primarily of miscellaneous income and expenses not directly related to our core operating activities.

Income tax expense

The following table presents income tax expense:


	Thirteen Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Income tax expense	$	7,693	$	6,293	$	1,400	22.2	%

For the thirteen weeks ended June 28, 2025, we recorded an income tax expense of $7.7 million on income before income taxes of $26.6 million, resulting in an effective tax rate of 28.9%. For the thirteen weeks ended June 29, 2024, we recorded income tax expense of $6.3 million on income before income taxes of $16.0 million, resulting in an effective tax rate of 39.3%. The decrease in our effective tax rate was primarily driven by reduced executive compensation subject to limitation under Internal Revenue Code Section 162(m).

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Segment results

The following table presents net sales and profit by segment:


	Thirteen Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Net sales:
U.S. Retail	$	228,833	$	207,068	$	21,765	10.5	%
Canada Retail	154,956		149,836		5,120		3.4	%
Total segment sales	$	383,789	$	356,904	$	26,885	7.5	%
Segment profit:
U.S. Retail	$	48,513	$	48,058	$	455	0.9	%
Canada Retail	$	39,475	$	44,078	$	(4,603)	(10.4)	%

U.S. Retail

U.S. Retail sales increased by $21.8 million, or 10.5%, during the thirteen weeks ended June 28, 2025, compared to the thirteen weeks ended June 29, 2024. The increase in U.S. Retail sales resulted from a 6.2% increase in comparable store sales, as well as growth in our store base. The increase in comparable store sales was driven by higher transactions and average basket.

U.S. Retail segment profit increased by $0.5 million, or 0.9%, during the thirteen weeks ended June 28, 2025, compared to the thirteen weeks ended June 29, 2024. The increase in U.S. Retail segment profit primarily reflects an increase in profit from our comparable stores, largely offset by the impact of new stores.

Canada Retail

Canada Retail sales increased by $5.1 million, or 3.4%, during the thirteen weeks ended June 28, 2025, compared to the thirteen weeks ended June 29, 2024. The increase in Canada Retail sales resulted from growth in our store base and a 2.6% increase in comparable store sales, partially offset by the impact of foreign currency exchange rates. The increase in comparable store sales was primarily driven by higher average basket.

Canada Retail segment profit decreased by $4.6 million, or 10.4%, during the thirteen weeks ended June 28, 2025, compared to the thirteen weeks ended June 29, 2024. The decrease in Canada Retail segment profit primarily reflects deleverage of cost of merchandise sold as a percentage of net sales on comparable store sales.

Twenty-Six Weeks Ended June 28, 2025 compared to the Twenty-Six Weeks Ended June 29, 2024

Net sales

The following table presents net sales:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Retail sales	$	747,189	$	704,717	$	42,472	6.0	%
Wholesale sales	40,164		36,118		4,046		11.2	%
Total net sales	$	787,353	$	740,835	$	46,518	6.3	%

Retail sales increased by $42.5 million, or 6.0%, during the twenty-six weeks ended June 28, 2025, compared to the twenty-six weeks ended June 29, 2024. The increase in retail sales resulted primarily from growth in our store base and a 3.7% increase in comparable store sales, partially offset by the unfavorable impact of foreign currency exchange rates.

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Cost of merchandise sold, exclusive of depreciation and amortization

The following table presents cost of merchandise sold, exclusive of depreciation and amortization:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Cost of merchandise sold, exclusive of depreciation and amortization	$	355,381	$	320,790	$	34,591	10.8	%

Cost of merchandise sold increased 180 basis points to 45.1% of net sales during the twenty-six weeks ended June 28, 2025, compared to 43.3% for the twenty-six weeks ended June 29, 2024. The 180 basis point increase primarily reflects deleverage of cost of merchandise sold as a percentage of net sales on comparable store sales in Canada due to higher processing and the impact of new stores, partially offset by the favorable impact of year-over-year growth in OSD’s.

Personnel costs classified within cost of merchandise sold were $219.0 million during the twenty-six weeks ended June 28, 2025, compared to $192.4 million during the twenty-six weeks ended June 29, 2024. The $26.6 million increase in personnel costs resulted primarily from growth in our store base, increased labor to support higher processing, the opening of new offsite processing facilities and elevated wage rates.

Salaries, wages and benefits

The following table presents salaries, wages and benefits:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Retail and wholesale	$	108,204	$	98,385	$	9,819	10.0	%
Corporate	63,591		76,267		(12,676)		(16.6)	%
Total salaries, wages and benefits	$	171,795	$	174,652	$	(2,857)	(1.6)	%

Personnel costs for our retail and wholesale operations increased by $9.8 million, or 10.0%, during the twenty-six weeks ended June 28, 2025, compared to the twenty-six weeks ended June 29, 2024. The increase primarily reflects growth in our store base and an increase to annual incentive plan expense.

Personnel costs for our corporate employees decreased by $12.7 million, or 16.6%, during the twenty-six weeks ended June 28, 2025, compared to the twenty-six weeks ended June 29, 2024, primarily reflecting a $20.0 million decrease in IPO-related stock-based compensation expense, partially offset by an increase in non-IPO-related stock-based compensation expense and annual incentive plan expense.

Selling, general and administrative

The following table presents SG&A:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Retail and wholesale	$	154,087	$	137,111	$	16,976	12.4	%
Corporate	21,404		24,118		(2,714)		(11.3)	%
Total selling, general and administrative	$	175,491	$	161,229	$	14,262	8.8	%

SG&A for our retail and wholesale operations increased by $17.0 million, or 12.4%, during the twenty-six weeks ended June 28, 2025, compared to the twenty-six weeks ended June 29, 2024. The increase resulted primarily from growth in our store base, rent and utilities and routine maintenance costs.

Corporate SG&A decreased by $2.7 million, or 11.3%, during the twenty-six weeks ended June 28, 2025, compared to the twenty-six weeks ended June 29, 2024. The decrease primarily reflects a decrease in marketing, professional services, and repairs and maintenance expenses.

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Depreciation and amortization

The following table presents depreciation and amortization:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Depreciation and amortization	$	40,262	$	35,681	$	4,581	12.8	%

Interest expense, net

The following table presents interest expense, net:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Interest expense, net	$	32,405	$	34,792	$	(2,387)	(6.9)	%
Amortization of debt issuance cost and debt discount	2,826		2,755		71		2.6	%
Gain on interest rate swaps	(4,432)		(5,704)		1,272		(22.3)	%
Total interest expense, net	$	30,799	$	31,843	$	(1,044)	(3.3)	%

The decrease in interest expense, net was primarily due to a lower weighted average face value of debt and a decrease in the weighted average interest rate. The weighted average face value of debt decreased 7.4% from $784.2 million during the twenty-six weeks ended June 29, 2024 to $726.5 million during the twenty-six weeks ended June 28, 2025 due to debt repayments. Over the same period, the weighted average interest rate decreased 54 basis points from 9.56% to 9.02%. This decrease was due to a decrease in interest rates affecting amounts borrowed under our Term Loan Facility.

(Gain) loss on foreign currency, net

The following table presents (gain) loss on foreign currency, net:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
(Gain) loss on foreign currency remeasurement	$	(14,835)	$	10,003	$	(24,838)	n/m
Loss (gain) on derivative instruments	4,593		(8,107)		12,700		n/m
Total (gain) loss on foreign currency, net	$	(10,242)	$	1,896	$	(12,138)	n/m

n/m – not meaningful

Gains and losses on foreign currency relate primarily to movements in the CAD relative to the USD. During the twenty-six weeks ended June 28, 2025, the USD weakened against the CAD relative to December 28, 2024, resulting in remeasurement gains of $14.8 million arising primarily on USD-denominated debt held by one of our Canadian subsidiaries. We also recorded losses of $4.6 million during the twenty-six weeks ended June 28, 2025 on derivative instruments we use to manage foreign currency exchange rate risk.

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During the twenty-six weeks ended June 29, 2024, the USD strengthened against the CAD relative to December 30, 2023, resulting in remeasurement losses of $10.0 million arising primarily on USD-denominated debt held by one of our Canadian subsidiaries. We also recorded gains of $8.1 million during the twenty-six weeks ended June 29, 2024 on derivative instruments we use to manage foreign currency exchange rate risk.

Other expense (income), net

The following table presents other expense (income), net:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Other expense (income), net	$	203	$	(390)	$	593	n/m

n/m – not meaningful

Other expense (income), net is comprised primarily of miscellaneous income and expenses not directly related to our core operating activities.

Loss on extinguishment of debt

The following table presents loss on extinguishment of debt:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Loss on extinguishment of debt	$	2,718	$	4,088	$	(1,370)	(33.5)	%

During the twenty-six weeks ended June 28, 2025, we redeemed $44.5 million aggregate principal amount of the Senior Secured Notes, resulting in a loss on debt extinguishment of $2.7 million.

During the twenty-six weeks ended June 29, 2024, loss on extinguishment of debt of $4.1 million comprised $0.7 million associated with the repricing of outstanding borrowings under our Term Loan Facility on January 30, 2024 and $3.4 million associated with the redemption of $49.5 million aggregate principal amount of the Senior Secured Notes on March 4, 2024.

Income tax expense

The following table presents income tax expense:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Income tax expense	$	6,752	$	1,801	$	4,951	n/m

n/m – not meaningful

During the twenty-six weeks ended June 28, 2025, we recorded income tax expense of $6.8 million on income before income taxes of $20.9 million, resulting in an effective tax rate of 32.2%. During the twenty-six weeks ended June 29, 2024, we recorded income tax expense of $1.8 million on income before income taxes of $11.0 million, resulting in an effective income tax rate of 16.3%. The increase in our effective tax rate resulted primarily from a tax shortfall in stock-based compensation recognized during the twenty-six weeks ended June 28, 2025, compared to a windfall tax benefit recorded during the twenty-six weeks ended June 29, 2024.

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Segment results

The following table presents net sales and profit by segment:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024		$ Change		% Change
Net sales:
U.S. Retail	$	439,598	$	399,648	$	39,950	10.0	%
Canada Retail	283,591		283,955		(364)		(0.1)	%
Total segment sales	$	723,189	$	683,603	$	39,586	5.8	%
Segment profit:
U.S. Retail	$	87,511	$	88,679	$	(1,168)	(1.3)	%
Canada Retail	$	64,791	$	78,791	$	(14,000)	(17.8)	%

U.S. Retail

U.S. Retail sales increased by $40.0 million, or 10.0%, during the twenty-six weeks ended June 28, 2025, compared to the twenty-six weeks ended June 29, 2024. The increase in U.S. Retail sales resulted from growth in our store base, as well as a 5.2% increase in comparable store sales. The increase in comparable store sales was driven by higher transactions and average basket.

U.S. Retail segment profit decreased by $1.2 million, or 1.3%, during the twenty-six weeks ended June 28, 2025, compared to the twenty-six weeks ended June 29, 2024. The decrease in U.S. Retail segment profit primarily reflects the impact of new stores, largely offset by an increase in profit from our comparable stores.

Canada Retail

Canada Retail sales decreased by $0.4 million, or 0.1%, during the twenty-six weeks ended June 28, 2025, compared to the twenty-six weeks ended June 29, 2024, due to the impact of foreign currency exchange rates, largely offset by growth in our store base and a 1.7% increase in comparable store sales. The increase in comparable store sales was primarily driven by higher average basket.

Canada Retail segment profit decreased by $14.0 million, or 17.8%, during the twenty-six weeks ended June 28, 2025, compared to twenty-six weeks ended June 29, 2024. The decrease in segment profit primarily reflects deleverage of expenses as a percentage of net sales on comparable store sales.

Non-GAAP Financial Measures

The Company reports its financial results in accordance with GAAP. We also present the following non-GAAP financial measures: Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA, Adjusted EBITDA margin and constant-currency net sales. In the discussion that follows, we provide definitions and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. We have provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental to, and in addition to, the financial measures presented in this Quarterly Report that are calculated and presented in accordance with GAAP. These non-GAAP financial measures should not be considered superior to, as a substitute for, or an alternative to, and should be considered in conjunction with, the GAAP financial measures presented elsewhere in this Quarterly Report. These non-GAAP financial measures may differ from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

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Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin

Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. We have included these non-GAAP financial measures as these are key measures used by our management and our board of directors to evaluate our operating performance and the effectiveness of our business strategies, make budgeting decisions and evaluate compensation decisions. The Company presents Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin because it considers these meaningful measures to share with investors as 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, the Company provides investors with management’s perspective of the Company’s operating performance.

Adjusted net income is defined as net income excluding the impact of loss on extinguishment of debt, IPO-related stock-based compensation expense, transaction costs, foreign currency exchange rate impacts, executive transition costs, certain other adjustments, the tax effect on the above adjustments and the excess tax shortfall (benefit) from stock-based compensation. We define Adjusted net income per diluted share as Adjusted net income divided by diluted weighted average common shares outstanding.

Adjusted EBITDA is defined as net income excluding the impact of interest expense, net, income tax expense, depreciation and amortization, loss on extinguishment of debt, stock-based compensation expense, lease intangible asset expense, executive transition costs, transaction costs, foreign currency exchange rate impacts and certain other adjustments. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales, expressed as a percentage.

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A reconciliation of GAAP net income and GAAP net income per diluted share to Adjusted net income and Adjusted net income per diluted share is presented in the table below:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(in thousands, except per share amounts)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Adjusted net income:
Net income	$	18,917	$	9,712	$	14,194	$	9,245
Loss on extinguishment of debt (1)(2)	—		—		2,718		4,088
IPO-related stock-based compensation expense (1)(3)	8,870		19,732		17,749		37,725
Transaction costs (1)(4)	1,205		350		1,205		2,607
Foreign currency exchange rate impacts (1)(5)	(8,513)		940		(8,999)		1,896
Executive transition costs (1)(6)	—		610		—		610
Other adjustments (1)(7)	2,580		(713)		2,253		(711)
Tax effect on adjustments (8)	(555)		(4,192)		(3,219)		(10,314)
Excess tax shortfall (benefit) from stock-based compensation	248		262		466		(2,766)
Adjusted net income	$	22,752	$	26,701	$	26,367	$	42,380

Adjusted net income per share - diluted:
Net income per share, diluted	$	0.12	$	0.06	$	0.09	$	0.06
Loss on extinguishment of debt (1)(2)	—		—		0.02		0.02
IPO-related stock-based compensation expense (1)(3)	0.05		0.12		0.11		0.22
Transaction costs (1)(4)	0.01		—		0.01		0.02
Foreign currency exchange rate impacts (1)(5)	(0.05)		0.01		(0.06)		0.01
Executive transition costs (1)(6)	—		—		—		—
Other adjustments (1)(7)	0.02		—		0.01		—
Tax effect on adjustments (8)	—		(0.02)		(0.02)		(0.06)
Excess tax shortfall (benefit) from stock-based compensation	—		—		—		(0.02)
Adjusted net income per diluted share*	$	0.14	$	0.16	$	0.16	$	0.25

*May not foot due to rounding

(1)Presented pre-tax.

(2)Removes the effects of the loss on extinguishment of debt in relation to the partial redemption of our Senior Secured Notes on February 6, 2025 and March 4, 2024, and the repricing of outstanding borrowings under the Term Loan Facility on January 30, 2024.

(3)Represents stock-based compensation expense for performance-based options triggered by the completion of our IPO and expense related to restricted stock units issued in connection with the Company’s IPO.

(4)Comprised of non-capitalizable expenses related to offering costs, debt transactions and acquisitions.

(5)Represents remeasurement (gains) losses on unsettled foreign currency transactions, realized and unrealized (gains) losses on cross currency swaps, and unrealized (gains) losses on forward contracts. Beginning in fiscal 2025, this line does not include realized (gains) losses on forward contracts. The impact of the change is inconsequential to prior periods, so we have not recast previous year amounts to reflect this change.

(6)Represents severance costs associated with executive leadership changes.

(7)The thirteen and twenty-six weeks ended June 28, 2025 include accelerated amortization and depreciation of $3.3 million due to a reduction of the estimated useful lives for certain acquisition-related intangible assets and store-related property and equipment. In addition, the thirteen and twenty-six weeks ended June 28, 2025 include a reduction to the fair value of acquisition-related contingent consideration of $0.9 million and $1.2 million, respectively. The thirteen and twenty-six weeks ended June 29, 2024 include insurance proceeds of $0.7 million.

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(8)Tax effect on adjustments is calculated utilizing the tax rate specifically applicable to the respective adjustments.

A reconciliation of GAAP net income to Adjusted EBITDA is presented in the table below:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(dollars in thousands)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Net income	$	18,917	$	9,712	$	14,194	$	9,245
Interest expense, net	15,985		15,767		30,799		31,843
Income tax expense	7,693		6,293		6,752		1,801
Depreciation and amortization	20,904		17,380		40,262		35,681
Loss on extinguishment of debt (1)	—		—		2,718		4,088
Stock-based compensation expense (2)	12,429		21,650		23,965		40,779
Lease intangible asset expense (3)	852		904		1,685		1,781
Executive transition costs (4)	—		610		—		610


Transaction costs (5)	1,205		350		1,205		2,607
Foreign currency exchange rate impacts (6)	(8,513)		940		(8,999)		1,896
Other adjustments (7)	(686)		(713)		(1,013)		(711)
Adjusted EBITDA	$	68,786	$	72,893	$	111,568	$	129,620
Net income margin	4.5%		2.5%		1.8%		1.2%
Adjusted EBITDA margin	16.5%		18.9%		14.2%		17.5%

(1)Removes the effects of the loss on extinguishment of debt in relation to the partial redemption of our Senior Secured Notes on February 6, 2025 and March 4, 2024, and the repricing of outstanding borrowings under the Term Loan Facility on January 30, 2024.

(2)Represents non-cash stock-based compensation expense related to stock options and restricted stock units granted to certain of our employees and directors.

(3)Represents lease expense associated with acquired lease intangibles. Prior to the adoption of Topic 842, this expense was included within depreciation and amortization.

(4)Represents severance costs associated with executive leadership changes.

(5)Comprised of non-capitalizable expenses related to offering costs, debt transactions and acquisitions.

(6)Represents remeasurement (gains) losses on unsettled foreign currency transactions, realized and unrealized (gains) losses on cross currency swaps, and unrealized (gains) losses on forward contracts. Beginning in fiscal 2025, this line does not include realized (gains) losses on forward contracts. The impact of the change is inconsequential to prior periods, so we have not recast previous year amounts to reflect this change.

(7)The thirteen and twenty-six weeks ended June 28, 2025 include a reduction to the fair value of acquisition-related contingent consideration of $0.9 million and $1.2 million, respectively. The thirteen and twenty-six weeks ended June 29, 2024 include insurance proceeds of $0.7 million.

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 USD into the USD. 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 USD against the CAD and are affected negatively by a strengthening of the USD against the CAD. References to operating results on a constant-currency basis indicate operating results without the impact of foreign currency exchange rate fluctuations.

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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. 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 June 28, 2025, as compared to the thirteen weeks ended June 29, 2024, the USD was stronger relative to the CAD and the Australian dollar (“AUD”), which resulted in an unfavorable impact on our operating results. During the twenty-six weeks ended June 28, 2025, as compared to the twenty-six weeks ended June 29, 2024, the USD was stronger relative to the CAD and the AUD, which resulted in an unfavorable impact on our operating results.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.

A reconciliation of GAAP net sales to constant-currency net sales is presented in the table below:


	Thirteen Weeks Ended
(dollars in thousands)	Net Sales		Impact of Foreign Currency		Constant-Currency Net Sales		$ Change Over Prior Year		% Change Over Prior Year
June 28, 2025
U.S. Retail	$	228,833	$	—	$	228,833	$	21,765	10.5	%
Canada Retail	154,956		1,884		156,840		7,004		4.7	%
Other	33,419		384		33,803		4,044		13.6	%
Total net sales	$	417,208	$	2,268	$	419,476	$	32,813	8.5	%
June 29, 2024
U.S. Retail	$	207,068	n/a		$	207,068	n/a		n/a
Canada Retail	149,836		n/a		149,836		n/a		n/a
Other	29,759		n/a		29,759		n/a		n/a
Total net sales	$	386,663	n/a		$	386,663	n/a		n/a


	Twenty-Six Weeks Ended
(dollars in thousands)	Net Sales		Impact of Foreign Currency		Constant-Currency Net Sales		$ Change Over Prior Year		% Change Over Prior Year
June 28, 2025
U.S. Retail	$	439,598	$	—	$	439,598	$	39,950	10.0	%
Canada Retail	283,591		10,482		294,073		10,118		3.6	%
Other	64,164		1,094		65,258		8,026		14.0	%
Total net sales	$	787,353	$	11,576	$	798,929	$	58,094	7.8	%
June 29, 2024
U.S. Retail	$	399,648	n/a		$	399,648	n/a		n/a
Canada Retail	283,955		n/a		283,955		n/a		n/a
Other	57,232		n/a		57,232		n/a		n/a
Total net sales	$	740,835	n/a		$	740,835	n/a		n/a

n/a - not applicable

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Liquidity and Capital Resources

Overview

We have historically financed our operations primarily with cash generated by operating activities and proceeds from debt issuances. Although we do not anticipate paying any cash dividends in the foreseeable future, any future determination relating to dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including restrictions in our current and future debt instruments, our future earnings, capital requirements, financial condition, prospects and applicable Delaware law, which provides that dividends are only payable out of surplus or current net profits.

Our primary short-term requirements for liquidity and capital are to meet general working capital needs, fund capital expenditures and to make interest payments on our debt. Our primary long-term liquidity and capital needs relate to repaying the principal balance on our debt and making lease payments on our retail stores and processing facilities. We may also use cash on our balance sheet, cash generated from operations or proceeds from new borrowings, or any combination of these sources of liquidity and capital, to pay for acquisitions, to fund growth initiatives, to pay down debt or to conduct repurchases of our common stock, or any combination of the foregoing. Our primary sources of liquidity and capital are cash generated from operations and proceeds from borrowings, including borrowings on our Revolving Credit Facility. As of June 28, 2025, $124.1 million was available to borrow under the Revolving Credit Facility.

We believe our existing cash and cash equivalents and cash provided by our operating activities are sufficient to fund our liquidity needs for the next 12 months.

See Note 4. Debt to our unaudited interim condensed consolidated financial statements for details of our debt.

Share repurchase authorization

We announced on November 9, 2023 the authorization of a share repurchase program of up to $50.0 million of our common stock. Under the program, we may purchase shares from time to time in compliance with applicable securities laws, that may include Securities Act Rule 10b-18. The program is currently set to expire on November 8, 2025. Although our Board of Directors has authorized the share repurchase program, we are not obligated to repurchase any specific dollar amount or to acquire any specific number of shares under the program. In addition, the share repurchase program may be suspended, modified, or terminated at any time without prior notice. The amount, timing, and execution of our share repurchase program will be based upon a variety of factors, including the share price of our common stock, general market conditions, alternative uses for capital, our financial performance, and other considerations. Any repurchases will be funded by available cash and cash equivalents.

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Cash Flows

Twenty-Six Weeks Ended June 28, 2025 compared to the Twenty-Six Weeks Ended June 29, 2024

The following table summarizes our cash flows:


	Twenty-Six Weeks Ended
(in thousands)	June 28, 2025		June 29, 2024
Net cash provided by operating activities	$	54,865	$	54,566
Net cash used in investing activities	(53,879)		(28,004)
Net cash used in financing activities	(82,933)		(43,536)
Effect of exchange rate changes on cash and cash equivalents	2,530		(2,330)
Net change in cash and cash equivalents	$	(79,417)	$	(19,304)

Net cash provided by operating activities

Net cash provided by operating activities for the twenty-six weeks ended June 28, 2025 was $54.9 million, compared to $54.6 million for the twenty-six weeks ended June 29, 2024. Net cash provided by operating activities remained relatively consistent for the twenty-six weeks ended June 28, 2025, compared to the twenty-six weeks ended June 29, 2024, primarily reflecting steady operational performance and effective working capital management.

Net cash used in changes in operating assets and liabilities during the twenty-six weeks ended June 28, 2025 consisted primarily of a $62.2 million change in operating lease liabilities and a $13.2 million change in prepaid expenses and other assets. The change in operating lease liabilities resulted from lease payments. The change in prepaid expenses and other assets is primarily a result of an increase in prepaid taxes.

Net cash used in changes in operating assets and liabilities during the twenty-six weeks ended June 29, 2024 consisted primarily of a $60.0 million change in operating lease liabilities, a $14.7 million change in accrued payroll and related taxes, a $14.2 million change in accounts payable and accrued liabilities, and a $12.3 million change in prepaid expenses and other assets. The change in operating lease liabilities resulted from the payment towards our lease liabilities. The change in accrued payroll and related taxes resulted primarily from the annual payment of incentive compensation to our employees. As of December 30, 2023, we accrued $24.4 million which was paid during the first quarter of fiscal year 2024. As of June 29, 2024, we accrued $6.5 million for employee incentive compensation, the majority of which we paid during the first quarter of fiscal year 2025. The change in accounts payable and accrued liabilities resulted primarily from an increase in Canadian income taxes payable. The change in prepaid expenses and other assets is primarily a result of an increase in prepaid U.S. income taxes.

Net cash used in investing activities

Net cash used in investing activities was $53.9 million for the twenty-six weeks ended June 28, 2025 which consisted primarily of $53.1 million of expenditures related to investments in new stores, offsite processing, information technology and capital maintenance expenditures, as well as $2.9 million of purchases of marketable securities related to the Company’s deferred compensation plan.

Net cash used in investing activities was $28.0 million for the twenty-six weeks ended June 29, 2024 which consisted primarily of $53.3 million of expenditures related to investments in new stores, offsite processing, information technology and capital maintenance expenditures, as well as a net payment of $2.9 million related to the 2 Peaches Acquisition. Net cash used in investing activities further includes proceeds of $28.1 million related to the termination of the Company’s cross currency swaps in April 2024.

Net cash used in financing activities

Net cash used in financing activities was $82.9 million for the twenty-six weeks ended June 28, 2025 which consisted primarily of a $44.5 million principal payment on the Senior Secured Notes and $35.6 million of repurchases of common stock.

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Net cash used in financing activities was $43.5 million for the twenty-six weeks ended June 29, 2024 and consisted primarily of $52.5 million of principal payments on our long-term debt, partially offset by $11.9 million related to the settlement of an interest rate swap with an other-than-insignificant financing element at inception, including $9.6 million related to the April 2024 termination of the aforementioned interest rate swap.

Critical Accounting Estimates

Our unaudited interim condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report are prepared in accordance with GAAP. Preparation of our unaudited interim condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from our estimates under different assumptions or conditions. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the assumptions and estimates, as set forth in our 2024 Annual Report on Form 10-K, associated with the impairment assessments of our goodwill and indefinite-lived intangible assets and income taxes have the greatest potential impact on our unaudited interim condensed consolidated financial statements. Accordingly, we believe these policies are most critical to aid in fully understanding and evaluating our unaudited interim condensed consolidated financial statements. There have been no material changes to our critical accounting estimates as disclosed in our 2024 Annual Report on Form 10-K.

Recent Accounting Pronouncements

See Note 2. Summary of Significant Accounting Policies to our Notes to Interim Condensed Consolidated Financial Statements (unaudited) included in this Quarterly Report on Form 10-Q for a description of recently issued accounting pronouncements not yet adopted.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we are exposed to various market risks. Our primary market risks are interest rate risk associated with our variable rate debt and foreign currency exchange risk associated with our operations in Canada and Australia. We continually monitor these risks, regularly consider which risks need active management and, when appropriate, develop targeted risk management strategies. We may manage our exposure to changes in interest rates and foreign exchange rates through the use of derivative financial instruments with the objective of reducing potential statement of operations, cash flow, and market exposures. We use derivative financial instruments solely to mitigate market exposure and not for trading or speculative purposes. Refer to Note 6. Derivative Financial Instruments for additional information.

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Interest rate risk

Changes in interest rates affect the amount of interest due on our variable rate debt. As of June 28, 2025, we had variable rate borrowings on the Term Loan Facility of $315.8 million and no advances under our Revolving Credit Facility. We currently use Term SOFR as a reference rate for our variable rate debt and any future increases in Term SOFR will inherently result in an increase in interest expense and cash paid toward interest.

We performed a sensitivity analysis to determine the effect of interest rate fluctuations on our interest expense. A hypothetical 1 percentage point increase in Term SOFR would result in an increase to interest expense of $3.2 million over 12 months based on amounts outstanding and interest rates in effect as of June 28, 2025.

Foreign currency exchange risk

In addition to our U.S. business, we operate in Canada and Australia. Operations conducted entirely in each jurisdiction use that jurisdiction’s currency as their functional currency and changes in foreign exchange rates affect the translation of the results of these businesses into the USD, which is the reporting currency of the Company. For the twenty-six weeks ended June 28, 2025, approximately 41.6% of our net sales were denominated in a currency other than the USD. For the twenty-six weeks ended June 28, 2025, a hypothetical 10% strengthening of the USD to the CAD would decrease our net sales by $27.4 million and a hypothetical 10% weakening of the USD to the CAD would increase our net sales by $33.5 million. A hypothetical 10% change in the relative fair value of the USD to the Australian Dollar (“AUD”) would not have a material impact on our operations. We will be susceptible to fluctuations in the USD compared to the CAD and the AUD if we do not hedge our exchange rate exposure. As such, we seek to manage the risk from changes in foreign currency exchange rates through the use of forward contracts or cross currency swaps or both. Forward contracts are maintained on a rolling 12-month basis.

At June 28, 2025, the entire $315.8 million balance on our variable rate borrowings is USD-denominated and is owed by one of our Canadian subsidiaries whose functional currency is the CAD. These variable rate borrowings expose the Company to remeasurement risk. For the twenty-six weeks ended June 28, 2025, a hypothetical 10% strengthening of the USD to the CAD would decrease net income by $28.7 million. For the twenty-six weeks ended June 28, 2025, a hypothetical 10% weakening of the USD to the CAD would increase net income by $35.1 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the 1934 Act) as of June 28, 2025. Based on the evaluation of the design and operation of our disclosure controls and procedures, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of June 28, 2025 due to the material weakness in our internal control over financial reporting as described below. In light of this fact, our management has performed additional analyses, reconciliations, and other procedures and has concluded that, notwithstanding the material weakness in our internal control over financial reporting, the financial statements for the periods covered by and included in this Quarterly Report fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

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Material Weakness in Internal Control over Financial Reporting

As previously reported in our Annual Report on Form 10-K filed with the SEC on February 21, 2025, we have identified a material weakness in internal control over financial reporting. The material weakness resulted from ineffective information technology general controls (“ITGCs”) in the areas of user access and program change-management over certain information technology (“IT”) systems that support the Company’s financial reporting processes. These control deficiencies were a result of: IT control processes lacked sufficient documentation; insufficient training and accountability of certain individuals with IT expertise; and inadequate risk-assessment processes to identify and assess changes in IT environments and controls that could impact internal control over financial reporting. As a result, process level automated controls that are dependent on the affected IT environment and manual controls that rely on system-generated data or reports from the affected IT environment were ineffective because they could have been adversely impacted.

Management Remediation Activities

To address the material weakness over ITGCs, we have initiated and continue to execute on a plan to establish more robust processes to support our design and operating effectiveness of ITGCs, which includes the addition of information systems compliance personnel. In addition, we have engaged external advisors who are assisting in strengthening our ITGCs.

Changes in Internal Control over Financial Reporting

Other than the changes intended to remediate the material weaknesses noted above, there was no change in our internal controls over financial reporting, as defined under Rule 13a-15 under the Exchange Act, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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Part II - Other Information

Item 1. Legal Proceedings

Information regarding legal proceedings is incorporated by reference from Note 11 to our unaudited interim condensed consolidated financial statements included in this Form 10-Q under the heading “Commitments and Contingencies.”

Item 1A. Risk Factors

Factors that could cause our actual results to differ materially from those in this report are any of the risks disclosed in our Annual Report on Form 10-K, which was filed with the SEC on February 21, 2025. There have been no material changes from the risk factors previously disclosed. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)Recent Sales of Unregistered Securities

None.

(b)Use of Proceeds

None.

(c)Issuer Purchases of Equity Securities

The following table sets forth information concerning our purchases of common stock for the periods indicated (in thousands, except share and per share amounts):


Period	Total Number of Shares Purchased (a)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs as of the End of Period
March 30, 2025 to April 26, 2025	395,759	$	8.02	395,759	$	3,190
April 27, 2025 to May 24, 2025	2,300,881	8.87		42,514	2,786
May 25, 2025 to June 28, 2025	1,767	10.65		—	2,786
Total	2,698,407	8.75		438,273

(a) Total number of shares purchased includes 2,002 shares of restricted stock repurchased in connection with employee tax withholding obligations under employee compensation plans, which are not purchases under any publicly announced plan, and 2,258,132 shares of common stock repurchased in connection with the Offering.

(b) On November 9, 2023, the Company announced the authorization of a share repurchase program of up to $50.0 million of the Company’s common stock. Under the program, Savers may purchase shares from time to time in compliance with applicable securities laws, that may include Securities Act Rule 10b-18. The program is currently set to expire on November 8, 2025. There was $2.8 million remaining under the share repurchase program as of June 28, 2025.

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Item 3. Defaults Upon Senior Securities

(a) None.

(b) None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Rule 10b5-1 Plan Elections

During the thirteen weeks ended June 28, 2025, the adoption or termination of contracts, instructions or written plans for the purchase or sale of our securities by our executive officers and directors, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (“Rule 10b5-1 Plan”), were as follows:

Mark Walsh, Chief Executive Officer and a member of our Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on May 19, 2025. Mr. Walsh’s plan provides for the potential exercise of vested stock options and the associated sale of up to 350,000 shares of Savers common stock. The plan becomes effective on August 18, 2025 and expires on April 1, 2026, or upon earlier completion of all authorized transactions under the plan.

William Allen, a member of our Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on May 15, 2025. Mr. Allen’s plan provides for the potential exercise of vested stock options and the associated sale of up to 12,402 shares of Savers common stock. The plan becomes effective on August 15, 2025 and expires on May 15, 2026, or upon earlier completion of all authorized transactions under the plan.

Jubran Tanious, President and Chief Operating Officer, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on May 29, 2025. Mr. Tanious’ plan provides for the potential exercise of vested stock options and the associated sale of up to 358,105 shares of Savers common stock. The plan becomes effective on August 28, 2025 and expires on December 31, 2025, or upon earlier completion of all authorized transactions under the plan.

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Item 6. Exhibits and financial statement schedules.

The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.

Exhibit Index

Incorporated by Reference

Exhibit
Number

Description of Document

Form

Exhibit

Filing Date

Filed Herewith

31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

32.2

Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

Exhibit 101

The following financial statements from the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 28, 2025, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Operations and Comprehensive Income, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Interim Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

Exhibit 104

The cover page from the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 28, 2025, formatted in Inline XBRL (included within Exhibit 101).

____________

# Indicates management contract or compensatory plan.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.






Date:	July 31, 2025	By:	/s/ Michael W. Maher
			Michael W. Maher
			Chief Financial Officer and Treasurer (Principal Financial Officer)