Savers Value Village Inc
For the period ended Sep 28, 2024. Filed Nov 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 28, 2024 · Filed Nov 8, 2024
SVV$9.84+8.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-08-09.
0001883313-24-000037
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-28; filed 2024-11-08.
0001883313-24-000044
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 212 previous paragraphs and 214 current paragraphs.
118 unchanged; 64 reworded; 30 added; 29 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 28 previous and 29 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
•Comparable store sales decreased 2.4%, with the U.S. increasing 1.6% and Canada decreasing 7.5%. A timing shift in the Canada Day holiday negatively impacted Canadian comparable store sales by approximately 100 basis points in the third quarter.
Current report
•The Company opened nine new stores, ending the third quarter with 344 stores.
Current report
Macroeconomic Conditions in Canada
Current report
The macroeconomic environment in Canada remains challenging, with elevated levels of unemployment and a high cost of living that is especially hard on low-income consumers. 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 our profitability.
Current report
In response to the macroeconomic pressures in Canada, we have been actively testing different approaches to improve our Canadian business, particularly in the areas of selection and pricing, to drive foot traffic, increase conversion and improve our overall value perception among consumers at existing stores.
Current report
Our sales yield for the thirteen weeks ended September 28, 2024 was $1.45, compared to $1.50 for the thirteen weeks ended September 30, 2023. The 3.3% decline in sales yield primarily reflects a decrease in items sold per pound processed in Canada and the U.S., partially offset by higher price points on items sold in the U.S.
Current report
Retail net sales increased by $1.6 million, or 0.4%, during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023. The 0.4% increase in retail sales resulted from the opening of 16 net new stores year-over-year, offset by a 2.4% decrease in comparable store sales and the unfavorable impact of foreign currency.
Current report
Cost of merchandise sold increased by $12.5 million, or 7.9%, during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023.
Current report
Cost of merchandise sold increased 300 basis pointsto 43.3% of net sales during the thirteen weeks ended September 28, 2024. The 300 basis point increase primarily reflects deleverage of cost of merchandise sold as a percentage of net sales on comparable store sales and the impact of new stores.
Current report
Personnel costs for our corporate employees decreased by $43.0 million during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023, primarily reflecting a $39.8 million decrease in IPO-related stock-based compensation expense. The remaining $3.2 million decrease primarily reflects a reduction to annual incentive plan expense, partially offset by higher non-IPO-related stock-based compensation expense and higher wages.
Current report
Gain (loss) on foreign currency, net
Current report
The following table presents gain (loss) on foreign currency, net:
Current report
During the thirteen weeks ended September 30, 2023, the USD strengthened against CAD resulting in remeasurement losses of $7.7 million arising primarily on USD-denominated debt held by one of our Canadian entities, which was largely offset by $7.5 million in gains on derivative instruments that we used to manage foreign currency exchange rate risk.
Current report
Other expense, net
Current report
The following table presents other expense, net:
Current report
During the thirteen weeks ended September 30, 2023, we used the net proceeds from our IPO and cash on our balance sheet to redeem$55.0 million aggregate principal amount of Senior Secured Notes and to repay$252.4 million aggregate principal amount of outstanding borrowings under the Term Loan Facility, resulting in a loss on debt extinguishment of$10.6 million.
Current report
U.S. Retail segment profit decreased by $8.5 million, or 16.3%, during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023. The decrease in segment profit primarily reflects the impact of new stores, including salaries, wages and benefits and store preopening expenses, as well as deleverage of cost of merchandise sold as a percentage of net sales on comparable store sales, partially offset by an increase in net sales.
Current report
Thirty-Nine Weeks Ended September 28, 2024 compared to the Thirty-Nine Weeks Ended September 30, 2023
Current report
Cost of merchandise sold increased by $32.6 million, or 7.1%, during the thirty-nine weeks ended September 28, 2024, compared to the thirty-nine weeks ended September 30, 2023.
Current report
Salaries, wages and benefits expense decreased by $27.2 million, or 9.9%, during the thirty-nine weeks ended September 28, 2024, compared to the thirty-nine weeks ended September 30, 2023.
Current report
Gain on foreign currency, net
Current report
The following table presents gain on foreign currency, net:
Current report
Although the USD strengthened marginally against CAD during the thirty-nine weeks ended September 30, 2023, remeasurement gains recorded during the twenty-six weeks ended July 1, 2023 more than offset remeasurement losses recorded in thethirteen weeks ended September 30, 2023. This dynamic reflectsthe repayments of principal totaling $269.2 million that we made during thethirty-nine weeks ended September 30, 2023 on our USD-denominated debt held by one of our Canadian entities - which is the primary driver of foreign currency remeasurement gains and losses. We also recorded $2.9 million in gains on derivative instruments that we use to manage foreign currency exchange rate risk.
Current report
Loss on extinguishment of debt
Current report
During thethirty-nine weeks ended September 30, 2023, the Company used net proceeds from its IPO and net proceeds from issuing $550.0 million aggregate principal amount of Senior Secured Notes and cash on hand to repay $485.8 million in outstanding borrowings on its Term Loan Facility and $55.0 million aggregate principal amount of its Senior Secured Notes, resulting in a loss on debt extinguishment of $16.6 million.
Current report
U.S. Retail segment profit decreased by $9.7 million, or 6.6%, during the thirty-nine weeks ended September 28, 2024, compared to the thirty-nine weeks ended September 30, 2023. The decrease in segment profit primarily reflects the impact of new stores, including salaries, wages and benefits and store preopening expenses, deleverage of cost of merchandise sold as a percentage of net sales on comparable store sales, the impact of new offsite processing facilities, as well as an increase in occupancy costs, partially offset by an increase in net sales and reduced expenditures on repairs and maintenance.
Current report
(7)The thirteen and thirty-nine weeks ended September 28, 2024 include a change in the fair value of acquisition-related contingent consideration of $1.5 million and $1.4 million, respectively. The thirty-nine weeks ended September 28, 2024 further includes insurance proceeds of $0.7 million. The thirteen and thirty-nine weeks ended September 30, 2023 include legal and insurance proceeds of $0.4 million and $0.9 million, respectively.
Current report
(9)For the thirteen weeks ended September 30, 2023, Adjusted net income per diluted share includes 6.6 million potential shares of common stock relating to awards of stock options and restricted stock units that were excluded from the calculation of GAAP diluted net loss per share as their inclusion would have had an antidilutive effect.
Current report
Thirty-Nine Weeks Ended September 28, 2024 compared to the Thirty-Nine Weeks Ended September 30, 2023
Current report
Net cash provided by operating activities for the thirty-nine weeks ended September 28, 2024 was $78.4 million, compared to $104.4 million for the thirty-nine weeks ended September 30, 2023, a decrease of $26.0 million. This $26.0 million decrease is primarily due to an $18.6 million increase in income taxes paid, net and a $7.9 million decrease in operating income.
Removed paragraphs (29)
Previous report
•Comparable store sales decreased 0.1%, with the U.S. increasing 2.1% and Canada decreasing 3.1%.
Previous report
•During the second quarter, the Company opened four new stores and also added seven stores through the acquisition of 2 Peaches Group, LLC (“2 Peaches”), ending the second quarter with 337 stores.
Previous report
On a currency neutral and comparable store sales basis, our sales yield for the twenty-six weeks ended June 29, 2024 was consistent with the twenty-six weeks ended July 1, 2023 at $1.44.
Previous report
Cost of merchandise sold increased by $7.7 million, or 5.0%, during the thirteen weeks ended June 29, 2024, compared to the thirteen weeks ended July 1, 2023.
Previous report
Cost of merchandise sold increased 120 basis pointsto 42.1% of net sales during the thirteen weeks ended June 29, 2024. The 120 basis pointi ncrease in cost of merchandise sold primarily reflects the impact of new stores and new offsite processing facilities, as well as deleverage on lower sales in Canada, partially offset by improving efficiencies at existing offsite processing facilities.
Previous report
Personnel costs for our corporate employees increased by $21.0 million during the thirteen weeks ended June 29, 2024, compared to the thirteen weeks ended July 1, 2023. Adjusting for the $19.7 million of IPO-related stock-based compensation incurred during the thirteen weeks ended June 29, 2024, personnel costs for our corporate employees increased $1.2 million.
Previous report
(Loss) gain on foreign currency, net
Previous report
The following table presents (loss) gain on foreign currency, net:
Previous report
n/m – not meaningful
Previous report
During the thirteen weeks ended July 1, 2023, the U.S. dollar weakened against the Canadian dollar resulting in remeasurement gains of $9.7 million arising primarily on USD-denominated debt held by one of our Canadian entities, which was only partially offset by $5.2 million in losses on derivative instruments used to manage foreign currency exchange rate risk.
Previous report
U.S. Retail segment profit decreased by $0.5 million, or 0.9%, during the thirteen weeks ended June 29, 2024, compared to the thirteen weeks ended July 1, 2023. The decrease in segment profit primarily reflects expenses related to new store growth, including preopening expenses, which were partially offset by an increase in net sales. Cost of merchandise sold as a percentage of net sales was consistent for the thirteen weeks ended June 29, 2024 compared to the thirteen weeks ended July 1, 2023, primarily reflecting improving efficiencies at existing offsite processing facilities, offset by the impact of new stores and new offsite processing facilities.
Previous report
Twenty-Six Weeks Ended June 29, 2024 compared to the Twenty-Six Weeks Ended July 1, 2023
Previous report
Retail sales increased by $16.9 million, or 2.5%, during the twenty-six weeks ended June 29, 2024, compared to the twenty-six weeks ended July 1, 2023. The 2.5% increase in retail sales resulted primarily from the opening of 12 new stores year-over-year and a 0.1% increase in comparable store sales, partially offset by the unfavorable impact of foreign currency during the twenty-six weeks ended June 29, 2024.
Previous report
Cost of merchandise sold increased by $20.1 million, or 6.7%, during the twenty-six weeks ended June 29, 2024, compared to the twenty-six weeks ended July 1, 2023.
Previous report
Salaries, wages and benefits expense increased by $14.7 million, or 9.2%, during the twenty-six weeks ended June 29, 2024, compared to the twenty-six weeks ended July 1, 2023.
Previous report
(Loss) gain on foreign currency, net
Previous report
The following table presents (loss) gain on foreign currency, net:
Previous report
n/m – not meaningful
Previous report
During the twenty-six weeks ended July 1, 2023 the U.S. dollar weakened against the Canadian dollar resulting in remeasurement gains of $10.4 million arising primarily on USD-denominated debt held by one of our Canadian entities, which were partially offset by $4.6 million in losses on derivative instruments used to manage foreign currency exchange rate risk.
Previous report
Other income, net
Previous report
In connection with the issuance of our Senior Secured Notes on February 6, 2023, we prepaid $233.4 million of outstanding borrowings under the Term Loan Facility, which resulted in a loss on debt extinguishment of $6.0 million during thetwenty-six weeks ended July 1, 2023.
Previous report
U.S. Retail segment profit decreased by $1.2 million, or 1.2%, during the twenty-six weeks ended June 29, 2024, compared to the twenty-six weeks ended July 1, 2023. The decrease in segment profit primarily reflects an increase in cost of goods sold as a percentage of net sales driven by the impact of new stores and new offsite processing facilities, partially offset by improving efficiencies at existing offsite processing facilities. In addition, the decrease in U.S. Retail segment profit reflects higher expenses related to new store growth, including preopening expenses, which were partially offset by an increase in net sales.
Previous report
(7)The thirteen and twenty-six weeks ended June 29, 2024 includes insurance proceeds of $0.7 million. The twenty-six weeks ended July 1, 2023 includes legal settlement proceeds of $0.5 million.
Previous report
Twenty-Six Weeks Ended June 29, 2024 compared to the Twenty-Six Weeks Ended July 1, 2023
Previous report
Net cash provided by operating activities was $54.6 million for the twenty-six weeks ended June 29, 2024, resulting from net income of $9.2 million and a net decrease of $77.0 million related to our operating assets and liabilities, which was offset by non-cash charges of $122.3 million. Net cash used in operating activities for the twenty-six weeks ended June 29, 2024 increased by $0.8 million, compared to the twenty-six weeks ended July 1, 2023.
Previous report
The $0.8 million increase is primarily due to the $24.1 million special one-time bonus and related taxes paid in conjunction with the February 2023 dividend payment during the twenty-six weeks ended July 1, 2023, partially offset by a $12.0 million increase in taxes paid during the twenty-six weeks ended June 29, 2024 and a $5.5 million increase in interest paid on debt during the twenty-six weeks ended June 29, 2024. We also experienced additional net cash outflows from operating activities related to movements in our working capital balances during the quarter, which were not individually significant.
Previous report
Non-cash charges during the twenty-six weeks ended June 29, 2024 primarily consisted of $63.6 million of operating lease expense, $40.8 million of stock-based compensation expense, $35.7 million of depreciation and amortization expense, and $4.1 million loss on extinguishment of debt, which was partially offset by a $20.6 million benefit in deferred income taxes, net and $1.2 million of other non-cash items.
Previous report
Net cash provided by operating activities was $53.8 million for the twenty-six weeks ended July 1, 2023, resulting from net income of $24.9 million and a net decrease of $64.1 million related to our operating assets and liabilities, which was offset by non-cash charges of $93.0 million.
Previous report
Non-cash charges during the twenty-six weeks ended July 1, 2023 primarily consisted of $58.3 million of operating lease expense, $29.2 million of depreciation and amortization expense, partially offset by $10.8 million of other non-cash items
Reworded paragraphs (64)
Previous wording
We are the largest for-profit thrift operator in the United States (“U.S.”) and Canada and operate a total of 337 stores under the Savers®, Value Village®, Value Village Boutique™, Village des Valeurs™, 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”) either directly from them or via on-site donations (“OSDs”) at Community Donation Centers (“CDCs”) at our stores as well as through GreenDrop’s mobile donation stations. We then process, select, price, merchandise and sell these items in our stores. Items that are not sold to our retail customers 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 ESG principles, 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 are sold to our retail or wholesale customers.
Current wording
We are the largest for-profit thrift operator in the United States (“U.S.”) and Canada and operate a total of 344 stores under the Savers®, Value Village®, Value Village Boutique™, Village des Valeurs™, 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”) either directly from them or via on-site donations (“OSDs”) at Community Donation Centers (“CDCs”) at our stores as well as through GreenDrop’s mobile donation stations. We then process, select, price, merchandise and sell these items in our stores. Items that are not sold to our retail customers 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 ESG principles, 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 are sold to our retail or wholesale customers.
Previous wording
We offer a dynamic, ever-changing selection of items, with an average unit retail (“AUR”) price of approximately $5. Our most engaged customers are members of our Super Savers Club® loyalty program. As of June 29, 2024, we had 5.7 million total active members enrolled in our U.S. and Canadian loyalty programs each of whom have made a purchase within the last 12 months, compared to 5.1 million total active members as of July 1, 2023. Active members drove 71.5% of point-of-sale transaction value during the twelve months ended June 29, 2024, compared to 69.6% of point-of-sale transaction value during the twelve months ended July 1, 2023. Beginning in the third quarter of fiscal 2023, the Company updated its active loyalty member statistics to include all stores. Active loyalty member statistics for prior years reflect this update.
Current wording
We offer a dynamic, ever-changing selection of items, with an average unit retail (“AUR”) price of approximately $5. Our most engaged customers are members of our Super Savers Club® loyalty program. As of September 28, 2024, we had 5.8 million total active members enrolled in our U.S. and Canadian loyalty programs each of whom have made a purchase within the last 12 months, compared to 5.2 million total active members as of September 30, 2023. Active members drove 71.9% of point-of-sale transaction value during the twelve months ended September 28, 2024, compared to 69.9% of point-of-sale transaction value during the twelve months ended September 30, 2023.
Previous wording
The following highlights our financial results for the thirteen weeks ended June 29, 2024 (the “second quarter”):
Current wording
The following highlights our financial results for the thirteen weeks ended September 28, 2024 (the “third quarter”) (comparisons are to the thirteen weeks ended September 30, 2023):
Previous wording
•Net sales increased 2.0% to $386.7 million, with the U.S. up 5.4% and Canada down 2.4%. Constant currency net sales increased 2.8% to $389.7 million.
Current wording
•Net sales increased 0.5% to $394.8 million, with the U.S. up 6.2% and Canada down 7.1%. Constant currency net sales increased 1.2% to $397.3 million.
Previous wording
•Net income and Adjusted net income were $9.7 million and $23.7 million, respectively. Net income per diluted share and Adjusted net income per diluted share were $0.06 and $0.14, respectively. Net income margin was 2.5%.
Current wording
•Net income and Adjusted net income were $21.7 million and $25.1 million, respectively. Net income per diluted share and Adjusted net income per diluted share were $0.13 and $0.15, respectively. Net income margin was 5.5%.
Previous wording
•Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $80.0 million and Adjusted EBITDA margin was 20.7%. Changes in foreign currency rates negatively impacted Adjusted EBITDA by $0.8 million during the second quarter.
Current wording
•Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $82.0 million and Adjusted EBITDA margin was 20.8%. Changes in foreign currency rates negatively impacted Adjusted EBITDA by $0.8 million during the third quarter.
Previous wording
On May 6, 2024, the Company acquired all of the equity of 2 Peaches for $5.4 million, which primarily 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. Goodwill arising from the acquisition amounted to less than $0.1 million.
Current wording
On May 6, 2024, the Company acquired all of the equity of 2 Peaches Group, LLC (“2 Peaches”) for $5.4 million, which is 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. Goodwill arising from the acquisition amounted to less than $0.1 million.
Previous wording
During the thirteen and twenty-six weeks ended June 29, 2024, under our share repurchase program announced in November 2023, we repurchased 0.3 million shares at a total cost of approximately $3.3 million, of which $0.5 million was paid subsequent to June 29, 2024. As of June 29, 2024, the Company had $46.7 million remaining under the share repurchase program.
Current wording
During the thirteen and thirty-nine weeks ended September 28, 2024, under our share repurchase program announced in November 2023, we repurchased 1.8 million and 2.1 million shares, respectively, at a total cost of $17.6 million and $20.9 million, respectively. As of September 28, 2024, the Company had $29.1 million remaining under the share repurchase program.
Previous wording
During the thirteen weeks ended June 29, 2024, our comparable store sales declined 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 thirteen weeks ended July 1, 2023, our comparable store sales increased 5.5%, primarily reflecting higher transactions.
Current wording
During the thirteen weeks ended September 28, 2024, our comparable store sales declined 2.4%, primarily reflecting a decrease in transactions in our Canada Retail segment, partially offset by higher transactions and average basket in our U.S. Retail segment. During the thirteen weeks ended September 30, 2023, our comparable store sales increased 3.7%, primarily reflecting growth in transactions.
Previous wording
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. During the twenty-six weeks ended July 1, 2023, our comparable store sales increased 6.3%, primarily reflecting higher transactions.
Current wording
During the thirty-nine weeks ended September 28, 2024, our comparable store sales declined 0.7%, primarily reflecting a decrease in transactions in our Canada Retail segment, partially offset by higher transactions and average basket in our U.S. Retail segment. During the thirty-nine weeks ended September 30, 2023, our comparable store sales increased 5.4%, primarily reflecting growth in transactions.
Previous wording
Our number of stores increased to 337 stores as of June 29, 2024, from 318 stores as of July 1, 2023. The increase in stores resulted from the opening of six new stores in the U.S., five new stores in Canada and one new store in Australia, as well as the addition of seven stores through the 2 Peaches Acquisition.
Current wording
Our number of stores increased to 344 stores as of September 28, 2024, from 321 stores as of September 30, 2023. The increase in stores resulted from the opening of eight net new stores in the U.S., seven net new stores in Canada and one new store in Australia, as well as the addition of seven stores through the 2 Peaches Acquisition.
Previous wording
During the thirteen weeks ended June 29, 2024, we processed 254 million pounds of supply, of which 78.3% was comprised of supply from OSDs and GreenDrop. During the thirteen weeks ended July 1, 2023, we processed 246 million pounds of supply, of which 76.4% was comprised of supply from OSDs and GreenDrop.
Current wording
During the thirteen weeks ended September 28, 2024, we processed 261 million pounds of supply, of which 79.8% was comprised of supply from OSDs and GreenDrop. During the thirteen weeks ended September 30, 2023, we processed 249 million pounds of supply, of which 77.9% was comprised of supply from OSDs and GreenDrop.
Previous wording
During thetwenty-six weeks ended June 29, 2024, we processed 492 million pounds of supply, of which 75.2% was comprised of supply from OSDs and GreenDrop. Duringthe twenty-six weeks ended July 1, 2023, we processed 485 million pounds of supply, of which 72.4% was comprised of supply from OSDs and GreenDrop.
Current wording
During thethirty-nine weeks ended September 28, 2024, we processed 753 million pounds of supply, of which 76.8% was comprised of supply from OSDs and GreenDrop. Duringthe thirty-nine weeks ended September 30, 2023, we processed 734 million pounds of supply, of which 74.4% was comprised of supply from OSDs and GreenDrop.
Previous wording
On a currency neutral and comparable store sales basis, our sales yield for the thirteen weeks ended June 29, 2024 was $1.46, compared to $1.49 for the thirteen weeks ended July 1, 2023. The 2.0% decline in sales yield primarily reflects a decrease in items sold per pound processed in Canada.
Current wording
Our sales yield for the thirty-nine weeks ended September 28, 2024 was $1.44, compared to $1.46 for the thirty-nine weeks ended September 30, 2023. The 1.4% decline in sales yield primarily reflects a decrease in items sold per pound processed in Canada.
Previous wording
Cost of merchandise sold per pound processed during the twenty-six weeks ended June 29, 2024 was $0.65, compared to $0.62 for the twenty-six weeks ended July 1, 2023, primarily reflecting the impact of new stores and new offsite processing facilities, partially offset by improving efficiencies at existing offsite processing facilities.
Current wording
Cost of merchandise sold per pound processed during the thirteen weeks ended September 28, 2024 was $0.65, compared to $0.64 for the thirteen weeks ended September 30, 2023.
Previous wording
Cost of merchandise sold per pound processed during the thirteen weeks ended June 29, 2024 was $0.64, compared to $0.63 for the thirteen weeks ended July 1, 2023.
Current wording
Cost of merchandise sold per pound processed during the thirty-nine weeks ended September 28, 2024 was $0.65, compared to $0.63 for the thirty-nine weeks ended September 30, 2023.
Previous wording
Personnel costs classified within cost of merchandise sold were $96.7 million during the thirteen weeks ended June 29, 2024, compared to $94.2 million during the thirteen weeks ended July 1, 2023. As a percentage of net sales, personnel costs classified within cost of merchandise sold was 25.0% during the thirteen weeks ended June 29, 2024, compared to 24.8% during the thirteen weeks ended July 1, 2023.
Current wording
Personnel costs classified within cost of merchandise sold were $99.8 million during the thirteen weeks ended September 28, 2024, compared to $96.4 million during the thirteen weeks ended September 30, 2023. As a percentage of net sales, personnel costs classified within cost of merchandise sold was 25.3% during the thirteen weeks ended September 28, 2024, compared to 24.5% during the thirteen weeks ended September 30, 2023. The $3.4 million increase in personnel costs resulted primarily from 16 net new stores year-over-year, the opening of new offsite processing facilities and higher wages.
Previous wording
Beginning in the second quarter of fiscal 2024, we have updated the way we define personnel costs classified within cost of merchandise sold that impacts the comparability of prior periods. Specifically, we have updated personnel costs classified within cost of merchandise sold to include offsite processing production labor due to the continued growth of offsite processing. Historically, these costs were included in other costs classified within cost of merchandise sold. Personnel costs classified within cost of merchandise sold for prior years reflects this updated definition. This update has no impact on total cost of merchandise sold for any period presented.
Current wording
Beginning in the second quarter of fiscal 2024, we have updated the way we define personnel costs classified within cost of merchandise sold and have recast the prior period accordingly. This update had no impact on the total cost of merchandise sold. Specifically, we have updated personnel costs classified within cost of merchandise sold to include offsite processing production labor due to the continued growth of offsite processing. Historically, these costs were included in other costs classified within cost of merchandise sold.
Previous wording
Salaries, wages and benefits expense increased by $23.6 million, or 35.1%, during thethirteen weeks ended June 29, 2024, compared to thethirteen weeks ended July 1, 2023.
Current wording
Salaries, wages and benefits expense decreased by $41.9 million, or 36.1%, during thethirteen weeks ended September 28, 2024, compared to thethirteen weeks ended September 30, 2023.
Previous wording
Personnel costs for our retail and wholesale operations increased by$2.6 million during the thirteen weeks ended June 29, 2024, compared to the thirteen weeks ended July 1, 2023. The increase primarily reflects growth in our store base year-over-year, as well as higher wage rates.
Current wording
Personnel costs for our retail and wholesale operations increased by$1.1 million, or 2.3%, during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023.
Previous wording
The following table presents selling, general and administrative expenses:
Current wording
The following table presents selling, general and administrative expenses (“SG&A”):
Previous wording
SG&A increased by $10.2 million, or 14.0%, during the thirteen weeks ended June 29, 2024, compared to the thirteen weeks ended July 1, 2023. The increase in SG&A resulted primarily from a $6.6 million increase in rent and utilities driven by growth in our store base and store preopening expenses, and a $4.8 million increase in other expenses which includes investments in information technology and an increase in general store expenses.
Current wording
SG&A increased by $1.8 million, or 2.2%, during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023. The increase in SG&A resulted primarily from a $5.5 million increase in rent and utilities that was driven by growth in our store base and store preopening expenses, partially offset by reduced expenditures on repairs and maintenance and professional services of $1.6 million and $1.5 million, respectively.
Previous wording
Depreciation and amortization during the thirteen weeks ended June 29, 2024 increased by $2.7 million, or 18.3%, compared to the thirteen weeks ended July 1, 2023. The increase in depreciation and amortization resulted primarily from investments in our store build-outs, CPCs and Automatic Book Processing systems (“ABPs”), as well as capital expenditures related to capital maintenance.
Current wording
Depreciation and amortization during the thirteen weeks ended September 28, 2024 increased by $1.4 million, or 8.7%, compared to the thirteen weeks ended September 30, 2023. The increase in depreciation and amortization resulted primarily from investments in our store build-outs, Centralized Processing Centers (“CPCs”) and Automatic Book Processing systems (“ABPs”), as well as capital expenditures related to capital maintenance.
Previous wording
Total interest expense, net decreased $20.4 million, or 39.0%, during the twenty-six weeks ended June 29, 2024, compared to the twenty-six weeks ended July 1, 2023. This $20.4 million decrease resulted primarily from a $19.3 million decrease in interest expense, net, which was primarily due to a lower weighted average face value of debt and to a lesser extent, a decrease in the weighted average interest rate. The weighted average face value of debt decreased 26.7% from $1.07 billion during the twenty-six weeks ended July 1, 2023 to $784.2 million during the twenty-six weeks ended June 29, 2024 primarily due to the timing of debt issuance and debt repayments. Over the same period, the weighted average interest rate decreased 69 basis points from 10.25% to 9.56%. This decrease was primarily due to the execution of the Third Amendment to our Senior Secured Credit Facilities on January 30, 2024, which lowered the total margin on existing borrowings under the Term Loan Facility by 151 basis points.
Current wording
Total interest expense, net decreased $3.2 million, or 17.3%, during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023. This $3.2 million decrease resulted primarily from a $3.6 million decrease in interest expense, net, which 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 7.8% from $828.7 million during the thirteen weeks ended September 30, 2023 to $764.2 million during the thirteen weeks ended September 28, 2024 due to debt repayments. Over the same period, the weighted average interest rate decreased 69 basis points from 10.16% to 9.47%. This decrease was primarily due to the execution of the Third Amendment to our Senior Secured Credit Facilities on January 30, 2024, which lowered the total margin on existing borrowings under the Term Loan Facility by 151 basis points.
Previous wording
Gains and losses on foreign currency relate primarily to movements in the Canadian dollar (“CAD”) relative to the U.S. dollar (“USD”). During the twenty-six weeks ended June 29, 2024, USD strengthened against CAD resulting remeasurement losses of $10.0 million arising primarily on USD-denominated debt held by one of our Canadian entities. These losses were largely offset by an $8.1 million gain on derivative instruments used to manage foreign currency exchange rate risk, substantially all of which arose on cross currency swaps prior to their termination in April 2024.
Current wording
Gains and losses on foreign currency relate primarily to movementsin the Canadian Dollar (“CAD”) relative to the U.S. Dollar (“USD”). During the thirteen weeks ended September 28, 2024, the USD weakened against CAD resulting in remeasurement gains of $3.6 million arising primarily on USD-denominated debt held by one of our Canadian entities. These gains were partially offset by a $1.2 million loss on derivative instruments used to manage foreign currency exchange rate risk.
Previous wording
During the thirteen weeks ended June 29, 2024, we recorded income taxexpenseof $6.3 million on income before income taxesof $16.0 million, resulting in an effective tax rateof 39.3%. For the thirteen weeks ended July 1, 2023, we recorded $11.0 million of income tax expense on income before income taxes of $46.1 million, resulting in an effective income tax rate of 23.9%.
Current wording
During the thirteen weeks ended September 28, 2024, we recorded income taxexpenseof $13.8 million on income before income taxesof $35.4 million, resulting in an effective tax rateof 38.8%. For the thirteen weeks ended September 30, 2023, we recorded $6.4 million of income tax expense on loss before income taxes of $9.2 million, resulting in an effective income tax rate of (69.4)%.
Previous wording
We estimate an annual projected effective tax rate for the fiscal year to determine income tax expense or benefit in the interim periods. As such, the increase in our effective income tax rate during the thirteen weeks ended June 29, 2024 compared to the thirteen weeks ended July 1, 2023 resulted primarily from a change in annual forecasted income before income taxes and its related impact on the annual effective tax rate.
Current wording
We estimate an annual projected effective tax rate for the fiscal year to determine income tax expense or benefit in the interim periods. As such, the increase in our effective income tax rate during the thirteen weeks ended September 28, 2024 compared to the thirteen weeks ended September 30, 2023 resulted primarily from an increase in income before income taxes to which the annual effective tax rate is applied.
Previous wording
U.S. Retail net sales increased by $10.6 million, or 5.4%, during the thirteen weeks ended June 29, 2024, compared to the thirteen weeks ended July 1, 2023. The increase in U.S. Retail net sales resulted primarily from a 2.1% increase in comparable store sales and the opening of six new stores year-over year. The increase in comparable store sales was driven by higher transactions and average basket.
Current wording
U.S. Retail net sales increased by $12.3 million, or 6.2%, during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023. The increase in U.S. Retail net sales resulted primarily from the opening of eight net new stores year-over-year and a 1.6% increase in comparable store sales. The increase in comparable store sales was driven by higher transactions and average basket.
Previous wording
Canada Retail net sales decreased by $3.7 million, or 2.4%, during the thirteen weeks ended June 29, 2024, compared to the thirteen weeks ended July 1, 2023. The decrease in Canada Retail net sales resulted primarily from a 3.1% decline in comparable store sales, partially offset by the opening of five new stores year-over-year and the unfavorable impact of foreign currency during the thirteen weeks ended June 29, 2024. The decline in comparable store sales was driven by a decrease in transactions and average basket, partially offset by an approximate 100 basis point favorable impact due to the shift of Canada Day out of the thirteen weeks ended June 29, 2024 and into the third quarter of fiscal 2024.
Current wording
Canada Retail net sales decreased by $11.6 million, or 7.1%, during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023. The decrease in Canada Retail net sales resulted primarily from a 7.5% decline in comparable store sales and the unfavorable impact of foreign currency, partially offset by the opening of seven net new stores since September 30, 2023. The decline in comparable store sales was primarily driven by a decrease in transactions and was negatively impacted by a timing shift in the Canada Day holiday by approximately 100 basis points during the thirteen weeks ended September 28, 2024.
Previous wording
Canada Retail segment profit decreased by $6.5 million, or 13.0%, during the thirteen weeks ended June 29, 2024, compared to the thirteen weeks ended July 1, 2023. The decrease in segment profit primarily reflects a decline in net sales and an increase in cost of merchandise sold as a percentage of net sales driven by the impact of new stores and new offsite processing facilities, as well as deleverage on lower sales, partially offset by improving efficiencies at existing offsite processing facilities.
Current wording
Canada Retail segment profit decreased by $11.1 million, or 19.6%, during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023. The decrease in segment profit primarily reflects a decline in net sales and deleverage of cost of merchandise sold as a percentage of net sales on comparable store sales.
Previous wording
Other includes our Australian retail stores and our wholesale operations. Net sales for our other business increased$0.6 million and segment profit decreased $3.4 million during the thirteen weeks ended June 29, 2024.
Current wording
Other includes our Australian retail stores and our wholesale operations. Net sales and segment profit for our other business increased$1.4 million and$1.8 million, respectively, during the thirteen weeks ended September 28, 2024, compared to the thirteen weeks ended September 30, 2023.
Previous wording
Retail net sales increased by $7.5 million, or 2.1%, during the thirteen weeks ended June 29, 2024, compared to the thirteen weeks ended July 1, 2023. The 2.1% increase in retail sales resulted primarily from the opening of 12 new stores year-over-year, partially offset by a 0.1% decrease in comparable store sales and the unfavorable impact of foreign currency during thethirteen weeks ended June 29, 2024.
Current wording
Retail sales increased by $18.5 million, or 1.7%, during the thirty-nine weeks ended September 28, 2024, compared to the thirty-nine weeks ended September 30, 2023. The 1.7% increase in retail sales resulted from the opening of 16 net new stores year-over-year, partially offset by a 0.7% decrease in comparable store sales and the unfavorable impact of foreign currency.
Previous wording
Cost of merchandise sold increased 180 basis points to 43.3% of net sales during the twenty-six weeks ended June 29, 2024. The 180 basis point increase primarily reflects the impact of new stores and new offsite processing facilities, partially offset by improving efficiencies at existing offsite processing facilities.
Current wording
Cost of merchandise sold increased 220 basis points to 43.3% of net sales during the thirty-nine weeks ended September 28, 2024. The 220 basis point increase primarily reflects deleverage of cost of merchandise sold as a percentage of net sales on comparable store sales, and the impact of new stores and new offsite processing facilities.
Previous wording
Personnel costs classified within cost of merchandise sold were $192.4 million during the twenty-six weeks ended June 29, 2024, compared to $185.3 million during the twenty-six weeks ended July 1, 2023. As a percentage of net sales, personnel costs classified within cost of merchandise sold was 26.0% during the twenty-six weeks ended June 29, 2024, compared to 25.6% during the twenty-six weeks ended July 1, 2023.
Current wording
Personnel costs classified within cost of merchandise sold were $292.2 million during the thirty-nine weeks ended September 28, 2024, compared to $281.7 million during the thirty-nine weeks ended September 30, 2023. As a percentage of net sales, personnel costs classified within cost of merchandise sold was 25.7% during the thirty-nine weeks ended September 28, 2024, compared to 25.2% during the thirty-nine weeks ended September 30, 2023. The $10.5 million increase in personnel costs resulted primarily from 16 net new stores year-over-year, the opening of new offsite processing facilities and higher wages.
Previous wording
Beginning in the second quarter of fiscal 2024, we have updated the way we define personnel costs classified within cost of merchandise sold that impacts the comparability of prior periods. Specifically, we have updated personnel costs classified within cost of merchandise sold to include offsite processing production labor due to the continued growth of offsite processing. Historically, these costs were included in other costs classified within cost of merchandise sold. Personnel costs classified within cost of merchandise sold for prior years reflects this updated definition. This update has no impact on total cost of merchandise sold for any period presented.
Current wording
Beginning in the second quarter of fiscal 2024, we have updated the way we define personnel costs classified within cost of merchandise sold and have recast the prior period accordingly. This update had no impact on the total cost of merchandise sold. Specifically, we have updated personnel costs classified within cost of merchandise sold to include offsite processing production labor due to the continued growth of offsite processing. Historically, these costs were included in other costs classified within cost of merchandise sold.
Previous wording
Personnel costs for our retail and wholesale operations increased by $2.6 million, or 2.7%, during the twenty-six weeks ended June 29, 2024, compared to the twenty-six weeks ended July 1, 2023. The increase primarily reflects growth in our store base year-over-year, as well as higher wage rates and benefits, partially offset by a reduction to annual incentive plan expense.
Current wording
Personnel costs for our retail and wholesale operations increased by $3.7 million, or 2.6%, during the thirty-nine weeks ended September 28, 2024, compared to the thirty-nine weeks ended September 30, 2023. The increase primarily reflects growth in our store base year-over-year, as well as higher wages and benefits, partially offset by a reduction to annual incentive plan expense.
Previous wording
Personnel costs for our corporate employees increased by $12.1 million, or 18.9%. Adjusting for the $37.7 million of IPO-related stock-based compensation incurred during thetwenty-six weeks ended June 29, 2024 and the $24.1 million special one-time bonus and related taxes incurred during thetwenty-six weeks ended July 1, 2023 in relation to the issuance of our Senior Secured Notes, personnel costs for our corporate employees decreased $1.6 million primarily reflecting a reduction to annual incentive plan expense, partially offset by higher wage rates, stock-based compensation expense and severance costs.
Current wording
Personnel costs for our corporate employees decreased by $31.0 million, or 23.7%. Adjusting for the $24.1 million special one-time bonus and related taxes incurred during thethirty-nine weeks ended September 30, 2023 in relation to the issuance of our Senior Secured Notes, personnel costs for our corporate employees decreased $6.9 million primarily reflecting a reduction to annual incentive plan expense, partially offset by higher wages.
Previous wording
SG&A increased by $10.9 million, or 7.3%, during the twenty-six weeks ended June 29, 2024, compared to the twenty-six weeks ended July 1, 2023. The increase in SG&A resulted primarily from a $7.1 million increase in rent and utilities driven by growth in our store base and store preopening expenses, and a $6.7 million increase in other expenses which includes investments in information technology and an increase in store expenses. These increases were partially offset by a $3.0 million decrease in repairs and maintenance reflecting reduced store maintenance activities.
Current wording
SG&A increased by $12.7 million, or 5.5%, during the thirty-nine weeks ended September 28, 2024, compared to the thirty-nine weeks ended September 30, 2023. The increase in SG&A resulted primarily from a $12.6 million increase in rent and utilities driven by growth in our store base and store preopening expenses, and a $3.7 million increase in information technology expenses. These increases were partially offset by reduced expenditures on repairs and maintenance of $4.6 million.
Previous wording
Depreciation and amortization during the twenty-six weeks ended June 29, 2024 increased by $6.5 million, or 22.3%, compared to the twenty-six weeks ended July 1, 2023. The increase in depreciation and amortization resulted primarily from investments in our store build-outs, CPCs and ABPs, as well as capital expenditures related to capital maintenance.
Current wording
Depreciation and amortization during the thirty-nine weeks ended September 28, 2024 increased by $7.9 million, or 17.5%, compared to the thirty-nine weeks ended September 30, 2023. The increase in depreciation and amortization resulted primarily from investments in our store build-outs, CPCs and ABPs, as well as capital expenditures related to capital maintenance.
Previous wording
Total interest expense, net decreased $12.0 million, or 43.1%, during the thirteen weeks ended June 29, 2024, compared to the thirteen weeks ended July 1, 2023. This $12.0 million decrease resulted primarily from a $11.6 million decrease in interest expense, net, which was primarily due to a lower weighted average face value of debt and to a lesser extent, a decrease in the weighted average interest rate. The weighted average face value of debt decreased 32.2% from $1.13 billion during the thirteen weeks ended July 1, 2023 to $765.7 million during the thirteen weeks ended June 29, 2024 primarily due to the timing of debt issuance and debt repayments. Over the same period, the weighted average interest rate decreased 90 basis points from 10.36% to 9.46%. This decrease was primarily due to the execution of the Third Amendment to our Senior Secured Credit Facilities on January 30, 2024, which lowered the total margin on existing borrowings under the Term Loan Facility by 151 basis points.
Current wording
Total interest expense, net decreased $23.6 million, or 33.3%, during the thirty-nine weeks ended September 28, 2024, compared to the thirty-nine weeks ended September 30, 2023. This $23.6 million decrease resulted primarily from a $22.9 million decrease in interest expense, net, which was primarily due to a lower weighted average face value of debt and to a lesser extent, a decrease in the weighted average interest rate. The weighted average face value of debt decreased 21.2% from $986.8 million during the thirty-nine weeks ended September 30, 2023 to $777.5 million during the thirty-nine weeks ended September 28, 2024 primarily due to the timing of debt issuance and debt repayments. Over the same period, the weighted average interest rate decreased 62 basis points from 10.18% to 9.56%. This decrease was primarily due to the execution of the Third Amendment to our Senior Secured Credit Facilities on January 30, 2024, which lowered the total margin on existing borrowings under the Term Loan Facility by 151 basis points.
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Current report — wording carried from elsewhere
•Total active members enrolled in our U.S. and Canadian loyalty programs increased 11.5% to 5.8 million.
Current report — wording carried from elsewhere
The following table presents loss on extinguishment of debt:
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Previous report — wording carried elsewhere
The following table presents other income, net: