Savers Value Village, Inc.

Good afternoon and welcome to Saver's Value Village conference call to discuss financial results for the second quarter ending July 1st, 2023. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. Please note that this call is being recorded and the replay of this call and related materials will be available in the company's investor relations website. The comments made during this call and the Q&A that follows are copyrighted by the company and cannot be reproduced without written authorization from the company. Certain comments made during this call may constitute forward-looking statements, which are subject to significant risks and uncertainties that could cause the company's actual results to differ materially from expectations or historical performance. Please review the disclosure and forward-looking statements included in the company's earnings release. and filings with the SEC for discussion on these risks and uncertainties. Please be advised that statements are current only as of the date of this call, and while the company may choose to update these statements in the future, it is under no obligation to do so unless required by applicable law or regulation. The company may also discuss certain non-GAAP financial measures. A reconciliation of each of these non-GAAP measures to the most direct comparable GAAP financial measure can be found in today's earnings release and SEC filings. Joining for management on today's call are Mark Walsh, Chief Executive Officer, Jace Taz, Chief Financial Officer, and Eubren Tanios, President and COO. Mr. Walsh, you may go ahead, sir.

Thank you for joining us on our first earnings call as a public company. I'm excited to be here today to share our story and talk about the tremendous opportunity ahead of Savers Value Village. Later, Jane will discuss the details of our second quarter results and provide our initial outlook for the full fiscal year ending, December 30th, 2023. We were very pleased with our second quarter results, which exceeded our expectations on both the top and bottom lines. Comparable store sales increased 5.5%, and importantly, we saw consistent and steady demand throughout the quarter. The strong comps combined with sales from new store openings led to a more than 6% increase in revenue on a constant currency basis. And our bottom line profitability remained very strong. Despite a $2.4 million negative impact from foreign currency, we grew adjusted EBITDA nearly 5% to 89 million and increased adjusted EBITDA margin to 23.5% of sales. Stepping back from the numbers, we continue to see a number of positive trends driving our business. The reuse economy and the thrifting community are growing, and this is fueling strong donation volumes and increasing diverse customer base. We are investing in people, process, and technology to drive productivity and sales yield levels that generate extreme value to our customers and strong returns to our shareholders. For those of you who may be less familiar Savers Value Village is the largest for-profit thrift company in the U.S. and Canada. Our mission is to champion reuse and inspire a future where secondhand is second nature. What do we mean by that? Well, every day, millions of pounds of clothing and household goods are thrown away despite the fact that they still have years of usable life left. In most cases, these items go to a landfill. But Savers changes this trajectory. By partnering with nonprofits, we redirect billions of pounds of used clothes and household goods away from landfills and onto our racks and shelves, reducing waste and conserving natural resources. And we do it all while offering our customers a treasure hunt shopping experience and an average cost per item of less than $5. That's our incredible value proposition for consumers and the planet. And that is why we like to say at Savers, we are focused on a triple bottom line, people, planet, and profit. We've been operating for-profit thrift stores for nearly 70 years, and we are nine times larger than the next for-profit competitor. We're using our size and scale to further differentiate ourselves in a fragmented industry that has historically lacked innovation. It all starts with our business model, which is hyper-local, socially responsible, and supported by the communities we serve. Our model combines innovative technology and data to vertically integrate the three highly complex parts of our thrift operations, supply and processing, retail, and wholesale. With a strong focus on data analytics and technology, we are driving productivity gains across the enterprise and revolutionizing thrift operations. Over the last few years, we have introduced a number of key initiatives that are helping drive performance and strengthen our competitive advantages. First, we have implemented self-checkout kiosks in all stores and continue to improve store layout and signage. This has virtually eliminated wait times at checkout and enabled us to redeploy resources to merchandising and customer service, enhancing the overall shopping experience. Next, we have expanded our use of GreenDrop locations. These mobile donation locations are placed in convenient, high-traffic areas that optimize for high-quality donations, strengthening our supply base. There are staff with team members to make drop-offs quick and easy. Finally, on the automation and technology side, we have begun rolling out automated book processing units and central processing centers. Our automated book processing system is an integrated set of technologies to simplify and speed up how we sort and price books. The system uses high-speed conveyors, optic recognition, robotic tagging, and an automated distribution system to determine the best price for each book. Our centralized processing centers are investments in the future as we test and learn these off-site, semi-automated facilities that mechanize the flow of goods and prices. Both our automated book processing units and our central processing centers should drive improved efficiencies across the supply and the pricing of items over time, while deepening our competitive advantages. As I mentioned earlier, our operating initiatives are also powered by strong secular trends, like the growth in the reuse economy, the rise of secondhand goods, and the growing popularity of thrift. This, in turn, is increasing our TAM and providing exceptional growth opportunities. Our model has proven to be very resilient over the last 15 years with positive comparable store sales growth in all but the COVID year of 2020. We have made a number of operational improvements over the last few years that have resulted in significant increases in productivity and profitability, and we are now focused on growth. We are entering a new and accelerated growth phase for the company driven by new store openings, densifying our presence in markets where we are strong, continuing to strengthen our access to quality supply, acquiring established brands with loyal customers, and leveraging our size and infrastructure to enhance our competitive positioning and drive profitable growth at scale. We are ramping towards a target of high single-digit percentage unit growth annually with an accelerated unit growth plan of 12 new stores this year, 22 new stores next year, and 25 or more in the years thereafter. That growth is supported by an infrastructure we built and are continuing to augment to penetrate the growing TAM and the long-term store potential in North America. As you hopefully are beginning to see, we are truly unique. We believe in something big and inspiring, a company that grows its bottom line and benefits people and the planet. People, planet, and profits. That is our triple bottom line. And that is what makes Savers Value Village a unique, purpose-driven company. In closing, I want to thank our entire team for all they do each and every day. We would not be where we are today without our amazing teams, both in stores and at our support centers. Their passion and commitment to our mission and the reuse economy is at the heart of our success. Together, we are making a difference. I am proud of what we do and how we do it. With that said, I will turn it over to Jay to discuss our financial results. Jay?

Thanks, Mark.