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Savers Value Village Inc. (SVV)
NYSE:SVV
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Savers Value Village Inc.
(NYSE:SVV)
67Neutral
Positive Factors
Competitive Position
Savers’ adjusted EBITDA margins are already higher than peers, reinforcing the compounding benefits of growth and strong competitive position.
Growth Opportunities
There is deep-set value in the potential decades-long store growth opportunity and a nearer-term opportunity for shares to rerate higher as management regains credibility.
Market Trends
Savers is the only scaled for-profit thrift retailer, and the broader resale market is poised to grow at a low-double-digit pace over the next five years.
Negative Factors
Economic Environment
A more credible risk is lingering softness in the Canadian economy, where the Street has less visibility, and online migration.
Financial Performance
Savers Value Village continues to miss estimates and/or guide down for five quarters in a row.
Sales Performance
Sales trends - both in Canada and US - are below expectations.
Savers Value Village Inc. (SVV) vs. S&P 500 (SPY)
Market Cap
$1.53B
Dividend YieldN/A
Average Volume (3M)868.66K
Price to Earnings (P/E)55.4
Beta (1Y)0.70
Revenue Growth2.49%
EPS Growth-49.97%
CountryUS
Employees22,700
SectorConsumer Cyclical
Sector Strength56
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.17
Shares Outstanding158,707,870
10 Day Avg. Volume793,291
30 Day Avg. Volume868,665
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)N/A
Price to Sales (P/S)0.72
Price to Cash Flow (P/CF)5.00
P/FCF Ratio10.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.67Price Target Upside21.18% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Savers Value Village Inc. Business Overview & Revenue Model
Company DescriptionSavers Value Village Inc. (SVV) is a prominent for-profit thrift retailer operating in the secondhand goods sector. It offers a wide array of pre-owned merchandise, including clothing, accessories, household items, and furniture. The company is known for its commitment to sustainability and community development, as it promotes recycling and reuse through its retail operations. Savers Value Village operates a network of stores across the United States, Canada, and Australia, providing customers with affordable shopping options while supporting local non-profit organizations.
How the Company Makes MoneySavers Value Village Inc. generates revenue primarily through the sale of pre-owned goods in its retail stores. The company sources its inventory through donations, which are often collected in partnership with local non-profit organizations. In exchange for these donations, SVV pays the partner organizations based on the volume of goods collected, providing them with a sustainable source of funding. The company then sorts, prices, and sells these items in its stores, appealing to budget-conscious consumers and environmentally-aware shoppers. The business model is bolstered by the growing demand for sustainable and affordable shopping options, as well as the increasing popularity of thrift shopping as a lifestyle choice. Additionally, SVV may generate revenue through recycling programs, where unsold items are repurposed or sold to recyclers, further aligning with its environmental sustainability goals.
Savers Value Village Inc. Financial Statement Overview
Summary
Savers Value Village Inc. shows stable revenue growth and strong gross margins. However, declining profitability margins and a leveraged financial structure could impact future growth. The company faces challenges in cash management, highlighted by a decrease in free cash flow, although operational cash flow remains robust.Income Statement
The company demonstrates a strong gross profit margin of 78.5% and a modest net profit margin of 1.9% for the latest annual period. The revenue has grown by 2.5% compared to the previous year, indicating a positive growth trend. However, the decline in EBIT and EBITDA margins to 8.5% and 3.7% respectively, from the previous year, suggests increased operational challenges and cost pressures.72
Positive
Balance Sheet
With a debt-to-equity ratio of 1.35, the company shows moderate leverage, which is manageable but could pose risks if not controlled. The return on equity (ROE) is relatively low at 6.9%, reflecting modest profitability for shareholders. The equity ratio stands at 22.4%, indicating a low equity base relative to total assets, which may affect financial flexibility.65
Positive
Cash Flow
The free cash flow growth rate is negative, declining significantly from the previous year, suggesting potential issues in cash generation. However, the operating cash flow to net income ratio is strong at 4.62, indicating efficient cash generation relative to net earnings. The free cash flow to net income ratio is lower at 0.98, showing a decline in free cash flow support for net income.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.54B | 1.50B | 1.44B | 1.20B | 834.01M | Gross Profit |
| 1.21B | 846.00M | 837.30M | 729.66M | 480.56M | EBIT |
| 130.19M | 141.86M | 206.23M | 182.24M | 6.84M | EBITDA |
| 186.77M | 203.00M | 246.96M | 207.92M | 33.68M | Net Income Common Stockholders |
| 29.03M | 53.12M | 84.72M | 83.39M | -63.48M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 149.97M | 179.96M | 112.13M | 96.81M | 137.20M | Total Assets |
| 1.89B | 1.87B | 1.71B | 1.22B | 965.62M | Total Debt |
| 568.15M | 1.29B | 1.26B | 803.94M | 607.83M | Net Debt |
| 418.19M | 1.11B | 1.15B | 707.12M | 470.63M | Total Liabilities |
| 1.46B | 1.49B | 1.48B | 1.04B | 791.69M | Stockholders Equity |
| 421.68M | 376.06M | 227.34M | 185.43M | 173.93M |
| Cash Flow | Free Cash Flow | |||
| 28.40M | 82.77M | 59.26M | 135.22M | 10.74M | Operating Cash Flow |
| 134.28M | 175.16M | 169.43M | 175.76M | 29.91M | Investing Cash Flow |
| -80.52M | -92.36M | -110.50M | -263.17M | -19.17M | Financing Cash Flow |
| -76.63M | -17.04M | -40.22M | 53.00M | 36.81M |
Savers Value Village Inc. Technical Analysis
Positive
9.63
Price Trends
8.12
Positive
9.27
Positive
9.62
Positive
Market Momentum
0.49
Negative
69.26
Neutral
80.23
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SVV, the sentiment is Positive. The current price of 9.63 is above the 20-day moving average (MA) of 8.26, above the 50-day MA of 8.12, and above the 200-day MA of 9.62, indicating a bullish trend. The MACD of 0.49 indicates Negative momentum. The RSI at 69.26 is Neutral, neither overbought nor oversold. The STOCH value of 80.23 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SVV.
Savers Value Village Inc. Risk Analysis
Savers Value Village Inc. disclosed 43 risk factors in its most recent earnings report. Savers Value Village Inc. reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Savers Value Village Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $977.43M | 41.80 | 13.48% | ― | 32.16% | 27.32% | |
67 Neutral | $1.53B | 55.38 | 7.28% | ― | 2.49% | -49.97% | |
66 Neutral | $1.48B | 30.08 | 12.04% | ― | 5.73% | 81.83% | |
65 Neutral | $487.73M | ― | -79.06% | ― | -6.95% | -0.73% | |
60 Neutral | $6.78B | 11.63 | 3.24% | 4.20% | 2.36% | -21.91% | |
59 Neutral | $1.28B | 32.36 | -118.80% | 1.00% | 0.33% | 1.50% | |
51 Neutral | $538.58M | ― | -0.22% | ― | 24.19% | 95.39% |
* Consumer Cyclical Sector Average
Performance Comparison
SVV
Savers Value Village Inc.
9.40
-7.73
-45.13%
LQDT
Liquidity Services
31.49
14.07
80.77%
WINA
Winmark
363.48
13.26
3.79%
RVLV
Revolve Group
20.42
0.61
3.08%
TDUP
thredUP
4.20
2.59
160.87%
RERE
ATRenew Inc. Sponsored ADR
2.39
0.41
20.71%
Savers Value Village Inc. Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -14.48% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong growth and strategic expansion in the U.S. market, supported by an expanding loyalty program and a robust new store pipeline. However, challenges in the Canadian market, increased costs, and the short-term financial impact of new store openings present notable obstacles. While the company is well-positioned for long-term growth, current economic uncertainties in Canada and initial financial pressures from new stores temper the overall positive outlook.Highlights
U.S. Business Performance
The U.S. business saw double-digit total revenue growth, driven by accelerating new store growth and strong comparable store sales. Net sales in the U.S. increased by 10.5% to $220 million, with comparable store sales increasing by 4.7%.
Loyalty Program Growth
The loyalty program experienced double-digit percent growth in active members over the last year, with loyalty members accounting for 72% of total sales in the quarter, up from 70% last year.
New Store Openings
Savers Value Village opened 9 new stores in the quarter, meeting the 2024 new store targets. They plan to open 25 to 30 new stores in 2025 and have a targeted 20% store-level adjusted EBITDA margin for long-term profitable growth.
Adjusted EBITDA Performance
The company generated $74 million of adjusted EBITDA in the quarter, representing more than 18% of sales.
Strong Balance Sheet
The company has a strong balance sheet with $150 million in cash and cash equivalents and a net leverage ratio of 2.1x at the end of the quarter.
Lowlights
Canadian Market Challenges
Net sales in Canada declined by 2.7% due to a weaker Canadian dollar. On a constant currency basis, Canadian net sales declined 0.2% to $155 million, with comparable store sales declining 2.5%, primarily driven by a decrease in transactions.
Cost Increases
Cost of merchandise sold as a percentage of net sales increased by 230 basis points to 44.3%, due to the impact of new stores and deleverage on lower Canadian comparable store sales.
Increased Operating Expenses
Selling, general, and administrative expenses as a percentage of net sales increased by 230 basis points to 22.9%, primarily due to new stores and preopening expenses.
New Store Profitability Challenges
The new stores are expected to be a net headwind of approximately $10 million to adjusted EBITDA in 2025 due to their initial lack of profitability.
Canadian Economic Uncertainty
The potential for new tariffs in Canada creates additional uncertainty, affecting the company's ability to plan effectively in the region.
Company Guidance
In the recent Savers Value Village conference call, the company outlined its guidance for 2025 with several key metrics. They anticipate opening 25 to 30 new stores, contributing to net sales of $1.61 billion to $1.65 billion and comparable store sales growth of 0.5% to 2.5%, with the U.S. expected to outperform Canada. Adjusted EBITDA is projected to range from $245 million to $265 million, compared to $273 million in 2024 using a new definition. The company also plans capital expenditures of $125 million to $150 million. They expect new stores to initially act as a headwind to EBITDA by approximately $10 million but foresee profitability improvements by 2026 as these stores mature. The Canadian economy, with its current challenges, is a focus, but the company remains confident in its long-term growth prospects.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.