Savers Value Village, Inc.

Thank you. Thank you. Thank you. Thank you. Thank you. . . . . . . ¶¶ Thank you. Thank you.

good afternoon and welcome to savers value village conference call to discuss financial results for the fourth quarter ending January 3rd, 2026. At this time, all participants are in 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 a replay of this call and related materials will be available on the company's investor relations website. The comments made during this call and the Q&A that follows 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 defer materially from expectations or historical performance please review the disclosure on forward-looking statements, including in these companies' earnings release and filings with the SEC for discussion of 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 the historical non-GAAP measures to the most directly 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, Jobran Tanyas, President and Chief Executive or Operator Officer, Michael Mayer, Chief Financial Officer, and Ed Iruma, Vice President of Investor Relations and Treasury. Mr. Walsh, you may go ahead, sir.

Thank you, and good afternoon, everyone. We appreciate you joining us today. We are very pleased with our fourth quarter results. We delivered our anticipated inflection in earnings hosting our first quarter of year-over-year adjusted EBITDA growth in nearly two years, supported by profit contribution gains in both countries. We are also thrilled with the momentum in the U.S., where thrift adoption continues to accelerate and strength remains broad-based across categories and regions. Before we look towards the compelling growth opportunities ahead, let me start with a few highlights from the quarter. Sales in our U.S. business grew 20.6% or 12.6% when excluding the benefit of the 53rd week, with comps up 8.8%, driven by both transactions and average basket. We attribute this performance to accelerating consumer adoption of thrift and stellar execution by our team, delivering compelling value to consumers. In Canada, our sales trends have stabilized with a 0.7 comp during the quarter, As we take a conservative approach planning our business in Canada, we have tightly managed production levels, helping us drive year-over-year segment profit growth. We opened 10 new stores in the quarter, finishing the year with 26 openings. As a class, our new stores continue to perform in line with our expectations. We remain confident in our long-term store growth opportunity at a targeted 20% store-level contribution margin. Financially, we generated over $74 million of adjusted EBITDA in the quarter, or 15.9% of sales. Looking at our loyalty program, we have 6.1 million total active members. As it relates to pricing, we are monitoring trends closely. We feel very good about our competitive positioning and value gaps as new clothing and footwear prices continue to increase in the U.S. Finally, we are pleased to announce our outlook for 2026. And Michael will provide further additional details on our outlook in his remarks. Turning to our results by geography, the U.S. business continues to shine. Our 8.8% comp was driven largely by mature stores with minimal contribution from new stores that are only now beginning to enter the comp base. We are also seeing our customer base continue to skew younger and more affluent. As we shared at ICR, based on our loyalty program data, roughly 40% of our U.S. shoppers are under the age of 45, and about 45% of a household income above $100,000. These trends reinforce the powerful secular shift towards thrift in the U.S. At the same time, attractive real estate opportunities supported by our off-site processing capabilities continue to strengthen our confidence in the long runway for disciplined square footage expansion. In Canada, macro conditions remain largely unchanged. and with a mature market, we continue to plan the business conservatively, which is reflected in the modest growth we saw again this quarter. That said, trends have stabilized, and our disciplined approach to managing production allowed us to grow our Canadian segment profit during the quarter. As we significantly slow new store openings and focus on operating more efficiently, we expect margin expansion in Canada, and for our Canadian business to continue to be a meaningful contributor to free cash flow. Moving on to new stores, we continue to be pleased with the results, and they are performing in line with our expectations. As I previously noted, our reflection and profitability was in large part driven by the on-plan maturation of new stores, and we believe we can expand our store fleet in the U.S. at current rates over the years to come. We opened 10 new stores during the quarter, bringing our total to 26 new store openings for 2025. For 2026, we are planning to open around 25 new stores, and as a reminder, we're expecting over 20 of those openings will be in the U.S., including expansion to new markets in North Carolina and Tennessee. To this end, we are pleased to be planning store openings across 11 states in a nice mix of infill and new markets. Store growth remains the highest return and most important use of our capital, and we are excited to bring our value offering to more consumers. Shifting now to innovation, which remains a core part of Saver's DNA. At ICR, we introduced ABP Lite, an asset light extension of our automated book processing or ABP system. We expect returns comparable to our existing ABP system, and we expect that ABP Lite can bring capabilities to roughly 85% of the fleet by the end of the second quarter. We are also investing in proven in-store efficiency initiatives to help offset cost inflation, including autonomous floor scrubbers and AI-enabled HVAC integration. Our innovation agenda continues to focus on three key areas. Strengthen our price-value equation, driving efficiency and cost reduction, and lastly, expanding our data science and business insights. I look forward to sharing more in future quarters. I would like to close by reflecting on another year of meaningful progress since our IPO. At ICR, we outlined three strategic pillars for long-term value creation, growth, innovation, and capital allocation. In 2025, we made meaningful progress on all three of these pillars. Our new stores are maturing as expected and helped drive our inflection point with a return to growth in both segment contribution and enterprise-adjusted EBITDA. We also continue to advance our innovation agenda, sharpening our price-value equation and driving labor efficiency with the initiatives I mentioned earlier as strong examples. and we put in place a new capital structure that reduces annual interest expense by $17 million and provides flexibility for continued debt reduction. I am incredibly proud of the execution from our nearly 24,000 team members and grateful for all their hard work throughout 2025. Their efforts strengthen our business and help us deliver on our commitments to shareholders. We are as energized as ever to continue expanding our footprint and bringing our value proposition to more consumers as thrift adoption grows. Our mission is to make secondhand second nature, and we believe that we are well positioned for continued success. I'll now hand the call over to Michael to discuss our fourth quarter financial performance and the outlook for 2026.