Savers Value Village, Inc.
For the period ended Jul 4, 2026. Filed Aug 6, 2026.
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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.
Jul 4, 2026 · Filed Aug 6, 2026
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Notes to Interim Condensed Consolidated Financial Statements
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 July 4, 2026 and for the thirteen and twenty-six weeks ended July 4, 2026 and June 28, 2025, 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 January 3, 2026, 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 January 3, 2026, and related notes included in the most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 20, 2026. 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.
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 January 3, 2026.
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) | July 4, 2026 | June 28, 2025 | July 4, 2026 | June 28, 2025 |
| Retail sales | $430,239 | $396,430 | $816,436 | $747,189 |
| Wholesale sales | 17,980 | 20,778 | 34,978 | 40,164 |
| Total net sales | $448,219 | $417,208 | $851,414 | $787,353 |
Recently issued accounting pronouncements not yet adopted
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. Debt
Long-term debt consisted of the following:
| (in thousands) | July 4, 2026 | January 3, 2026 |
|---|---|---|
| 2025 Term Loan Facility | $726,250 | $730,000 |
| Less: current portion of long-term debt | 7,500 | 7,500 |
| Less: unamortized debt issuance costs and debt discount | 12,256 | 14,285 |
| Long-term debt, net | $706,494 | $708,215 |
On June 2, 2026, the Company entered into an amendment (the “First Amendment”) to its 2025 Senior Secured Credit Facilities. The First Amendment reduces the Applicable Rate on existing borrowings under the 2025 Term Loan Facility from 3.00% to 2.50% for Term SOFR Loans and 2.00% to 1.50% for Base Rate Loans. The First Amendment also provides for a 0.25% reduction of the Applicable Rate if the Company achieves certain public corporate family ratings. The First Amendment resulted in a loss on extinguishment of debt of $1.3 million.
As of July 4, 2026, there wereno advances on the 2025 Revolving Credit Facility, there were $0.8 million of letters of credit outstanding and $179.2 million was available to borrow.
Required minimum principal payments
Required minimum principal payments on debt for each of the following fiscal years as of July 4, 2026 are as follows:
| (in thousands) | |
|---|---|
| 2026 | $3,750 |
| 2027 | 7,500 |
| 2028 | 7,500 |
| 2029 | 7,500 |
| 2030 | 7,500 |
| Thereafter | 692,500 |
| Total | $726,250 |
Note 4. 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 July 4, 2026:
| Fair Value Hierarchy | ||||
|---|---|---|---|---|
| (in thousands) | Level 1 | Level 2 | Level 3 | Total |
| Assets: | ||||
| Money market funds | $301 | $— | $— | $301 |
| Interest rate swaps | — | 7,290 | — | 7,290 |
| Cross currency swaps | — | 1,888 | — | 1,888 |
| Marketable securities (1) | 2,874 | — | — | 2,874 |
| Forward contracts | — | 2,843 | — | 2,843 |
| Total | $3,175 | $12,021 | $— | $15,196 |
| Liabilities: | ||||
| Cross currency swaps | $— | $261 | $— | $261 |
(1)Represents investments held in a rabbi trust associated with the Company’s deferred compensation plan and are included in prepaid expenses and other current assets and other assets in the 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 January 3, 2026:
| Fair Value Hierarchy | ||||
|---|---|---|---|---|
| (in thousands) | Level 1 | Level 2 | Level 3 | Total |
| Assets: | ||||
| Money market funds | $23,136 | $— | $— | $23,136 |
| Interest rate swaps | — | 42 | — | 42 |
| Cross currency swaps | — | 1,617 | — | 1,617 |
| Marketable securities (1) | 2,594 | — | — | 2,594 |
| Total | $25,730 | $1,659 | $— | $27,389 |
| Liabilities: | ||||
| Interest rate swaps | $— | $1,181 | $— | $1,181 |
| Cross currency swaps | — | 2,363 | — | 2,363 |
| Forward contracts | — | 349 | — | 349 |
| Total | $— | $3,893 | $— | $3,893 |
(1)Represents investments held in a rabbi trust associated with the Company’s deferred compensation plan and are included in prepaid expenses and other current assets and other assets on the unaudited interim Condensed Consolidated Balance Sheets.
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, cross currency swaps and interest rate swaps are fair valued using independent valuation services, and the valuations are based on observable market data. As such, the forward contracts, cross currency swaps and interest rate swaps are classified within Level 2. The Company reviews the independent valuation and obtains an understanding of the methods used in pricing the instruments.
Non-recurring fair value measurements
The Company’s non-financial assets, such as goodwill, intangible assets, property and equipment, and right-of-use (“ROU”) lease assets, are recorded at cost. Fair value adjustments are made to these non-financial assets in the period an impairment charge is recognized. During the thirteen and twenty-six weeks ended July 4, 2026, the Company recognized impairment charges of $1.2 million and $1.7 million, respectively, on ROU lease assets. Impairment charges on property and equipment were $1.2 million for both the thirteen and twenty-six weeks ended July 4, 2026. These charges are recorded in selling, general and administrative in the unaudited interim Condensed Consolidated Statements of Operations and Comprehensive Income. Fair value of these assets was determined using discounted cash flow models based on significant unobservable inputs, including projected store-level cash flows, discount rates and market rental data. Accordingly, the fair value of these assets are classified as Level 3 within the fair value hierarchy.
Other fair value disclosures
The fair value of borrowings under the Company’s 2025 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 July 4, 2026 and January 3, 2026.
Note 5. 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, cross currency swaps or both, and uses interest rate swaps to manage the risk of changes in interest rates. The Company’s derivative contracts are not collateralized and are entered into with large, reputable financial institutions that are monitored for counterparty risk. We maintain master netting arrangements that allow for the non-conditional offsetting of amounts receivable and payable with counterparties to help manage our risks and record derivative positions on a net basis. Refer to Note 4. Fair Value Measurements for information on the fair value of our derivative financial instruments.
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 and cross currency swaps to manage its exposure to fluctuations in the U.S. dollar (“USD”) – Canadian dollar (“CAD”) exchange rate. Forward contracts and cross currency swaps lock in the exchange rate for a portion of the estimated cash flows of the Company’s Canadian operations. As of July 4, 2026 and January 3, 2026, the Company’s forward contracts had USD equivalent notional amounts of $69.9 million and $102.4 million, respectively. In September 2025, the Company entered into cross currency swaps with USD notional amounts of $200.0 million as of July 4, 2026 and January 3, 2026. Cross currency swaps and forward contracts 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 2025 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 manages 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. In September 2025, the Company entered into interest rate swaps with USD notional amounts of $569.0 million and $600.0 million as of July 4, 2026 and January 3, 2026, respectively. All interest rate swaps were designated as cash flow hedging instruments.
The fair value of derivative financial instruments were as follows:
| (in thousands) | Balance Sheet Location | Derivatives in an Asset Position | Derivatives in a Liability Position |
|---|---|---|---|
| Derivatives not designated as hedging instruments: | |||
| Forward contracts | Prepaid expenses and other current assets(1) | $2,843 | $— |
| Cross currency swaps | Prepaid expenses and other current assets | 1,888 | — |
| Cross currency swaps | Other liabilities | — | (261) |
| Total | $4,731 | $(261) | |
| Derivatives designated as hedging instruments: | |||
| Interest rate swaps | Prepaid expenses and other current assets | $2,679 | $— |
| Interest rate swaps | Other assets | 4,611 | — |
| Total | $7,290 | $— | |
| Total deferred gain on interest rate swaps(2) | Accumulated other comprehensive income | $7,222 | $— |
(1)Derivatives subject to master netting agreements are presented net on the unaudited interim Condensed Consolidated Balance Sheets.
(2)Presented gross of immaterial income taxes.
| (in thousands) | Balance Sheet Location | Derivatives in an Asset Position | Derivatives in a Liability Position |
|---|---|---|---|
| Derivatives not designated as hedging instruments: | |||
| Forward contracts | Accounts payable and accrued liabilities(1) | $339 | $(688) |
| Cross currency swaps | Prepaid expenses and other current assets | 1,617 | — |
| Cross currency swaps | Other liabilities | — | (2,363) |
| Total | $1,956 | $(3,051) | |
| Derivatives designated as hedging instruments: | |||
| Interest rate swaps | Prepaid expenses and other current assets | $42 | $— |
| Interest rate swaps | Accounts payable and accrued liabilities(1) | 29 | — |
| Interest rate swaps | Other liabilities | — | (1,210) |
| Total | $71 | $(1,210) | |
| Total deferred loss on interest rate swaps(2) | Accumulated other comprehensive income | $— | $(1,221) |
(1)Derivatives subject to master netting agreements are presented net on the unaudited interim Condensed Consolidated Balance Sheets.
(2)Presented gross of immaterial income taxes.
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) | July 4, 2026 | June 28, 2025 | July 4, 2026 | June 28, 2025 |
| (Gain) loss on forward contracts recognized in (gain) loss on foreign currency, net | $(2,869) | $4,248 | $(2,683) | $4,593 |
| Gain on cross currency swaps recognized in (gain) loss on foreign currency, net | $(5,391) | $— | $(3,201) | $— |
| Gain on interest rate swaps recognized in interest expense, net | $(389) | $(1,796) | $(817) | $(4,432) |
The table below presents the effect of cash flow hedge accounting on comprehensive income:
| Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||
|---|---|---|---|---|
| (in thousands, gross of immaterial income taxes) | July 4, 2026 | June 28, 2025 | July 4, 2026 | June 28, 2025 |
| Gain recognized in other comprehensive income | $4,447 | $— | $9,259 | $— |
| Gain reclassified from accumulated other comprehensive income into net income | $389 | $1,796 | $817 | $4,432 |
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. Within the next twelve months, the Company estimates that $2.7 million of gains currently recognized within accumulated other comprehensive income will be reclassified as a decrease in interest expense, net.
Note 6. 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 the Company 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 expenses in the unaudited interim Condensed Consolidated Statements of Operations and Comprehensive Income.
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.
| Thirteen Weeks Ended July 4, 2026 | ||||
|---|---|---|---|---|
| (in thousands) · U.S. Retail · Canada Retail · Total | ||||
| Segment sales | $255,275 | $158,316 | $413,591 | |
| Segment expenses: | ||||
| Cost of merchandise sold, exclusive of depreciation and amortization | 112,840 | 62,683 | 175,523 | |
| Salaries, wages and benefits | 34,664 | 19,390 | 54,054 | |
| Selling, general and administrative | 48,811 | 30,645 | 79,456 | |
| Total segment expenses | 196,315 | 112,718 | 309,033 | |
| Segment profit | $58,960 | $45,598 | 104,558 | |
| Reconciliation of profit | ||||
| Other profit | 6,451 | |||
| General corporate expenses | 43,287 | |||
| Depreciation and amortization | 25,473 | |||
| Operating income | 42,249 | |||
| Interest expense, net | 13,022 | |||
| Gain on foreign currency, net | (3,462) | |||
| Loss on extinguishment of debt | 1,280 | |||
| Other income, net | (66) | |||
| Income before income taxes | $31,475 | |||
| 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 | |||
| Twenty-Six Weeks Ended July 4, 2026 | ||||
|---|---|---|---|---|
| (in thousands) · U.S. Retail · Canada Retail · Total | ||||
| Segment sales | $489,555 | $295,509 | $785,064 | |
| Segment expenses: | ||||
| Cost of merchandise sold, exclusive of depreciation and amortization | 221,992 | 119,494 | 341,486 | |
| Salaries, wages and benefits | 67,718 | 36,502 | 104,220 | |
| Selling, general and administrative | 98,141 | 62,662 | 160,803 | |
| Total segment expenses | 387,851 | 218,658 | 606,509 | |
| Segment profit | $101,704 | $76,851 | 178,555 | |
| Reconciliation of profit | ||||
| Other profit | 12,296 | |||
| General corporate expenses | 87,921 | |||
| Depreciation and amortization | 48,228 | |||
| Operating income | 54,702 | |||
| Interest expense, net | 25,691 | |||
| Loss on foreign currency, net | 2,509 | |||
| Loss on extinguishment of debt | 1,280 | |||
| Other expense, net | 138 | |||
| Income before income taxes | $25,084 | |||
| 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) | |||
| Loss on extinguishment of debt | 2,718 | |||
| Other expense, net | 203 | |||
| Income before income taxes | $20,946 | |||
Note 7. Net Income Per Share
Basic and diluted net income per share were as follows:
| Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||
|---|---|---|---|---|
| (in thousands, except per share data) | July 4, 2026 | June 28, 2025 | July 4, 2026 | June 28, 2025 |
| Numerator | ||||
| Net income | $21,631 | $18,917 | $16,368 | $14,194 |
| Denominator | ||||
| Basic weighted average shares outstanding | 153,862 | 156,464 | 154,453 | 157,524 |
| Dilutive effect of employee stock options and awards | 5,241 | 5,929 | 5,350 | 5,773 |
| Diluted weighted average shares outstanding (1) | 159,103 | 162,393 | 159,803 | 163,297 |
| Net income per share (2) | ||||
| Basic | $0.14 | $0.12 | $0.11 | $0.09 |
| Diluted | $0.14 | $0.12 | $0.10 | $0.09 |
| Antidilutive shares (1) | 8,921 | 8,238 | 7,704 | 7,607 |
(1)The calculation of diluted net income per share excludes the effect of potential shares of common stock as the inclusion of these potential shares would have been antidilutive and/or the shares were contingently issuable and not issuable based on current period results, assuming the end of the reporting period was the end of the contingency period.
(2)Due to the differences between quarterly and year-to-date weighted average share counts and the effect of quarterly rounding to the nearest cent per share, the year-to-date calculation of net income per share may not equal the sum of the quarters.
Note 8. Share Repurchases
Share Repurchase Programs
Share repurchases made under our share repurchase programs, excluding commissions and excise tax, were as follows:
| Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||
|---|---|---|---|---|
| (in thousands, except per share data) | July 4, 2026 | June 28, 2025 | July 4, 2026 | June 28, 2025 |
| Total number of shares repurchased and retired | 1,179 | 438 | 2,406 | 1,834 |
| Weighted average price of shares repurchased | $8.10 | $8.17 | $8.31 | $8.37 |
| Total cost | $9,541 | $3,580 | $19,988 | $15,346 |
As of July 4, 2026, the Company had $21.7 million remaining under the 2025 Share Repurchase Program (as defined below).
2023 Share Repurchase Program
In November 2023, the Company authorized a share repurchase program of up to $50 million of the Company’s common stock (the “2023 Share Repurchase Program”). The 2023 Share Repurchase Program expired on November 8, 2025.
2025 Share Repurchase Program
The Company announced on October 30, 2025 the authorization of a new share repurchase program of up to $50 million of the Company’s common stock (the “2025 Share Repurchase Program”). The 2025 Share Repurchase Program became effective as of November 9, 2025 and expires on November 8, 2027. Under the 2025 Share Repurchase Program, the Company may purchase shares from time to time in compliance with applicable securities laws, that may include Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Exchange Act Rule 10b5-1. The timing and amount of any shares purchased will be based upon a variety of factors, including the share price of the common stock, general market conditions, alternative uses for capital, the Company’s financial performance and other considerations. The 2025 Share Repurchase Program does not obligate the Company to purchase any minimum number of shares, and the program may be suspended, modified or discontinued at any time without prior notice. Any repurchases will be funded by available cash and cash equivalents.
Concurrent share repurchase
On May 16, 2025, certain funds, investment vehicles or accounts managed or advised by the Private Equity Group of Ares Management Corporation 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 didnot receive any proceeds from sales made by the Selling Stockholders. 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 the 2023 Share Repurchase Program authorized in November 2023.
Note 9. 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 July 4, 2026 and June 28, 2025 was 31.3% and 28.9%, respectively. The effective tax rate for the twenty-six weeks ended July 4, 2026 and June 28, 2025 was 34.7% and 32.2%, respectively. The effective tax rate for these periods differed from the federal statutory rate primarily due to limitations on the deductibility of executive compensation under Internal Revenue Code Section 162(m) and losses generated in a foreign jurisdiction for which no tax benefit was recognized as a result of a valuation allowance recorded against deferred tax assets.
The Company continues to monitor legislative developments and guidance related to the Organization for Economic Cooperation and Development global minimum tax rules (commonly referred to as Pillar II) in the jurisdictions we operate. Based on the analysis performed to date, we do not expect the implementation of Pillar II to have a material impact on our financial position, results of operations, or cash flows. We will continue to evaluate the impact of these tax laws in future reporting periods.
As of July 4, 2026, the Company had a $18.9 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 prepaid income tax balance decreased compared to the balance as of January 3, 2026, primarily due to receipt of a U.S. federal income tax refund during the twenty-six weeks ended July 4, 2026. The Company continues to maintain a prepaid income tax position as of July 4, 2026 as income tax obligations are determined based on projected full-year taxable income basis. Given the Company's earnings profile, under which a larger portion of annual taxable income is generally generated in the second half of the fiscal year, tax amounts paid or carryover payment balance during the first half of the year typically exceed income tax liabilities recognized to date. Accordingly, the prepaid income tax balance is expected to be utilized against income tax obligations arising during the remainder of the fiscal year.
Note 10. 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.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.