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Savers Value Village Inc. (SVV)
:SVV
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Savers Value Village Inc.
(NYSE:SVV)
56Neutral
Positive Factors
Market Trends
Positive secular tailwinds with increasing thrift adoption, particularly in the US, and strong new store economics.
Store Expansion
Management sees U.S. store expansion as the largest growth opportunity and the best use of capital.
Negative Factors
Financial Guidance
SVV continues to miss estimates and/or guide down for five quarters in a row.
Profitability Challenges
The company reduces its FY25 EPS estimate due to the detrimental impact to profitability from the new store ramp and additional FX pressure from CAD depreciation.
Sales Performance
Sales trends - both in Canada and US - are below expectations.
Savers Value Village Inc. (SVV) vs. S&P 500 (SPY)
Market Cap
$1.09B
Dividend YieldN/A
Average Volume (3M)727.33K
Price to Earnings (P/E)39.3
Beta (1Y)0.99
Revenue Growth2.49%
EPS Growth-49.97%
CountryUS
Employees22,700
SectorConsumer Cyclical
Sector Strength49
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)0.17
Shares Outstanding158,707,870
10 Day Avg. Volume856,154
30 Day Avg. Volume727,330
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)N/A
Price to Sales (P/S)0.73
Price to Cash Flow (P/CF)5.00
P/FCF Ratio10.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.50Price Target Upside68.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Savers Value Village Inc. Business Overview & Revenue Model
Company DescriptionSavers Value Village Inc. (SVV) is a prominent for-profit thrift retailer, operating a chain of stores that offer a wide array of second-hand merchandise, including clothing, accessories, household goods, and more. The company serves various sectors, primarily focusing on the retail and sustainability markets, by promoting the recycling and reuse of goods. Savers Value Village Inc. positions itself as a leader in the thrift retail industry, with a mission to provide affordable and sustainable shopping options to a diverse customer base.
How the Company Makes MoneySavers Value Village Inc. generates revenue primarily through its retail operations, selling donated and second-hand merchandise at its stores. The company sources its inventory through partnerships with nonprofit organizations, which collect donated items from individuals. In return, Savers Value Village Inc. provides financial support to these nonprofit partners based on the volume of goods collected. This mutually beneficial relationship ensures a steady supply of inventory while supporting charitable causes. Additionally, the company's revenue model capitalizes on the growing consumer interest in sustainable and budget-friendly shopping alternatives, which drives foot traffic and sales at its thrift store locations.
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
Negative
6.84
Price Trends
9.96
Negative
9.90
Negative
10.37
Negative
Market Momentum
-1.03
Positive
21.63
Positive
27.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SVV, the sentiment is Negative. The current price of 6.84 is below the 20-day moving average (MA) of 8.79, below the 50-day MA of 9.96, and below the 200-day MA of 10.37, indicating a bearish trend. The MACD of -1.03 indicates Positive momentum. The RSI at 21.63 is Positive, neither overbought nor oversold. The STOCH value of 27.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SVV.
Savers Value Village Inc. Risk Analysis
Savers Value Village Inc. disclosed 29 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $130.54B | 27.61 | 61.98% | 1.27% | 3.95% | ― | |
72 Outperform | $42.45B | 20.91 | 40.28% | 1.11% | 3.69% | 13.71% | |
72 Outperform | $6.05B | 29.40 | 13.59% | ― | 12.48% | 32.49% | |
71 Outperform | $14.95B | 30.21 | 42.55% | ― | 9.33% | ― | |
60 Neutral | $12.39B | 10.47 | 1.07% | 3.58% | 1.64% | -18.33% | |
56 Neutral | $1.09B | 39.33 | 7.28% | ― | 2.49% | -49.97% | |
54 Neutral | $14.13B | ― | -12.55% | ― | 5.19% | -190.36% |
* Consumer Cyclical Sector Average
Performance Comparison
SVV
Savers Value Village Inc.
6.84
-12.86
-65.28%
DLTR
Dollar Tree
65.69
-84.00
-56.12%
ROST
Ross Stores
128.65
-16.41
-11.31%
TJX
TJX Companies
116.12
20.19
21.05%
BURL
Burlington Stores
235.43
15.91
7.25%
OLLI
Ollie's Bargain Outlet Holding
101.08
26.56
35.64%
Savers Value Village Inc. Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -39.25% | Next Earnings Date: May 8, 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.