Savers Value Village Inc.
02/20/2026 | Press release | Distributed by Public on 02/20/2026 05:34
Annual Report for Fiscal Year Ending January 3, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The Company reports on a fiscal year basis, which ends on the Saturday nearest December 31. Our last two fiscal years consisted of the 53 weeks ended January 3, 2026 ("fiscal 2025") and the 52 weeks ended December 28, 2024 ("fiscal 2024").
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 2025and 2024items and year-to-year comparisons between fiscal 2025and 2024. Discussions of fiscal 2023items and year-to-year comparisons between fiscal 2024and 2023are 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 28, 2024, which was filed with the SEC on February 21, 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..
This discussion contains forward-looking statements that involve risks and uncertainties about our business and operations and reflect our plans, estimates and beliefs. Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A "Risk Factors" or in other parts of this Annual Report.
Overview
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 367 stores as of January 3, 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 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 January 3, 2026, we had 6.1 million total active members enrolled in our U.S. and Canadian loyalty programs who shopped with us during fiscal 2025, compared to 5.9 million total active members as of December 28, 2024. Active members drove 72.7% of retail sales during fiscal 2025, compared to 72.4% during fiscal 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 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.
Our strategy is to locally source our merchandise by purchasing secondhand items donated to our NPPs, which provides them with revenue to support their community-focused missions. This also aids in creating a broad and diverse selection for our customers, fosters a sense of community, and reduces transportation costs and emissions typically associated with the production and distribution of new merchandise. While purchases made by our customers in our stores do not directly benefit any NPP, we pay a market-competitive contractual rate to purchase donated items.
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 accounted for 78.0%and 76.3% of our total pounds processed for fiscal 2025 and 2024, respectively.
•OSDs:Donations of items by individuals to our NPPs, made at Community Donation Centers ("CDCs") located at our stores. We operate as a registered professional fundraiser where required, accepting donations on behalf of our NPPs. Each store is specifically designated as an OSD location for a particular NPP, such that all donations received at the CDC are credited to that NPP.
•GreenDrop locations: Attended donation stations that collect donations of items made by individuals to our NPPs at well-signed brick and mortar or trailer locations conveniently located closer to attractive donor neighborhoods in the same market as a store. On behalf of our NPPs, we solicit, 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. This channel supplements OSDs and 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 neighborhood collections, donation drives, or similar methods, or we may solicit, collect and deliver items on behalf of our NPPs.
We leverage an analytical platform to measure the sales yield and product margin of each stream of supply in our stores. In general, this tool is either used to periodically confirm the performance of an existing stream of supply or to evaluate the performance of a new source of supply.
Our business model is predicated on sourcing and selling quality secondhand items to our customers in local communities. We are able to meet customer demand given our deep relationships with an extensive network of NPPs that is unmatched in the thrift industry.
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 2025, we processed 1.1 billionpounds of secondhand goods, compared to 1.0 billion in fiscal 2024. 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.
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. Our sales floor inventory is also regularly rotated and refreshed, providing our customers with an extensive, ever-changing selection at tremendous value.
In support of our efforts to extend the life of reusable goods and recover a portion of the cost of acquiring our supply of secondhand items, we sell the majority of textile items that are unsuited for or unsold at retail stores to our wholesale customers (predominantly comprised of textile graders and small business owners) who supply local communities across the globe with gently used, affordable items like clothing, housewares, toys and shoes. Textiles not suitable for reuse as secondhand clothing can be repurposed into other textile items (e.g., wiping rags) and post-consumer fibers (e.g., insulation, carpet padding), further reducing waste.
Business Highlights
The Company's results for fiscal 2025 included the benefit of one additional week (the "53rd week") relative to the prior year comparative period.
The following highlights our financial results for fiscal 2025. Comparisons are to fiscal 2024:
•Total Company net sales increased 9.2% to $1.68 billion. Excluding the benefit of the 53rd week, net sales increased 7.3%, constant-currency net sales increased 8.2% and comparable store sales increased 4.7%.
•For the U.S., net sales increased 12.9%. Excluding the benefit of the 53rd week, net sales increased 10.8% and comparable store sales increased 6.6%.
•For Canada, net sales increased 3.6%. Excluding the benefit of the 53rd week, net sales increased 2.0%, constant-currency net sales increased 4.1% and comparable store sales increased 2.0%.
•The Company opened 26 new stores, ending fiscal 2025 with 367 stores.
•The Company recorded pre-opening expenses of $16.0 million in fiscal 2025, compared to $16.7 million in fiscal 2024.
•Net income was $22.6 million, or $0.14 per diluted share, which included a $35.7 million pre-tax loss on extinguishment of debt. Net income margin was 1.3%.
•Adjusted net income was $72.7 million, or $0.45 per diluted share.
•Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") was $255.7 million and Adjusted EBITDA margin was 15.2%. Changes in foreign currency exchange rates negatively impacted Adjusted EBITDA by $2.4 million during fiscal 2025.
Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin, as well as amounts presented on a constant-currency basis, are not measures recognized under U.S. GAAP. For additional information on our use of non-GAAP financial measures and a reconciliation to the nearest GAAP measure, see "Non-GAAP Financial Measures" below.
Recent Developments
Macroeconomic conditions
There remains significant uncertainty in the current macroeconomic environment, driven by several factors, including global trade policies and tariffs. While the Company is not directly impacted by tariffs due 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 its profitability.
Secondary Offering
On May 16, 2025, certain funds, investment vehicles or accounts managed or advised by the Private Equity Group of Ares Management Corporation ("Ares") and Mark Walsh, the chief executive officer of the Company (collectively, the "Selling Stockholders"), sold 17.3 million shares, including approximately 2.3 million shares pursuant to the exercise of the underwriters' over-allotment option (the "Secondary Offering"). The Company did not receive any proceeds from sales made by the Selling Stockholders but incurred approximately $1.2 million in costs associated with the Secondary Offering, which were recorded in selling, general and administrative expenses in the Consolidated Statement of Operations and Comprehensive Income for fiscal 2025.
In connection with the Secondary Offering, the Company purchased from the underwriters approximately 2.3 million shares of common stock at a price per share of $8.86 and a total cost of approximately $20.0 million, excluding excise tax. The Company funded the share repurchase from its existing cash on hand and it was not part of its existing share repurchase program authorized in November 2023.
Debt refinance and derivatives
On September 18, 2025, the Company entered into new Senior Secured Credit Facilities (the "2025 Senior Secured Credit Facilities"), consisting of a $750 million term loan facility (the "2025 Term Loan Facility") and a $180 million revolving credit facility (the "2025 Revolving Credit Facility"). The proceeds of the 2025 Term Loan Facility were used, in part, to redeem the remaining aggregate principal amount of the Senior Secured Notes (the "Notes"), including accrued interest and a premium of 4.875%, or $19.5 million, and repay all outstanding borrowings under the term loan facility, dated as of April 26, 2021 (the "2021 Term Loan Facility"). As a result of this transaction, the Company recorded a $32.6 million loss on extinguishment of debt which included the $19.5 million prepayment premium, as well as the write-off of unamortized debt issuance costs and debt discounts under the Notes and 2021 Term Loan Facility.
Concurrent with the debt refinancing, the Company entered into interest rate swaps with U.S. dollar ("USD") notional amounts of $600 million and cross currency swaps with USD notional amounts of $200 million.
On December 23, 2025, the Company repaid $20.0 million in outstanding borrowings under the 2025 Term Loan Facility. This transaction resulted in a loss on extinguishment of debt of $0.4 million reflecting the write-off of a proportional amount of unamortized debt issuance costs and debt discount associated with the repayment.
Share repurchases
During fiscal 2025, under its share repurchase programs, the Company repurchased 2.9 million shares at a weighted average price of $8.51 and a total cost of $25.1 million, excluding commissions and excise tax. As of January 3, 2026, the Company had $41.7 million remaining under the 2025 Share Repurchase Program (as defined below).
The Company announced on October 30, 2025 the authorization of a new share repurchase program of up to $50 million of the Company's common stock (the "2025 Share Repurchase Program"). The 2025 Share Repurchase Program became effective on November 9, 2025 and expires on November 8, 2027. Under the 2025 Share Repurchase Program, the Company may purchase shares from time to time in compliance with applicable securities laws, that may include Securities Act Rule 10b-18 and Securities Act Rule 10b5-1.
2025 Impact & Sustainability Report
The Company published its 2025 Impact & Sustainability Report covering fiscal 2024. The report highlights continued progress in advancing its environmental, social and governance (ESG) initiatives, including expanding its greenhouse gas emissions assessment, continued prioritization of team member development, advancements made toward reducing its operational footprint, and the ongoing evolution of its data privacy and cybersecurity programs. Together, these efforts further the Company's mission of making secondhand second nature. The report can be found at https://ir.savers.com/esg.
Key Performance Indicators
We use the key performance indicators below to evaluate the performance of our business, identify trends, formulate financial projections and make strategic decisions. We believe that these metrics provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team.
The following table summarizes certainkey performance indicators for the periods indicated:
| Fiscal Year | |||||||||||
| 2025 | 2024 | ||||||||||
|
Comparable Store Sales
|
|||||||||||
| U.S. | 6.6 | % | 2.7 | % | |||||||
| Canada | 2.0 | % | (4.0) | % | |||||||
|
Total(1)
|
4.7 | % | (0.1) | % | |||||||
| Other Metrics | |||||||||||
|
Pounds processed (Ibs mm)
|
1,111 | 1,012 | |||||||||
| OSDs and GreenDrop as a % of total pounds processed | 78.0 | % | 76.3 | % | |||||||
|
Sales yield
|
$ | 1.47 | $ | 1.46 | |||||||
| Cost of merchandise sold per pound processed | $ | 0.68 | $ | 0.66 | |||||||
(1)Total comparable store sales include our Australia retail locations, in addition to the U.S. and Canada.
Comparable store sales
Comparable store sales is the percentage change in comparable store sales over the comparable period in the prior fiscal year. Beginning in fiscal 2025, comparable store sales is defined as sales by stores that have been in operation for all or a portion of 14 months. The impact of the change is inconsequential to prior periods, so we have not recast previous year amounts to reflect this change. For the periods presented, comparable store sales exclude stores acquired from 2 Peaches Group, LLC (the "2 Peaches Acquisition"). Comparable store sales is measured in local currency for Canada, while total comparable store sales is measured on a currency neutral basis. Comparable store sales for fiscal 2025 excludes the benefit of the 53rd week and compares the first 52 weeks in fiscal 2025 to the 52-week period reported for fiscal 2024.
Comparable store sales provides us with visibility into top-line performance on a like-for-like basis excluding new stores opened in the current or previous reporting period and excluding all closed stores as of the end of the current reporting period. We believe investors can use this metric to assess our ability to increase comparable store sales over time.
During fiscal 2025, our comparable store sales increased 4.7%, primarily reflecting higher average basket 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 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 these metrics to assist in their evaluation of our sales growth, sales yield and to an extent, gross product margin.
During fiscal 2025 and 2024, we processed 1.1 billion and 1.0 billion pounds of supply, respectively, of which 78.0% and 76.3% was comprised of supply from OSDs and GreenDrop, respectively.
Sales yield
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 2025was $1.47, compared to $1.46 for fiscal 2024. The 0.7% increase in sales yield primarily reflects items sold at higher price points, largely offset by a decrease in items sold per pound processed.
Cost of merchandise sold per pound processed
We define cost of merchandise sold per pound processed as cost of merchandise sold, exclusive of depreciation and amortization, on a reported basis, divided by total pounds of goods processed. We believe investors can use this metric to determine our ability to cost-effectively purchase and process supply items, and determine the value of incremental sales.
Cost of merchandise sold per pound processed during fiscal 2025 and 2024 was $0.68 and $0.66, respectively.
Number of stores
Our number of stores provides us visibility into the scale of our operations and is viewed as a key driver of long-term growth. We believe investors can use this metric to assess our ability to open new stores in high-growth markets.
The following table summarizes the Company's store count activity for fiscal 2025:
| U.S. | Canada | Australia | Total | ||||||||||||||||||||
| December 28, 2024 | 172 | 165 | 14 | 351 | |||||||||||||||||||
| New stores | 14 | 8 | 4 | 26 | |||||||||||||||||||
| Closures | (7) | (3) | 0 | (10) | |||||||||||||||||||
| January 3, 2026 | 179 | 170 | 18 | 367 | |||||||||||||||||||
Results of Operations
The following table sets forth our results of operations for each of the periods presented:
| Fiscal Year | |||||||||||||||||||||||
|
2025
|
2024 | ||||||||||||||||||||||
|
(in thousands)
|
Amount | % of Sales | Amount | % of Sales | |||||||||||||||||||
| Net sales | $ | 1,678,954 | 100.0% | $ | 1,537,617 | 100.0% | |||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of merchandise sold, exclusive of depreciation and amortization | 750,876 | 44.7 | 669,744 | 43.6 | |||||||||||||||||||
| Salaries, wages and benefits | 349,010 | 20.8 | 331,023 | 21.5 | |||||||||||||||||||
| Selling, general and administrative | 374,486 | 22.3 | 337,131 | 21.9 | |||||||||||||||||||
| Depreciation and amortization | 80,482 | 4.8 | 69,530 | 4.5 | |||||||||||||||||||
| Total operating expenses | 1,554,854 | 92.6 | 1,407,428 | 91.5 | |||||||||||||||||||
| Operating income | 124,100 | 7.4 | 130,189 | 8.5 | |||||||||||||||||||
| Other expense (income): | |||||||||||||||||||||||
| Interest expense, net | 61,964 | 3.8 | 62,444 | 4.1 | |||||||||||||||||||
| (Gain) loss on foreign currency, net | (11,032) | (0.7) | 14,294 | 0.9 | |||||||||||||||||||
| Loss on extinguishment of debt | 35,728 | 2.1 | 4,088 | 0.3 | |||||||||||||||||||
| Other expense (income), net | 235 | - | (71) | - | |||||||||||||||||||
| Other expense, net | 86,895 | 5.2 | 80,755 | 5.3 | |||||||||||||||||||
| Income before income taxes | 37,205 | 2.2 | 49,434 | 3.2 | |||||||||||||||||||
|
Income tax expense
|
14,566 | 0.9 | 20,404 | 1.3 | |||||||||||||||||||
| Net income | $ | 22,639 | 1.3% | $ | 29,030 | 1.9% | |||||||||||||||||
Comparison of fiscal 2025 and fiscal 2024
Net sales
The following table presents net sales:
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Retail sales | $ | 1,601,595 | $ | 1,463,404 | $ | 138,191 | 9.4 | % | |||||||||||||||
| Wholesale sales | 77,359 | 74,213 | 3,146 | 4.2 | % | ||||||||||||||||||
| Total net sales | $ | 1,678,954 | $ | 1,537,617 | $ | 141,337 | 9.2 | % | |||||||||||||||
Retail sales increased by $138.2 million, or 9.4%, during fiscal 2025, compared to fiscal 2024. The increase in retail sales resulted primarily from a 4.7% increase in comparable store sales, growth in our store base and $27.7 million of sales attributable to the 53rd week of fiscal 2025, partially offset by the unfavorable impact of foreign currency exchange rates.
Cost of merchandise sold, exclusive of depreciation and amortization
The following table presents cost of merchandise sold, exclusive of depreciation and amortization ("cost of merchandise sold"):
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Cost of merchandise sold, exclusive of depreciation and amortization | $ | 750,876 | $ | 669,744 | $ | 81,132 | 12.1 | % | |||||||||||||||
Cost of merchandise sold increased 110 basis points to 44.7% of net sales during fiscal 2025, compared to 43.6% during fiscal 2024. The 110 basis point increase primarily reflects the impact of new stores and deleverage of cost of merchandise sold as a percentage of net sales on comparable store sales in Canada due to higher processing, partially offset by the favorable impact of year-over-year growth in OSDs.
Personnel costs classified within cost of merchandise sold were $461.1 million during fiscal 2025, compared to $393.1 million during fiscal 2024. The $68.0 million increase in personnel costs resulted primarily from growth in our store base, increased labor to support higher processing, the opening of new offsite processing facilities and higher wage rates.
Salaries, wages and benefits
The following table presents salaries, wages and benefits:
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Retail and wholesale | $ | 224,219 | $ | 201,455 | $ | 22,764 | 11.3 | % | |||||||||||||||
| Corporate | 124,791 | 129,568 | (4,777) | (3.7) | % | ||||||||||||||||||
| Total salaries, wages and benefits | $ | 349,010 | $ | 331,023 | $ | 17,987 | 5.4 | % | |||||||||||||||
Personnel costs for our retail and wholesale operations increased by $22.8 million, or 11.3%, during fiscal 2025, compared to fiscal 2024. The increase primarily reflects growth in our store base, higher annual incentive plan expense, as well as increased labor and wage rates.
Personnel costs for our corporate employees decreased by $4.8 million, or 3.7%, during fiscal 2025, compared to fiscal 2024, primarily reflecting a $29.5 million decrease in IPO-related stock-based compensation expense, largely offset by higher annual incentive plan expense, wages and non-IPO-related stock-based compensation expense.
Selling, general and administrative
The following table presents selling, general and administrative ("SG&A"):
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Retail and wholesale | $ | 321,493 | $ | 286,086 | $ | 35,407 | 12.4 | % | |||||||||||||||
| Corporate | 52,993 | 51,045 | 1,948 | 3.8 | % | ||||||||||||||||||
| Total selling, general and administrative | $ | 374,486 | $ | 337,131 | $ | 37,355 | 11.1 | % | |||||||||||||||
SG&A for our retail and wholesale operations increasedby $35.4 million,or 12.4%, during fiscal 2025, compared to fiscal 2024. The increase resulted primarily from growth in our store base, higher rent and utilities, as well as increased routine maintenance costs, partially offset by a decrease in marketing expenses.
Corporate SG&A increased by $1.9 million, or 3.8%, during fiscal 2025, compared to fiscal 2024. The increase primarily reflects investments in information technology, as well as debt transaction and Offering costs, partially offset by the year-over-year change in the fair value of acquisition-related contingent consideration and decreases in marketing and other professional service costs.
Depreciation and amortization
The following table presents depreciation and amortization:
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Depreciation and amortization | $ | 80,482 | $ | 69,530 | $ | 10,952 | 15.8 | % | |||||||||||||||
The increase in depreciation and amortization resulted primarily from continued investments in new stores, offsite processing and information technology, as well as capital maintenance expenditures. In addition, the increase reflects accelerated amortization and depreciation of $4.2 million due to a reduction of the estimated useful lives for certain acquisition-related intangible assets and store-related property and equipment.
Interest expense, net
The following table presents interest expense, net:
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Interest expense, net | $ | 62,532 | $ | 67,810 | $ | (5,278) | (7.8) | % | |||||||||||||||
| Amortization of debt issuance costs and debt discount | 4,768 | 5,611 | (843) | (15.0) | % | ||||||||||||||||||
| Gain on interest rate swaps | (5,336) | (10,977) | 5,641 | (51.4) | % | ||||||||||||||||||
| Total interest expense, net | $ | 61,964 | $ | 62,444 | $ | (480) | (0.8) | % | |||||||||||||||
The $5.3 million decrease in interest expense, net was primarily due to a lower weighted average face value of debt and a decrease in the weighted average interest rate. The weighted average face value of debt decreased 5.6% from $773.8 million during fiscal 2024 to $730.6 million during fiscal 2025 primarily reflecting debt repayments, partially offset by incremental borrowings associated with the September 2025 debt refinancing. Over the same period, the weighted average interest rate decreased 105 basis points from 9.46% to 8.41%, primarily due to lower interest rates on outstanding amounts under our term loan facilities and the reduction in the margin obtained in connection with the September 2025 debt refinancing.
The $5.6 million decrease in gain on interest rate swaps resulted 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.
(Gain) loss on foreign currency, net
The following table presents(gain) loss onforeign currency, net:
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| (Gain) loss on foreign currency remeasurement | $ | (14,215) | $ | 27,342 | $ | (41,557) | n/m | ||||||||||||||||
| Loss (gain) on derivative instruments | 3,183 | (13,048) | 16,231 | n/m | |||||||||||||||||||
| Total (gain) loss on foreign currency, net | $ | (11,032) | $ | 14,294 | $ | (25,326) | n/m | ||||||||||||||||
n/m - not meaningful
Gains and losses on foreign currency relate primarily to movements in the Canadian dollar ("CAD") relative to the USD. In fiscal 2025, the USD weakened against the CAD relative to December 28, 2024, which resulted in remeasurement gains of $14.2 million primarily from USD-denominated debt held by one of our Canadian subsidiaries. We also recorded losses of $3.2 million in fiscal 2025 on derivative instruments that we used to manage foreign currency exchange rate risk.
In fiscal 2024, the USD strengthened against the CAD relative to December 30, 2023, which resulted in remeasurement losses of $27.3 million primarily from USD-denominated debt held by one of our Canadian subsidiaries. We also recorded gains of $13.0 million in fiscal 2024 on derivative instruments that we used to manage foreign currency exchange risk.
Loss on extinguishment of debt
The following table presents loss on extinguishment of debt:
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Loss on extinguishment of debt | $ | 35,728 | $ | 4,088 | $ | 31,640 | n/m | ||||||||||||||||
n/m - not meaningful
In fiscal 2025, loss on extinguishment of debt of $35.7 million comprised $2.7 million associated with the redemption of $44.5 million aggregate principal amount of the Notes on February 6, 2025, as well as $32.6 million associated with the redemption of the remaining aggregate principal amount of the Notes and repayment of all outstanding borrowings under the 2021 Term Loan Facility on September 18, 2025 having used the proceeds, in part, from the 2025 Term Loan Facility. The $32.6 million loss on extinguishment of debt included a $19.5 million prepayment premium, in addition to the write-off of unamortized debt issuance costs and debt discounts under the Notes and 2021 Term Loan Facility. In addition, on December 23, 2025, the Company repaid $20.0 million in outstanding borrowings under the 2025 Term Loan Facility which resulted in a loss on extinguishment of debt of $0.4 million reflecting the write-off of a proportional amount of unamortized debt issuance costs and debt discount associated with the repayment..
In fiscal 2024, loss on extinguishment of debt of $4.1 millioncomprised of $0.7 million associated with the repricing of outstanding borrowings under the 2021 Term Loan Facility and $3.4 million associated with the redemption of $49.5 million aggregate principal amount of the Notes.
Other expense (income), net
The following table presents other expense (income), net:
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Other expense (income), net | $ | 235 | $ | (71) | $ | 306 | n/m | ||||||||||||||||
n/m - not meaningful
Other expense (income), net was comprised primarily of miscellaneous income and expenses not directly related to our core operating activities.
Income tax expense
The following table presents income tax expense:
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Income tax expense | $ | 14,566 | $ | 20,404 | $ | (5,838) | (28.6) | % | |||||||||||||||
| Effective tax rate | 39.2 | % | 41.3 | % | |||||||||||||||||||
During fiscal 2025, the Company recorded income tax expense of $14.6 million on income before income taxes of $37.2 million, which resulted in an effective tax rate of 39.2%. During fiscal 2024, the Company recorded income tax expense of $20.4 million on income before income taxes of $49.4 million, which resulted in an effective tax rate of 41.3%. The decrease in our effective tax rate resulted primarily from a partial release in valuation allowances and a lower Section 162(m) limitation for fiscal 2025.
Segment results
The following table presents net sales and profit by segment:
| Fiscal Year | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| U.S. Retail | $ | 940,185 | $ | 832,581 | $ | 107,604 | 12.9 | % | |||||||||||||||
| Canada Retail | 608,093 | 586,971 | 21,122 | 3.6 | % | ||||||||||||||||||
| Total segment sales | $ | 1,548,278 | $ | 1,419,552 | $ | 128,726 | 9.1 | % | |||||||||||||||
| Segment profit: | |||||||||||||||||||||||
| U.S. Retail | $ | 195,415 | $ | 181,949 | $ | 13,466 | 7.4 | % | |||||||||||||||
| Canada Retail | $ | 153,540 | $ | 163,595 | $ | (10,055) | (6.1) | % | |||||||||||||||
U.S. Retail
U.S. Retail sales increased by $107.6 million, or 12.9%, during fiscal 2025, compared to fiscal 2024. The increasein U.S. Retail sales resulted from a 6.6% increase in comparable store sales, growth in our store base and $17.6 million of sales attributable to the 53rd week of fiscal 2025. The increase in comparable store sales was driven by higher transactions and average basket.
U.S. Retail segment profit increased by $13.5 million, or 7.4%, during fiscal 2025, compared to fiscal 2024.The increase in U.S. Retail segment profit primarily reflects higher profit from our comparable stores, partially offset by the impact of new stores.
Canada Retail
Canada Retail sales increased by $21.1 million, or 3.6%, during fiscal 2025, compared tofiscal 2024. The increase in Canada Retail sales resulted from growth in our store base, $9.2 millionof sales attributable to the 53rd week of fiscal 2025 and a 2.0% increase in comparable store sales, partially offset by the impact of foreign currency exchange rates. The increase in comparable store sales was primarily driven by higher average basket.
Canada Retail segment profit decreased by $10.1 million, or 6.1%, during fiscal 2025, compared to fiscal 2024. The decrease in Canada Retail segment profit primarily reflects deleverage of expenses as a percentage of net sales on comparable store sales and the unfavorable impact of foreign currency exchange rates.
Non-GAAP Financial Measures
The Company reports its financial results in accordance with GAAP. Non-GAAP financial measures used by the Company include Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA, Adjusted EBITDA margin and constant-currency net sales. In the discussion that follows, we provide definitions and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. We have provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental to, and in addition to, the financial measures presented in this Annual Report that are calculated and presented in accordance with GAAP. These non-GAAP financial measures should not be considered superior to, as a substitute for, or an alternative to, and should be considered in conjunction with, the GAAP financial measures presented elsewhere in this Annual Report. These non-GAAP financial measures may differ from, and therefore may not be directly comparable to, similarly titled measures used by other companies.
Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin
Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. We haveincluded these non-GAAP financial measures as these are key measures used by our management and our board of directors to evaluate our operating performance and the effectiveness of our business strategies, make budgeting decisions and evaluate compensation decisions. The Company presents Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin because it considers these meaningful measures to share with investors as they best allow comparison of the performance of one period with that of another period. In addition, by presenting Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA and Adjusted EBITDA margin, the Company provides investors with management's perspective of the Company's operating performance.
Adjusted net income is defined as net incomeexcluding the impact of loss on extinguishment of debt, IPO-related stock-based compensation expense, transaction costs, foreign currency exchange rate impacts, executive transition costs, certain other adjustments, the tax effect on the above adjustments and the excess tax shortfall (benefit) from stock-based compensation. We define Adjusted net income per diluted share as Adjusted net income divided by diluted weighted average common shares outstanding.
Adjusted EBITDA is defined as net income excluding the impact of interest expense, net, income tax expense, depreciation and amortization, loss on extinguishment of debt, stock-based compensation expense, lease intangible asset expense, executive transition costs, transaction costs, foreign currency exchange rate impacts and certain other adjustments. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales, expressed as a percentage.
A reconciliation of GAAP net income and GAAP net income per diluted share to Adjusted net income and Adjusted net income per diluted share is presented in the table below:
| Fiscal Year | |||||||||||
| (in thousands, except per share amounts) | 2025 | 2024 | |||||||||
| Adjusted net income: | |||||||||||
|
Net income
|
$ | 22,639 | $ | 29,030 | |||||||
|
Loss on extinguishment of debt(1)(2)
|
35,728 | 4,088 | |||||||||
|
IPO-related stock-based compensation expense(1)(3)
|
25,496 | 54,981 | |||||||||
|
Transaction costs(1)(4)
|
3,426 | 2,621 | |||||||||
|
Foreign currency exchange rate impacts(1)(5)
|
(9,812) | 14,294 | |||||||||
|
Executive transition costs(1)(6)
|
- | 689 | |||||||||
|
Other adjustments(1)(7)
|
8,907 | 4,312 | |||||||||
|
Tax effect on adjustments(8)
|
(13,952) | (10,810) | |||||||||
|
Excess tax shortfall (benefit) from stock-based compensation
|
223 | (2,321) | |||||||||
|
Adjusted net income
|
$ | 72,655 | $ | 96,884 | |||||||
| Adjusted net income per share, diluted: | |||||||||||
| Net income per share, diluted | $ | 0.14 | $ | 0.17 | |||||||
|
Loss on extinguishment of debt(1)(2)
|
0.22 | 0.02 | |||||||||
|
IPO-related stock-based compensation expense(1)(3)
|
0.16 | 0.33 | |||||||||
|
Transaction costs(1)(4)
|
0.02 | 0.02 | |||||||||
|
Foreign currency exchange rate impacts(1)(5)
|
(0.06) | 0.09 | |||||||||
|
Executive transition costs(1)(6)
|
- | - | |||||||||
|
Other adjustments(1)(7)
|
0.05 | 0.03 | |||||||||
|
Tax effect on adjustments(8)
|
(0.09) | (0.06) | |||||||||
| Excess tax shortfall (benefit) from stock-based compensation | - | (0.01) | |||||||||
|
Adjusted net income per share, diluted*
|
$ | 0.45 | $ | 0.58 | |||||||
(1)Presented pre-tax.
(2)Removes the effects of the loss on extinguishment of debt in relation to the partial repayment of the 2025 Term Loan Facility on December 23, 2025, the full redemption of the Notes and repayment of all outstanding borrowings under the 2021 Term Loan Facility on September 18, 2025, the partial redemption of the Notes on February 6, 2025 and March 4, 2024, and the repricing of outstanding borrowings under the 2021 Term Loan Facility on January 30, 2024.
(3)Represents stock-based compensation expense for performance-based options triggered by completion of our IPO and expense related to restricted stock units issued in connection with the Company's IPO.
(4)Comprised of non-capitalizable expenses related to debt transactions, offering costs and acquisitions.
(5)Represents remeasurement (gains) losses on unsettled foreign currency transactions, realized and unrealized (gains) losses on cross currency swaps and unrealized (gains) losses on forward contracts. Beginning in fiscal 2025, this line does not include realized (gains) losses on forward contracts. The impact of the change is inconsequential to prior periods, so we have not recast previous year amounts to reflect this change.
(6)Represents severance costs associated with executive leadership changes and retention costs associated with the 2 Peaches Acquisition.
(7)Fiscal 2025 includes store impairment and other related charges of $5.9 million, accelerated amortization and depreciation of $4.2 million due to a reduction of the estimated useful lives for certain acquisition-related intangible assets and store-related property and equipment, and a reduction to the fair value of acquisition-related contingent consideration of $1.3 million. Fiscal 2024 includes an impairment charge on long-lived assets of $4.3 million.
(8)Tax effect on adjustments is calculated utilizing the tax rate specifically applicable to the respective adjustments.
A reconciliation of GAAP net income to Adjusted EBITDA is presented in the table below:
| Fiscal Year | |||||||||||
| (dollars in thousands) | 2025 | 2024 | |||||||||
|
Net income
|
$ | 22,639 | $ | 29,030 | |||||||
| Interest expense, net | 61,964 | 62,444 | |||||||||
|
Income tax expense
|
14,566 | 20,404 | |||||||||
| Depreciation and amortization | 80,482 | 69,530 | |||||||||
|
Loss on extinguishment of debt(1)
|
35,728 | 4,088 | |||||||||
|
Stock-based compensation expense(2)
|
38,602 | 61,636 | |||||||||
|
Lease intangible asset expense(3)
|
3,316 | 3,531 | |||||||||
|
Executive transition costs(4)
|
- | 689 | |||||||||
|
Transaction costs(5)
|
3,426 | 2,621 | |||||||||
|
Foreign currency exchange rate impacts(6)
|
(9,812) | 14,294 | |||||||||
|
Other adjustments(7)
|
4,744 | 4,312 | |||||||||
|
Adjusted EBITDA
|
$ | 255,655 | $ | 272,579 | |||||||
| Net income margin | 1.3% | 1.9% | |||||||||
|
Adjusted EBITDA margin
|
15.2% | 17.7% | |||||||||
(1)Removes the effects of the loss on extinguishment of debt in relation to the partial repayment of the 2025 Term Loan Facility on December 23, 2025, the full redemption of the Notes and repayment of all outstanding borrowings under the 2021 Term Loan Facility on September 18, 2025, the partial redemption of the Notes on February 6, 2025 and March 4, 2024, and the repricing of outstanding borrowings under the 2021 Term Loan Facility on January 30, 2024.
(2)Represents non-cash stock-based compensation expense related to stock options and restricted stock units granted to certain of our employees and directors.
(3)Represents lease expense associated with acquired lease intangibles.
(4)Represents severance costs associated with executive leadership changes and retention costs associated with the 2 Peaches Acquisition.
(5)Comprised of non-capitalizable expenses related to debt transactions, offering costs and acquisitions.
(6)Represents remeasurement (gains) losses on unsettled foreign currency transactions, realized and unrealized (gains) losses on cross currency swaps and unrealized (gains) losses on forward contracts. Beginning in fiscal 2025, this line does not include realized (gains) losses on forward contracts. The impact of the change is inconsequential to prior periods, so we have not recast previous year amounts to reflect this change.
(7)Fiscal 2025 includes store impairment and other related charges of $5.9 million, as well as a reduction to the fair value of acquisition-related contingent consideration of $1.3 million. Fiscal 2024 includes an impairment charge on long-lived assets of $4.3 million.
Constant currency
The Company reports certain operating results on a constant-currency basis in order to facilitate period-to-period comparisons of its results without regard to the impact of fluctuating foreign currency exchange rates. The term foreign currency exchange rates refers to the exchange rates used to translate the Company's operating results for all countries where the functional currency is not the USD into the USD. Because the Company is a global company, foreign currency exchange rates used for translation may have a significant effect on its reported results. In general, given the Company's significant operations in Canada, the Company's financial results are affected positively by a weakening of the USD against the CAD and are affected negatively by a strengthening of the USD against the CAD. References to operating results on a constant-currency basis indicate operating results without the impact of foreign currency exchange rate fluctuations.
The Company believes disclosure of constant-currency net sales is helpful to investors because it facilitates period-to-period comparisons of its results by increasing the transparency of its underlying performance by excluding the impact of fluctuating foreign currency exchange rates. Constant-currency results have no standardized meaning prescribed by GAAP, are not prepared under any comprehensive set of accounting rules or principles and should be read in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.
Constant-currency results have limitations in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.
Constant-currency information compares results between periods as if exchange rates had remained constant period-over-period. During fiscal 2025, as compared to fiscal 2024, the USD was stronger relative to the CAD and the Australian dollar ("AUD") which resulted in an unfavorable foreign currency impact on our operating results. The Company calculates constant-currency net sales by translating current-period net sales using the average exchange rates from the comparative prior period rather than the actual average exchange rates in effect.
A reconciliation of GAAP net sales to constant-currency net sales, excluding the benefit of the 53rd week, is presented in the table below:
| (dollars in thousands) | Net Sales | Benefit of 53rd Week | Impact of Foreign Currency | Constant-Currency Net Sales | $ Change Over Prior Year | % Change Over Prior Year | |||||||||||||||||||||||||||||
|
Fiscal 2025
|
|||||||||||||||||||||||||||||||||||
| U.S. Retail | $ | 940,185 | $ | (17,552) | $ | - | $ | 922,633 | $ | 90,052 | 10.8 | % | |||||||||||||||||||||||
| Canada Retail | 608,093 | (9,150) | 12,287 | 611,230 | 24,259 | 4.1 | % | ||||||||||||||||||||||||||||
| Other | 130,676 | (2,221) | 1,412 | 129,867 | 11,802 | 10.0 | % | ||||||||||||||||||||||||||||
| Total net sales | $ | 1,678,954 | $ | (28,923) | $ | 13,699 | $ | 1,663,730 | $ | 126,113 | 8.2 | % | |||||||||||||||||||||||
|
Fiscal 2024
|
|||||||||||||||||||||||||||||||||||
| U.S. Retail | $ | 832,581 | n/a | n/a | $ | 832,581 | n/a | n/a | |||||||||||||||||||||||||||
| Canada Retail | 586,971 | n/a | n/a | 586,971 | n/a | n/a | |||||||||||||||||||||||||||||
| Other | 118,065 | n/a | n/a | 118,065 | n/a | n/a | |||||||||||||||||||||||||||||
| Total net sales | $ | 1,537,617 | n/a | n/a | $ | 1,537,617 | n/a | n/a | |||||||||||||||||||||||||||
|
n/a - not applicable
|
||
Liquidity and Capital Resources
Overview
We have historically financed our operations primarily with cash generated by operating activities and proceeds from debt issuances. Although we do not anticipate paying any cash dividends in the foreseeable future, any future determination relating to dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including restrictions in our current and future debt instruments, our future earnings, capital requirements, financial condition, prospects and applicable Delaware law, which provides that dividends are only payable out of surplus or current net profits.
Our primary short-term requirements for liquidity and capital are to meet general working capital needs, fund capital expenditures and make required minimum principal and interest payments on our debt. Our primary long-term liquidity and capital needs relate to repaying the principal balance on our debt and making lease payments on our retail stores and processing facilities. We may also use cash on our balance sheet, cash generated from operations or proceeds from new borrowings, or any combination of these sources of liquidity and capital, to fund growth initiatives, to pay down debt, to conduct repurchases of our common stock, or to pay for acquisitions, or any combination of the foregoing. Our primary sources of liquidity and capital are cash generated from operations and proceeds from borrowings, including borrowings on our 2025 Senior Secured Credit Facilities. As of January 3, 2026, $179.1 million was available to borrow under the 2025 Revolving Credit Facility.
We believe our existing cash and cash equivalents and cash provided by our operating activities are sufficient to fund our liquidity needs for the next 12 months.
See Note 7. Debt to our audited consolidated financial statements for details of our debt.
2023 Share Repurchase Program
We announced on November 9, 2023 the authorization of a share repurchase program of up to $50 million of the Company's common stock. The 2023 Share Repurchase Programexpired on November 8, 2025. Under the 2023 Share Repurchase Program, we repurchased 5.2 million shares for approximately $48.6 million, excluding commissions and excise tax.
2025 Share Repurchase Program
We announced on October 30, 2025 the authorization of a new share repurchase program of up to $50 million of the Company's common stock. The 2025 Share Repurchase Program became effective as of November 9, 2025 and expires on November 8, 2027. Under the 2025 Share Repurchase Program, we may purchase shares from time to time in compliance with applicable securities laws, that may include Securities Act Rule 10b-18 and Securities Act Rule 10b5-1. Although our Board of Directors has authorized the share repurchase program, we are not obligated to repurchase any specific dollar amount or to acquire any specific number of shares under the program. In addition, the share repurchase program may be suspended, modified or terminated at any time without prior notice. The amount, timing and execution of our share repurchase program will be based upon a variety of factors, including the share price of our common stock, general market conditions, alternative uses for capital, our financial performance and other considerations. Any repurchases will be funded by available cash and cash equivalents.
Cash Flows
The following table summarizes our cash flows for the period indicated:
| Fiscal Year | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| Net cash provided by operating activities | $ | 167,280 | $ | 134,276 | |||||||
| Net cash used in investing activities | (118,467) | (80,523) | |||||||||
| Net cash used in financing activities | (116,020) | (76,630) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 3,144 | (7,111) | |||||||||
| Net change in cash and cash equivalents | $ | (64,063) | $ | (29,988) | |||||||
Comparison of fiscal 2025 and fiscal 2024
Net cash provided by operating activities
Net cash provided by operating activities was $167.3 million for fiscal 2025, compared to $134.3 million for fiscal 2024, an increase of $33.0 million. The $33.0 million increase was primarily due to a $15.0 million reduction in annual incentive plan payments and a $13.0 million reduction in income taxes paid.
Net cash used in changes in operating assets and liabilities during fiscal 2025 consisted primarily of a $128.7 million change in operating lease liabilities, a $26.6 million change in prepaid expenses and other assets, a $15.6 million change in accrued payroll and related taxes and a $15.6 million change in accounts payable and accrued liabilities. The change in operating lease liabilities resulted from lease payments. The change in prepaid expenses and other assets was primarily a result of an increase in prepaid taxes due to the new tax legislation enacted in July 2025. The change in accrued payroll and related taxes resulted primarily from the annual payment of incentive compensation to our employees. As of December 28, 2024, we had accrued $7.9 million for employee incentive compensation which was paid during the first quarter of fiscal 2025. As of January 3, 2026, we had accrued $26.9 million for employee incentive compensation, the majority of which we plan to pay during the first quarter of fiscal 2026. The change in accounts payable and accrued liabilities resulted primarily from interest payments on our debt, which were due periodically throughout the year. As of December 28, 2024, we had an accrued interest balance of $16.1 million on the Notes, which was paid during the first quarter of fiscal 2025. As of January 3, 2026, we had an accrued interest balance of $2.3 million on the 2025 Term Loan Facility, which will be paid during the first quarter of fiscal 2026. The Notes were fully redeemed during the third quarter of fiscal 2025, eliminating recurring interest accruals on the former Notes as of period end.
Net cash used in changes in operating assets and liabilities during fiscal 2024 consisted primarily of a $122.6 million change in operating lease liabilities and a $10.7 million change in accrued payroll and related taxes. The change in operating lease liabilities resulted from lease payments. The change in accrued payroll and related taxes resulted primarily from the annual payment of incentive compensation to our employees, partially offset by increases in accrued payroll and insurance reserves. As of December 30, 2023, we had accrued $24.4 million for employee incentive compensation which was paid during the first quarter of fiscal 2024. As of December 28, 2024, we had accrued $7.9 million for employee incentive compensation, the majority of which we paid during the first quarter of fiscal 2025.
Net cash used in investing activities
Net cash used in investing activities was $118.5 million for fiscal 2025, which consisted primarily of $118.6 million of expenditures related to investments in new stores, offsite processing and information technology, as well as capital maintenance expenditures.
Net cash used in investing activities was $80.5 million for fiscal 2024, which consisted primarily of $105.9 million of expenditures related to investments in new stores, offsite processing and information technology, as well as capital maintenance expenditures. In fiscal 2024, we also received net proceeds of $28.5 million on settlement of derivative instruments, including $28.1 million to the April 2024 termination of our cross currency swaps, and made a net payment of $3.2 million related to the 2 Peaches Acquisition.
Net cash used in financing activities
Net cash used in financing activities was $116.0 million for fiscal 2025, which primarily reflected debt transactions effected during the fiscal year and $45.2 million of share repurchases. In September 2025, the Company received $746.3 million of proceeds from the 2025 Term Loan Facility to repay $716.8 million of existing long-term debt, in addition to paying a $19.5 million prepayment premium and $10.8 million of debt issuance costs. Further, in February 2025, the Company redeemed $44.5 million of the Notes and paid a $1.3 million prepayment premium, and in December 2025, repaid $20.0 million in outstanding borrowings under the 2025 Term Loan Facility.
Net cash used in financing activities was $76.6 million for fiscal 2024, consisting primarily of $55.5 million of principal payments on our long-term debt and $31.7 million of share repurchases under our $50.0 million 2023 Share Repurchase Program, partially offset by net proceeds of $11.9 million related to settlement of a then-existing interest rate swap with an other-than-insignificant financing element at inception, including $9.6 million related to the April 2024 termination of the aforementioned interest rate swap.
Critical Accounting Estimates
Our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report are prepared in accordance with GAAP. Preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from our estimates under different assumptions or conditions. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the assumptions and estimates associated with income taxes have the greatest potential impact on our consolidated financial statements. Accordingly, we believe this policy is most critical to aid in fully understanding and evaluating our Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Income, and Consolidated Statements of Cash Flows.
Income taxes
Management makes estimates, assumptions, and judgments to determine our provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets. We utilize the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss, capital loss, and tax credit carryforwards. Significant management judgment is required in evaluating the realizability of deferred tax assets which involves consideration of a wide range of factors, including, but not limited to, estimates of future taxable income, the timing and character of income, the impact of tax planning strategies, changes in tax laws, and applicable state apportionment factors. A valuation allowance is established against deferred tax assets if it is more likely than not that they will not be realized. Income tax expense represents the current expense incurred for the period plus or minus the change during the period in net deferred tax assets and liabilities.
Recent Accounting Pronouncements
See Note 2. Summary of Significant Accounting Policies to our audited consolidated financial statements for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.
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