SVV 10-K & 10-Q changes, risk factors and insider trading

General Risksrisk factors

Our business and results of operations are subject to global economic conditions, conditions in the markets in which we operate and their impact on consumer discretionary spending, particularly in the retail market. Some of the factors that may negatively influence consumer spending on retail items include high levels of unemployment, high consumer debt levels, a prolonged economic downturn or acute recession, fluctuating interest rates and credit availability, fluctuating fuel and other energy costs, fluctuating commodity prices, other inflationary pressures and general uncertainty regarding the overall future political and economic environment. For example, most Canadian mortgages require multiple term renewals until they are paid in full, and the recent inflationary pressure and elevated interest rates means increased financial pressure on Canadian homeowners that may affect their spending. Furthermore, 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, which may lead to reduced consumer spending and lower sales at our locations throughout Canada. Additionally, economic conditions in particular regions may also be affected by natural disasters, such as earthquakes, hurricanes and wildfires; unforeseen public health crises; political crises, such as terrorist attacks; war, such as the ongoing Russia-Ukraine conflict and conflicts in Venezuela and the Middle East; and other incidents of political or social instability or other catastrophic events in the U.S., Canada or internationally. The presence or absence of government stimulus funding programs has had and may continue to have an impact on consumer discretionary spending and, consequently, purchases at our stores.

We lease virtually all of our locations and must identify, obtain and retain suitable locations for our stores and processing facilities to achieve our planned growth.

We lease virtually all of our locations. Our business strategy requires us to find appropriate store sites in our targeted market areas, and we compete with other retailers and businesses for many of these locations. Furthermore, the growth of our business depends on our ability to secure additional locations for our CPCs and other offsite processing facilities to serve our stores. We estimate that approximately half of our planned store locations may require processing facilities on-site that necessitate specific size, layout and other physical attributes that may not be available widely in the local area. We must also continue to staff our CPCs with qualified workers because our CPC operations are complex and highly dependent on numerous employees and personnel working as a team. Spaces that meet our physical requirements in well-positioned geographic locations continue to be limited, and lease terms offered by landlords are competitive, particularly in geographic locations with access to the large, qualified talent pools required for us to run our logistics infrastructure. Companies with more financial resources and negotiating leverage than us may be more attractive tenants and, as a result, we may be outbid for the facilities we seek.

We are also subject to certain risks with respect to our leases. Our store leases are generally for extended terms with a typical initial term of 10 years and existing leases have an average remaining term of approximately 7.677.63 years as of DecemberJanuary 28,3, 2024.2026. The majority of our store leases contain provisions for base rent and a small number of our leases also contain provisions for percentage rent based on sales in excess of an agreed upon minimum annual sales level. In addition, certain of our leases may contain restrictions on our ability to terminate, assign or sublease our obligations or may contain obligations to continue operating for certain lengths of time, which could prevent us from closing or relocating certain underperforming locations. If we decide to close locations, we generally are required to continue paying rent and operating expenses for the balance of the lease term. Further, even if we are able to assign or sublease vacated locations, we may remain liable on the lease obligations for the rent differential or if the assignee or sub-lessee does not perform. Accordingly, we are subject to certain risks associated with leasing locations, which can have a material and adverse effect on us.

As of DecemberJanuary 28,3, 2024,2026, we operated 165170 stores in Canada and 1418 stores in Australia. Our operations in these non-U.S. jurisdictions require us to understand the retail climate and trends, customs and cultures, seasonal differences, business practices and competitive conditions in those jurisdictions. We are also required to familiarize ourselves with the laws, rules, regulations and government of each of those jurisdictions. Operations in each jurisdiction also require us to develop the appropriate in-country infrastructure, identify suitable partners for local operations and successfully integrate operations in that jurisdiction with our overall operations while effectively communicating and implementing company policies and practices. There are also financial, regulatory and other risks associated with international operations, including currency exchange fluctuations, potentially adverse tax and transfer pricing considerations, limitations on the repatriation and investment of funds outside of the country where earned, tariffs or trade regulations, the risk of sudden policy or regulatory changes, the risk of political, economic and civil instability and labor unrest and uncertainties regarding interpretation, application and enforceability of laws and agreements. Any of these risks could adversely impact our operations, profitability or liquidity.

In addition, our Canadian and Australian operations use a functional currency other than the U.S. dollar. For fiscal year2025, 2024, 43.3%41.6% of our net sales were denominated in a currency other than the U.S. dollar. We are exposed to currency translation risk because the results of our international businesses in some countries are generally reported in local currency, which we then translate to U.S. dollars we record for our foreign assets, liabilities, revenues and expenses, and could have a negative effect on our financial results.

Further, any of the events described herein or other events that cause closures, reductions or delays in operations can slow or temporarily halt our operations and could cause us to incur significant costs to relocate or otherwise re-establish these functions, reduce customer sales or our ability to sell items, or increase our insurance costs. These events could also cause reputational harm, decreased consumer confidence and spending and/or increased volatility in the U.S., Canada and global financial markets and economies. Any of these developments could have a material and adverse effect on our business, financial condition and results of operations.

If we are unable to extend our exclusive rights with the provider of our CPC and ABP technologies, and otherwise successfully leverage technology to automate and drive efficiencies, our business, results of operations and financial condition could be harmed.

To the extent a significant portion of our employee base would choose to unionize, or attempts to unionize, our labor and other related costs could increase. Our ability to pass along any increased labor or other related costs to our customers is constrained by our everyday low-price model, and we may not be able to adequately offset such increased costs elsewhere in our business. In September 2022, one retail store in Ontario, Canada voted to be represented by a union. In September 2024, the same retail store in Ontario, Canada voted to decertify, and the union’s bargaining rights were terminated. If our employees decide to form or affiliate with a union, we cannot predict the effects such future organizational activities will have on our business and operations. If we were to become subject to work stoppages, we could experience disruption in our operations, including increases in our labor costs, which could harm our business, results of operations and financial condition.

In addition, we have in the past and could face in the future face a variety of employee claims against us, including but not limited to general discrimination, privacy, wage and hour, labor and employment, Employee Retirement Income Security Act (“ERISA”) and disability claims. Any claims could also result in litigation against us or regulatory proceedings being brought against us by various federal and state agencies that regulate our business, including the U.S. Equal Employment Opportunity Commission. Often these cases raise complex factual and legal issues and create risks and uncertainties.

If we do complete acquisitions, we may not be able to successfully integrate the acquired operations, systems (including financial, inventory, customer and other systems), team members and facilities into our company, or the time and resources spent on such integration could be greater than expected. In addition, we also may not accurately forecast the financial impact of an acquisition transaction, including accounting charges. Financing such acquisitions may require significant cash, debt (which indebtedness may restrict our business or require the use of available cash to make interest and principal paymentpayments) or the issuance of equity or convertible debt securities (which may result in further dilution of our existing stockholders). For example, we spent significant time and resources and incurred a significant amount of debt to finance the November 2021 acquisition of 2nd Ave. and integrate its operations into our business.

In the ordinary course of our business, we collect, process and store certain personal information and other data, such as customer payment card data processed indirectly through third-party payment processors and employee information. We also maintain other confidential business information such as financial information, operating statistics and metrics, trade secrets and third-party confidential information. Like other large retailers, we rely substantially on commercially available systems, software, tools and monitoring to provide security for our processing, transmission and storage of such information. Cybercriminals may attempt to gain access to our information systems to misappropriate sensitive information or data or to deprive us from access to necessary business information and to disrupt our operations, as part of so-called “ransomware” extortion activity or otherwise. The rise of generative artificial intelligence is allowing criminals to engage in more convincing and scalable social engineering and phishing campaigns by automating personalized messages, mimicking voices and writing styles, and rapidly iterating content to evade detection by email filters and other security tools. We have been in the past and could be in the future the subject of attacks. For example, in July 2020, we suffered a ransomware attack that caused the loss of some of our data and caused some temporary operational disruptions. In addition, our employees, NPPs, service providers or other third parties with whom we do business may purposefully or inadvertently release or compromise such data, including through inadequate security practices or attacks on their networks.

In addition, cyberattacks that impact companies through a critical third-party service provider or elsewhere in the supply chain are increasingly prevalent. Because we make extensive use of third-party suppliers and service providers, successful cyberattacks that disrupt or result in unauthorized access to third-party IT systems can materially impact our operations and financial results. Cybersecurity risk has also increased as a result of globalremote remoteand hybrid working dynamics that present additional opportunities for threat actors to engage in social engineering and to exploit vulnerabilities in non-corporate networks used by many of our employees and critical third-party providers. Moreover, any integration of artificial intelligence in our or anyour third-party’sthird-party providers’ operations, products or services is expected to pose new or unknown cybersecurity risks and challenges.

Our use and other processing of personal information and other data is subject to extensive and evolving laws and regulations. Changes in such laws or regulations or any actual or perceived compliance failures could adversely affect our business, results of operations and financial condition.

We collect, maintain and otherwise process significant amounts of personal information and other data relating to our customers, employees and other individuals. We are subject to the terms of our privacy policies and notices and may be bound by contractual requirements applicable to our collection, use, processing, security and disclosure of personal information, and may be bound by or alleged to be subject to, or voluntarily comply with, self-regulatory or other industry standards relating to these matters. Additionally, numerous state, provincial, and federal laws, rules and regulations of the countries where we operate govern the collection, use and protection of this information. Such requirements are constantly evolving, and we expect that there will continue to be new proposed requirements relating to privacy, data protection and information security in the U.S., Canada and Australia, or changes in the interpretation of existing privacy requirements. For example, the California Consumer Privacy Act (“CCPA”, effective January 1, 2020) broadly defines personal information, imposes stringent consumer data protection requirements, gives California residents expanded privacy rights, provides for civil penalties for violations and introduces a private right of action for data breaches, and the California Privacy Rights Act (“CPRA”, effective January 1, 2023) creates additional obligations relating to personal information. Approximately seventeen U.S. states have enacted laws and regulations relating to privacy similar to California’s, seven of which went into effect between 2023-2024. An additional five states have privacy laws that went into effect in January 2025 and an additional five states have privacy laws going into effect the following year.

Any failure or perceived failure by us or any third parties with which we do business to comply with these privacy requirements, with our posted privacy policies or with other similar obligations may result in investigations or governmental enforcement actions, private claims, public statements against us by consumer advocacy groups or others and fines, penalties or other liabilities. For example, California consumers whose information has been subject to a security incident may bring civil suits under the CCPA for statutory damages between $100 and $750 per consumer. In Canada, we may be subject to regulatory investigations, fines or class action suits stemming from violations of PIPEDA, provincial data privacy laws or CASL. Any such action would be expensive to defend, likely would damage our reputation and market position, could result in substantial liability and could adversely affect our business and results of operations. Additionally, our efforts to comply with these laws may impose significant costs and challenges that are likely to increase over time, and we cannot fully predict the impact on our business or operations of certain unclear aspects of recent laws, future requirements, or changes in the interpretation of existing requirements.

We rely on software, technologies and services sourced or licensed from third parties to operate critical functions of our business, including payment processing services, point of sale systems, ERP system, certain aspects of CPC automation and customer and employee relationship and management services,services. We also use services such as Microsoft for our business emails, file storage and internal communications. If any of the third-party software or services we utilize, or the functional equivalents thereof, were unavailable due to outages or interruptions or because they are no longer available on commercially reasonable terms, our business could experience significant operational disruptions. In each case, we may be required to expend significant resources to remediate such outages; develop such software ourselves; or seek similar software licenses or services from other parties and reshape our business and operations to function with such new software or services. These alternatives could require a significant capital investment, take an extended period of time to implement, and divert management’s attention from our other business concerns, which could adversely affect our business and results of operations.

Changes in Canadian, Australian or U.S. national or local regulations, including those relating or applicable to the sale of secondhand items and advertising practices, or our actual or alleged failure to comply with such regulations, may have a material adverse effect on our reputation, business, financial condition and results of operations.

Our business and financial condition could be adversely affected by unfavorable changes in or interpretations of existing laws, rules and regulations or the promulgation of new laws, rules and regulations applicable to us and our business, including those relating to consumer protection, anti-corruption, antitrust and competition, economic and trade sanctions, tax, banking, environmental protection, waste management, workplace safety, sustainability, data security, network and information systems security, and data protection and privacy. For example, we expect to beare subject to laws in the State of California that require certain businessesentities operatingdoing business in California to prepare a climate-related financial risk report and publicly disclose Scope 1, 2 and 3 greenhouse gas emissionemissions withand third-partythat assurance.may, pending a current federal court stay of enforcement, require posting a climate-related financial risk report. Additionally, the U.S. and Canadian governments may impose tariffs or other economic measures which may have adverse effects on our business. If we were to further expand domestically or internationally, we could be subject to additional regulation.

Further, the resale of secondhand items is subject to significant regulation both domestically and internationally, including by state, provincial or other local governments and regulatory authorities, and can include jurisdiction-specific licensing requirements for secondhand dealers. For example, the resale of secondhand items is subject to regulation by the U.S. Consumer Product Safety Commission, the U.S. Federal Trade Commission (the “FTC”), the U.S. Fish and Wildlife Service, and under the Canadian Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act, and the Convention on International Trade in Endangered Species of Wild Fauna and Flora with respect to our Australian operations. Examples of regulated items include those with certain animal product components (ivory, fur, snakeskin, etc.), jewelry, aquatic toys, children’s items, and hazardous or dangerous items. Regulation can, in some jurisdictions, also require mandatory reporting and/or carry serious penalties for non-compliance. The laws and regulations for the resale of secondhand goods are complex, vary from jurisdiction to jurisdiction and change often. As of DecemberJanuary 28,3, 2024,2026, we received our supply of secondhand items in approximately 30 U.S. states, 10 Canadian provinces and 3 Australian states or territories. Changes in these regulations, or our growth into a new location, could require us to change the way we conduct business in the applicable jurisdictions, such as prohibiting or otherwise restricting the sale or shipment of certain items in some locations. Failure of our employees to identify prohibited items and remove them from the sale process could lead to violations of regulations, fines, penalties or other claims against us, resulting in increased expenses and costs.

Moreover, in connection with our marketing and advertisement practices, we have been in the past and may in the future be, the target of claims relating to false or deceptive advertising, including under the auspices of the FTC and the consumer protection statutes of some states. Additionally, the laws and regulations governing the use of social media, emails, push notifications and text messages for marketing and other business purposes continues to evolve. The failure by us, our employees or third parties acting at our direction to comply with these laws and regulations may negatively affect our brands,brands and reputation, adversely impact our relationships with our NPPs and subject us to penalties and fines.

We have in the past incurred and may in the future incur losses from various types of fraudulent transactions, including the use of stolen credit card numbers, and claims that a customer did not authorize a purchase. In addition, as part of the payment processing process, our customers’ credit and debit card information is transmitted to our third-party payment processors, and we may in the future become subject to lawsuits or other proceedings for purportedly fraudulent transactions arising out of the actual or alleged theft of our customers’ credit or debit card information if the security of our third-party credit card payment processors areis breached.

We and our third-party credit card payment processors are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we or our third-party credit card payment processors fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from our customers. Further, we could violate or be alleged to have violated applicable laws, regulations, contractual obligations or other obligations, including those regulatingrelating to privacy, data protection and data security.

•exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under the 2025 Senior Secured Credit Facilities, are at variable rates of interest;

In addition, the Senior Secured2025 Credit FacilitiesAgreement and the Indenture containcontains restrictive covenants that limit our ability to engage in activities that may be in our long term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of allthe ofdebt ourunder debt.the 2025 Credit Agreement. Our debt currently has a non-investment grade rating, which could be lowered or withdrawn entirely by a rating agency. Any future lowering of our ratings likely would make it more difficult or more expensive for us to obtain additional debt financing. In the event we needed to refinance all or a portion of our indebtedness on or before the maturity thereof or acquire additional financing, we may not be able to do so on commercially reasonable terms or at all, which would have a material adverse effect on our business.

We may be able to incur significant additional indebtedness, or other obligations that do not constitute indebtedness, in the future. Although the 2025 Senior Secured Credit Facilities and the Indenture contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions. The Senior Secured2025 Credit FacilitiesAgreement providepermits forus additionalto uncommittedincur incremental loans ofin an amount up to the greater of $136$313.3 million and 100% of EBITDA for the most recent four fiscal quarters, plus certain other amounts, with additional incremental loans available if certain leverage ratios are maintained. Of the total incremental capacity, $65.0an amount equal to the greater of $313.3 million was permitted to be (and was100% utilizedof as)EBITDA incremental commitments underfor the most recent four fiscal quarters is available for increases in the 2025 Revolving Credit Facility (including an increase of $50.0 million of commitments under the Revolving Credit Facility on June 27, 2024 in connection with the Fourth Amendment to the Credit Agreement).Facility. All of those borrowings wouldmay be secured by first-priority liens on certain of our property. If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to implement any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. The 2025 Senior Secured Credit Facilities and the Indenture restrict our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

The 2025 Term Loan Facility will mature in September 2032 and the Notes will mature on April 26, 2028. The2025 Revolving Credit Facility will mature onin AprilSeptember 26, 2027.2030. Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would have a material adverse effect on our financial condition and results of operations. If we cannot make scheduled payments and default on our debt, the lenders under the 2025 Senior Secured Credit Facilities could terminate their loan commitments, the lenders and the holders of the Notes could foreclose against the assets securing their debt, and we could be forced into bankruptcy or liquidation. In addition, we maintain domestic cash deposit balances with Federal Deposit Insurance Corporation (“FDIC”) insured banks that may exceed the FDIC insurance limits. These balances could be impacted if one or more of these banks fails or is subject to other adverse conditions in the financial or credit markets. In the event one or more of our balances are impacted, our ability to satisfy our debt obligations may be materially adversely affected. Any of these events could result in you losing all or a portion of your investment in the common stock.

The terms of the 2025 Senior Secured Credit Facilities and the Indenture restrict our current and future operations, including our ability to respond to changes or to take certain actions.

The 2025 Senior Secured Credit Facilities and the Indenture contain a number of restrictive covenants that impose operating and financial restrictions on us. These restrictions may limit our ability to engage in acts that may be in our long-term best interest, compete effectively or take advantage of opportunities, and may affect our ability to grow in accordance with our strategy.

The restrictive covenants under the 2025 Senior Secured Credit Facilities include restrictions on our ability to:

You should read the following discussion and analysis of the financial condition and results of operations of Savers Value Village, Inc. in conjunction with our audited consolidated financial statements and related notes and other financial information included in this Annual Report. This section of this Annual Report generally discusses fiscal year2025 and 2024 items and year-to-year comparisons between fiscal 2025 and 2024. Discussions of fiscal 2023 items and year-to-year comparisons between fiscal years 2024 and 2023. Discussions of fiscal year 2022 items and year-to-year comparisons between fiscal years 2023 and 2022 are not included in this Annual Report on Form 10-K and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 30,28, 2023,2024, which was filed with the SEC on MarchFebruary 8,21, 2024.2025.

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

We are the largest for-profit thrift operator in the United States (“U.S.”) and Canada based on number of stores and operateoperated a total of 351367 stores as of January 3, 2026 under the Savers®, Value Village®, Value Village Boutique™, Village des Valeurs™,ValeursMD, Unique® and 2nd Ave.® banners. We are committed to redefining secondhand shopping by providing one-of-a-kind, low-priced merchandise ranging from quality clothing to home goods in an exciting treasure-hunt shopping environment. We purchase secondhand textiles (e.g., clothing, bedding and bath items), shoes, accessories, housewares, books and other goods from our non-profit partners (“NPPs”). We then process, select, price, merchandise and sell these items in our stores. Items that are unsuited for or unsold at retail stores are marketed to wholesale customers who reuse or repurpose the items they purchase from us. We believe our hyper-local and socially responsible procurement model, industry-leading and innovative operations, differentiated value proposition and deep relationships with our customers distinguish us from other secondhand and value-based retailers. Our business model is rooted in ESGsustainability principles,and contributing to the communities we serve, with a mission to positively impact our stakeholders: thrifters, NPPs and their donors, our team members and our stockholders. As a leader and pioneer of the for-profit thrift category, we seek to positively impact the environment by reducing waste and extending the life of reusable goods. The vast majority of the clothing and textiles we source is sold to our retail or wholesale customers.

We offer a dynamic, ever-changing selection of items, with an average unit retail (“AUR”) price of approximately $5. Our most engaged customers are members of our Super Savers Club® loyalty program. As of DecemberJanuary 28,3, 2024,2026, we had 5.96.1 million total active members enrolled in our U.S. and Canadian loyalty programs who have shopped with us during fiscal year 2024,2025, compared to 5.35.9 million total active members as of December 30,28, 2023.2024. Active members drove 72.4%72.7% of retail sales during fiscal year 2024,2025, compared to 70.3%72.4% during fiscal year 2023.2024.

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

We source our merchandise primarily through three distinct and strategic procurement models: (i) on-site donations (“OSDs”), (ii) GreenDrop locations and (iii) delivered supply. Increasing the proportion of OSDs and GreenDrop as a percentage of total supply is desirabledesirable, as donations from these sources are usuallygenerally of higher quality and collectively have a contractually lower cost than product sourced through other channels.channels, which benefits sales yield, and ultimately, our gross product margin. OSDs and GreenDrop are collectively the largest part of our supply mix,mix accountingand accounted for 78.0% and 76.3% of our total pounds processed for fiscal year2025 and 2024, compared to 73.6% for fiscal year 2023.respectively.

•GreenDrop locations: Attended donation stations that collect donations of items made by individuals to our NPPs at convenient and well-signed brick and mortar andor trailer locations inconveniently located closer to attractive donor neighborhoods surroundingin the same market as a store. On behalf of our NPPs, we solicit, collect,collect and deliver items from our GreenDrop locations to our stores and Centralized Processing Centers (“CPCs”).

•Delivered supply: Delivered supply comprises donations delivered either to our CPCs or directly to our stores,stores. orThis both.channel Thesesupplements donationsOSDs canand GreenDrop collections by addressing remaining assortment and volume needs necessary to offer customers a full and balanced product mix. Donations may be collected by our NPPs through a variety of methods such as neighborhood collections orcollections, donation drives, or similar methods, or we may solicit, collect and deliver the items on behalf of our NPPs.

The majority of our retail stores have a dedicated space that handles the processing of soft and hard goods that provide the inventory to be sold on our retail sales floors. In fiscal year 2024,2025, we processed 1.01.1 billion pounds of secondhand goods, compared to 9841.0 millionbillion in fiscal year 2023.2024. We are activelycontinuing implementingto implement our offsite processing strategystrategy, which allowsis usan toimportant processcomponent goodsof our operating model and supports store growth by enabling processing at larger-scale facilities and distribute goodsdistribution to multiple stores in a local market. The processing of donations under this strategy can occur at offsite warehouse facilities, stores with surplus processing capacity or at CPCs.

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

Macroeconomic Conditions in Canadaconditions

TheThere remains significant uncertainty in the current macroeconomic environmentenvironment, indriven Canadaby remainsseveral challenging,factors, withincluding elevatedglobal levelstrade of unemploymentpolicies and atariffs. highWhile costthe of living thatCompany is especiallynot harddirectly onimpacted low-incomeby consumers.tariffs Indue to its hyper-local procurement model, in periods of perceived or actual unfavorable economic conditions, consumers may reallocate their discretionary spending, which may adversely impact demand for the Company’ products and ourits profitability.

During fiscal year 2024,2025, under our $50.0 millionits share repurchase programprograms, announcedthe in November 2023, weCompany repurchased 3.22.9 million shares at a weighted average price of $9.95$8.51 and a total cost of $31.9$25.1 million.million, excluding commissions and excise tax. As of DecemberJanuary 28,3, 2024,2026, the Company had $18.1$41.7 million remaining under the share2025 repurchaseShare program.Repurchase Program (as defined below).

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

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

During fiscal year 2024, our comparable store sales were relatively flat. During fiscal year 2023,2025, our comparable store sales increased 4.7%, primarily reflecting growthhigher inaverage transactionbasket volume.and transactions. During fiscal 2024, our comparable store sales were relatively flat.

Pounds processed and supply mix

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

During fiscal years 20242025 and 2023,2024, we processed 1.01.1 billion and 9841.0 millionbillion pounds of supply, respectively, of which 76.3%78.0% and 73.6%76.3% was comprised of supply from OSDs and GreenDrop, respectively.

We define sales yield as retail sales generated per pound processed on a currency neutral and comparable store basis. For fiscal 2025, sales yield is calculated based on the first 52 weeks in the period. We believe investors can use this metric as an indicator of the quality of goods we source, because when the quality is high, we are able to sell more items and/or sell items at higher prices from the volume we process than we would otherwise.

Our sales yield for fiscal year 20242025 was $1.46,$1.47, compared to $1.48$1.46 for fiscal year 2023.2024. The 1.4%0.7% declineincrease in sales yield primarily reflects items sold at higher price points, largely offset by a decrease in items sold per pound processed, partially offset by items sold at higher price points.processed.

Cost of merchandise sold per pound processed during fiscal years2025 and 2024 and 2023 was $0.66$0.68 and $0.63,$0.66, respectively.

We are the largest for-profit thrift operator in the United States (“U.S.”) and Canada based on number of stores and operated a total of 370375 stores as of AprilJuly 4, 2026 under the Savers®, Value Village®, Value Village Boutique™, Village des ValeursMD, Unique® and 2nd Ave.® banners. We are committed to redefining secondhand shopping by providing one-of-a-kind, low-priced merchandise ranging from quality clothing to home goods in an exciting treasure-hunt shopping environment. We purchase secondhand textiles (e.g., clothing, bedding and bath items), shoes, accessories, housewares, books and other goods from our non-profit partners (“NPPs”). We then process, select, price, merchandise and sell these items in our stores. Items that are unsuited for or unsold at retail stores are marketed to wholesale customers who reuse or repurpose the items they purchase from us. We believe our hyper-local and socially responsible procurement model, industry-leading and innovative operations, differentiated value proposition and deep relationships with our customers distinguish us from other secondhand and value-based retailers. Our business model is rooted in sustainability and contributing to the communities we serve, with a mission to positively impact our stakeholders: thrifters, NPPs and their donors, our team members and our stockholders. As a leader and pioneer of the for-profit thrift category, we seek to positively impact the environment by reducing waste and extending the life of reusable goods. The vast majority of the clothing and textiles we source is sold to our retail or wholesale customers.

We source our merchandise primarily through three distinct and strategic procurement models: (i) on-site donations (“OSDs”), (ii) GreenDrop locations and (iii) delivered supply. Increasing the proportion of OSDs and GreenDrop as a percentage of total supply is desirable as donations from these sources are generally of higher quality and collectively have a contractually lower cost than product sourced through other channels, which benefits sales yield, and ultimately, our gross product margin. OSDs and GreenDrop are collectively the largest part of our supply mix, and accountedaccounting for 75.9%84.9% and 74.0%78.5% of our total pounds processed for the thirteen weeks ended AprilJuly 4, 2026 and MarchJune 29,28, 2025, respectively. OSDs and GreenDrop accounted for 80.6% and 76.3% of our total pounds processed for the twenty-six weeks ended July 4, 2026 and June 28, 2025, respectively.

The majority of our retail stores have a dedicated space that handles the processing of soft and hard goods that provide the inventory to be sold on our retail sales floors. During the thirteen weeks ended AprilJuly 4, 2026, we processed 266282 million pounds of secondhand goods, compared to 262279 million during the thirteen weeks ended MarchJune 29,28, 2025. During the twenty-six weeks ended July 4, 2026, we processed 548 million pounds of secondhand goods, compared to 541 million during the twenty-six weeks ended June 28, 2025. We are continuing to implement our offsite processing strategy, which is an important component of our operating model and supports store growth by enabling processing at larger-scale facilities and distribution to multiple stores in a local market. The processing of donations under this strategy can occur at offsite warehouse facilities, stores with surplus processing capacity or at CPCs.

BusinessFinancial Highlights

The following highlights our financial results for the thirteen weeks ended AprilJuly 4, 2026 (the “firstsecond quarter”). Comparisons are to the thirteen weeks ended MarchJune 29,28, 2025:

•For the United States (“U.S.”),U.S., net sales increased 11.2%11.6% and comparable store sales increased 6.4%.6.6%.

•For Canada, net sales increased 6.7%2.2%; constant-currency net sales increased 2.0%2.2%; and comparable store sales decreasedincreased 0.6%.0.8%. An earlier Easter negativelyin fiscal 2026 positively impacted Canadian comparable store sales by approximately 0.7% as several of our Canadian stores were closed for Good Friday.0.7%.

•Net lossincome was $5.3$21.6 million, or $0.03$0.14 per diluted share. Net lossincome margin was 1.3%.4.8%.

BroadRecent developmentsevents in the Middle East, including the conflict involving Iran, and political and economic instability in VenezuelaVenezuela, have contributed to volatility in global energy markets. While the Company is not directly impacted by import disruptions due to its hyper-local procurement model, these conditions may increase transportation costs and, in periods of perceived or actual unfavorable economic conditions, lead consumers to reallocate discretionary spending which may adversely impact demand for the Company’s products and its profitability.

During the thirteen weeks ended AprilJuly 4, 2026, our comparable store sales increased 3.5%,4.4%, primarily reflecting higher average basket, partiallyand offsetto bya lesser extent, transactions. In addition, an earlier Easter whichin negativelyfiscal 2026 positively impacted Canadian comparable store sales by approximately 0.7% as several of our Canadian stores were closed for Good Friday. During the thirteen weeks ended MarchJune 29,28, 2025, our comparable store sales increased 2.8%,4.6%, primarily reflecting higher average basket.basket and transactions.

During the thirteen weeks ended AprilJuly 4, 2026 and MarchJune 29,28, 2025, we processed 266282 million and 262279 million pounds of supply, respectively, of which 75.9%84.9% and 74.0%78.5% was comprised of supply from OSDs and GreenDrop, respectively.

Our salesSales yield for the thirteen weeks ended AprilJuly 4, 2026 was $1.47$1.56 compared to $1.38$1.46 for the thirteen weeks ended MarchJune 29,28, 2025. The 6.5%6.8% increase in sales yield primarily reflects higher average price points and an increase in items sold per pound processed and higher average price points.processed.

The following table summarizes the Company’s store count activity for the twelve months ended AprilJuly 4, 2026:

Thirteen Weeks Ended AprilJuly 4, 2026 compared to the Thirteen Weeks Ended MarchJune 29,28, 2025

Retail sales increased by $35.4$33.8 million, or 10.1%,8.5%, during the thirteen weeks ended AprilJuly 4, 2026, compared to the thirteen weeks ended MarchJune 29,28, 2025. The increase in retail sales resulted primarily from a 3.5% increase in comparable store sales, growth in our store base and thea favorable4.4% impactincrease ofin foreigncomparable currencystore exchange rates.sales.

Cost of merchandise sold decreased 10170 basis points to 45.4%43.1% of net sales during the thirteen weeks ended AprilJuly 4, 2026, compared to 45.5%44.8% for the thirteen weeks ended MarchJune 29,28, 2025. The 10170 basis point decrease primarily reflects improvement in cost of merchandise sold as a percentage of net sales on comparable store sales due to increased operating efficiency and the favorable impact of year-over-year growth in OSDs, partially offset by new store dilution.

Personnel costs classified within cost of merchandise sold were $113.7$119.7 million during the thirteen weeks ended AprilJuly 4, 2026, compared to $105.5$113.5 million during the thirteen weeks ended MarchJune 29,28, 2025. The $8.2$6.2 million increase in personnel costs resulted primarily from growth in our store base and higher wage rates, partially offset by labor efficiency gains.

Personnel costs for our retail and wholesale operations increased by $2.3$3.5 million, or 4.3%,6.3%, during the thirteen weeks ended AprilJuly 4, 2026, compared to the thirteen weeks ended MarchJune 29,28, 2025. The increase primarily reflects growth in our store base.

Personnel costs for our corporate employees decreased by $0.7$5.0 million, or 2.1%,15.9%, during the thirteen weeks ended AprilJuly 4, 2026, compared to the thirteen weeks ended MarchJune 29,28, 2025,2025. The decrease primarily reflectingreflects aan $5.0$11.6 million decrease in IPO-related stock-based compensation expense, largelypartially offset by higher wages,incentive plan expense, wages and non-IPO-related stock-based compensation expense and annual incentive plan expense.

SG&A for our retail and wholesale operations increased by $9.3$6.8 million, or 12.2%,8.7%, during the thirteen weeks ended AprilJuly 4, 2026, compared to the thirteen weeks ended MarchJune 29,28, 2025. The increase resulted primarily fromreflects growth in our store base and increasedhigher routinerepair and maintenance costs, including an increase in snow removal costs, as well as higher rent and utilities.expense.

Corporate SG&A increased by $2.1$6.5 million, or 18.7%,63.7%, during the thirteen weeks ended AprilJuly 4, 2026, compared to the thirteen weeks ended MarchJune 29,28, 2025. The increase primarily reflects investmentsa $2.4 million impairment charge, an increase in informationprofessional technology.services and $1.1 million of transaction costs related to the debt repricing amendment.

The $4.6 million increase in depreciation and amortization resulted primarily from continued investments in new stores, offsite processing and information technology, as well as capital maintenance expenditures.expenditures, partially offset by lower accelerated depreciation and amortization following the reduction in the estimated useful lives of certain acquisition-related intangible assets and store-related property and equipment during the thirteen weeks ended June 28, 2025.

The $3.5$3.0 million decrease in total interest expense, net was primarily due to a decrease in interest expense, net, partially offset by a decrease in gain on interest rate swaps. The $3.5 million decrease in interest expense, net was driven by a decrease in the weighted average interest rate. During the thirteen weeks ended April 4, 2026 compared to the thirteen weeks ended March 29, 2025, theThe weighted average interest rate decreased 233250 basis points from 9.03%9.00% to 6.70%,6.50%. This decrease was primarily due to the reduction in the margin obtained in connection with the September 2025 debt refinancing and lower interest rates on outstanding amounts under our term loan facilities.refinancing.

The $2.2$1.4 million decrease in the gain on interest rate swaps resulted primarily from the full reclassification in May 2025 of the remaining deferred gain recorded in accumulated other comprehensive income related to the interest rate swap terminated in April 2024.