Savers Value Village, Inc. (SVV), a miscellaneous retail company with a market capitalization of $1.69 billion and annual revenue of $1.52 billion, has announced changes to its non-GAAP financial reporting metrics, effective for fiscal 2025. The Delaware-incorporated company, also known by its former name S-Evergreen Holding LLC, revealed these updates in a Form 8-K filed with the Securities and Exchange Commission today. According to InvestingPro analysis, the company is currently trading slightly below its Fair Value, with analysts predicting continued profitability this year.
The company has refined the definition of its Adjusted EBITDA to include non-cash occupancy costs, pre-opening, and store closing expenses, aligning its reporting more closely with peer companies. This adjustment will be applied from the first quarter of fiscal 2025, and historical data will be recast for comparability. The company’s current EBITDA stands at $203 million for the last twelve months, with InvestingPro data showing an overall Financial Health score of "FAIR" based on comprehensive analysis of growth, profit, and cash flow metrics.
Additionally, Savers Value Village is updating its comparable store sales definition. Sales from stores in operation for at least 14 months will now be included, a shift from the previous requirement of stores entering their third fiscal year. This change, effective from fiscal 2025 reporting, is intended to better conform to common retail practice and is not expected to significantly alter previously reported results.
The company is also modifying its method for calculating the tax effect on adjustments within its adjusted net income and per diluted share metrics. Starting in fiscal 2025, the tax rate specific to the adjustments will be used instead of the overall effective tax rate.
These changes come as the company prepares to report its fourth quarter fiscal 2024 results in late February 2025, which will be the last to use the previous metrics. The outlook for fiscal 2025, provided at the same time, will employ the new definitions.
For transparency and to facilitate comparisons, Savers Value Village has furnished unaudited supplemental historical financial information alongside the SEC filing. This includes recast reconciliations of net income and margin to Adjusted EBITDA and Adjusted EBITDA margin, and net income per diluted share to adjusted net income and adjusted net income per diluted share for the first three quarters of fiscal 2024 and the full year of fiscal 2023.
In other recent news, Savers Value Village disclosed preliminary financial results for the fourth quarter and full fiscal year 2024, reporting a 5.0% rise in net sales to $402.0 million and a 2.5% increase in net sales for fiscal 2024, reaching $1.54 billion. Despite economic challenges in Canada, the company saw steady growth and confirmed its projected Adjusted EBITDA for fiscal 2024. However, Piper Sandler, Goldman Sachs, and JPMorgan downgraded the company’s stock due to concerns about gross margin pressures, disappointing sales trends, and potential negative performance.
Additionally, Savers Value Village made strategic financial adjustments, adding a $50 million Incremental Revolving Facility to its existing credit agreement and expanding its presence in the Southeast market through the acquisition of 2 Peaches Group. The company also appointed a new Chief Financial Officer, Michael Maher, a move viewed positively by analysts.
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