Why Savers Value Village Stock Popped This Week
Key Points
Management stated that sales would rise by 8% this year, while adjusted earnings per share would be $0.45.
After sales growth dipped in 2024, this is a welcome reacceleration for shareholders.
Savers Value Village offers an intriguing growth story as it expands into the Southeastern U.S.
Savers Value Village (NYSE: SVV) -- the largest for-profit thrift retailer in North America -- initially rose as much as 12% this week before giving back a portion of these returns as the week ended. The catalyst for this higher share price came from a preliminary earnings announcement that projected sales and earnings figures that easily outpaced Wall Street's expectations. For the fourth quarter, management expects 8% sales growth (excluding the benefit of this year's 53rd week on their fiscal calendar) and a 5% comparable-store sales increase. Management also reiterated 2025 projections of roughly $0.45 in adjusted earnings per share, leaving the stock trading at 23 times earnings at today's price.
Savers Value Village's sales growth reaccelerates
While Savers Value Village is a for-profit thrift retailer -- as opposed to a nonprofit charitable organization like its primary mega-peer -- it directly supports nonprofits by purchasing donated clothes and household goods from these charities to resell at a discounted rate. Home to 367 stores across the United States, Canada, and Australia, Savers Value Village counts roughly six million customers a loyalty members. The company's store count is up from 326 in 2023, and management expects to open 25 new stores in 2026 -- with ample room to continue growing throughout the U.S., particularly.
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Image source: Getty Images.
With the second-hand apparel market growing roughly five times faster than the broader clothing industry -- and projected to grow by 9% annually through 2029 -- Savers Value Village is well-positioned to benefit from the megatrend. After sales growth dipped to 1% in late 2024, the company's growth has reaccelerated and could be here to stay as it expands into largely untapped markets such as Texas, Florida, and other Southeastern U.S. states. I'll be keeping an eye on this intriguing stock, especially if higher growth persists.
Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.