Good afternoon, and welcome to Savers Value Village's conference call to discuss financial results for the second quarter ending June 29th, 2024. 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 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 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 on forward-looking statements included in the company's earnings release and filings with the SEC for a discussion on these risks and uncertainties. Please be advised that the 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, as a reconciliation of each of these non-GAAP measures to the most directly comparable GAAP financial measure can be found in today's earnings release and SEC filings. Joining from the management on today's call are Mark Walsh, Chief Executive Officer, Jubran Tanious, President and Chief Operating Officer, and Michael Maher, Chief Financial Officer. Mr. Walsh, you may go ahead, sir. Thank you, and good afternoon, everyone. We appreciate you joining us today. Let me just start by laying out the highlights to the quarter and the way we are developing the business, and then I'll touch on each of these a little further. Our U.S. business performed well in the second quarter with results that were in line with our expectations. Our results in Canada were below our expectations, which we believe was driven primarily by macroeconomic factors. We feel very good about our pipeline of new stores and the performance of our recently opened stores. Our donation trends remain strong, and we continue to invest in a multifaceted supply and processing strategy that unlocks growth. Let me now touch on each of these in a little greater detail. Traffic and sales trends in our U.S. business remained solid throughout the quarter, with consistent low single-digit increases in both transactions and average basket, while our business in Canada softened as the quarter progressed. Over the past few quarters, the Canadian economy has faced significant headwinds. GDP per capita has declined, and the unemployment rate has risen from 5.7% - 6.4% just in the first half of this year. Canadian household debt is over 100% of GDP, and household debt service costs have increased sharply to over 15% of household income. Both are near historic highs. Housing affordability is a core issue. Canadian home mortgages typically require an interest rate reset every few years, resulting in substantially higher mortgage payments at today's rates relative to a few years ago. Renters face similar cost pressures as Canadian rent inflation is up double digits over the last 2 years, and new housing and apartment supply remain severely constrained. Against this backdrop, Canadian consumers are cutting back on discretionary categories such as apparel and housewares. According to retail sales data published by Statistics Canada, total sales of apparel and footwear fell during the first 4 months of the year, with the decline accelerating as the year has progressed. While we also know from our consumer survey data that thrift shoppers, many of whom are at the low end of the income scale, are experiencing greater financial stress than the population at large. We see this playing out in our business in Canada, where our customers skew younger and lower income than the general population. We are capturing some trade-down from consumers who are reducing their spend at non-discount retailers, but unfortunately, this is more than offset by weakness in our lower-income customer cohorts. Macro conditions aside, we are focusing on managing what we can control and continuing to strengthen our offering and value proposition to the Canadian consumer. With an average unit retail of $5, we provide a tremendous value, and we have strong customer loyalty. Active member counts grew by double-digit% in Canada over the last year, and we continue to see very low attrition from our loyalty program among our highest and best spenders. We're continuing to test approaches to drive foot traffic, increase conversion, and improve our overall value perception among consumers. While we are certainly not content with our results in Canada, we remain confident in our long-term outlook. We enjoy 95% brand awareness in Canada and estimate that 1 in 3 households shop with us. In addition, our Canadian business remains profitable. With all but one of our comp stores, they are generating positive 4-wall contribution despite current top-line headwinds. Our survey data indicate that our core Canadian consumers plan to increase their spending at thrift stores as their incomes grow. These strengths give us confidence in our ability to navigate the cyclical downturn and emerge well-positioned for continued success. Despite the macro headwinds in Canada, our long-term growth plans continue to gain momentum. This year, we are on track to open our targeted number of 22 stores, plus an additional 7 from the 2 Peaches acquisition, for a total of 29 new stores. We also feel good about the trajectory of our new stores for next year, with an initial plan of 25 and a more balanced quarterly cadence to our opening schedule. We opened 4 new stores and acquired 7 2 Peaches stores in the second quarter. Our new stores in total are exceeding our expectations, with the U.S. stores performing especially strong. We have a tremendous growth opportunity in front of us, particularly in the United States, where thrift is still a highly fragmented and emerging sector. With just 165 stores in the U.S., we are under-penetrated in most major markets that we currently operate in, and we have virtually no presence in major regions of the country, as the South and the Southeast. The U.S., which currently accounts for approximately half our stores' sales and earnings, will increasingly drive our growth going forward. Roughly 60% of our new store openings in 2025 will be in the U.S., and that percentage will continue to grow. Overall, we expect new stores to be the primary driver of high single-digit total annual sales growth over the long term. Turning now to supply. Donations were very strong in the second quarter, and this has been a trend for some time. On-site and GreenDrop donations grew 6% over last year and were 78% of total pounds processed. As our efforts to provide our nonprofit partners, donors, a convenient, efficient, and friendly experience continue to gain traction, we expect donation volumes to remain strong. We are focused on expanding our network of donation locations to take advantage of these trends and continue improving the quality and control of our supply. With strong on-site donations, a growing network of mobile donation locations, and long-established relationships with our nonprofit partners, we project supply to be more than sufficient to support our existing stores and new store expansion for the foreseeable future. Equally important to our strategic positioning and scaling of our business is off-site processing. Over the last several years, we have made a number of investments to enhance our processing capabilities, especially in off-site facilities, including central processing centers and warehouse processing facilities. These off-site processing capabilities enable us to open stores and locations that, for various reasons, can't support on-site processing. This is a critical unlock for our new store growth plans, and it has already enabled us to significantly expand the field of play as we scout potential new store sites. More than half of our new stores going forward will leverage some form of off-site processing. While off-site processing has been a big win for us, we are in the early stages of building these capabilities. As we continue to gain experience, we are driving greater operational efficiency through increased throughput and process improvements. At our Edmonton Central Processing Center, the first one we opened in 2021, cost per unit has continued to decline and is now approaching the cost of traditional on-site processing in a store. This is a significant development for our expansion initiatives. Achieving near parity in cost between the different processing approaches will enable a more profitable long-term growth and make off-site processing an even more important competitive differentiator for us. In closing, we recently marked the one-year anniversary of our debut as a public company. Since that time, we've achieved a number of important milestones. We've accelerated the pace of our new store openings. Off-site processing is now a proven unlock for new store growth. We've entered new markets, including the southeastern U.S. and Sydney, Australia, and our loyalty membership is growing double digits. I couldn't be prouder of the highly dedicated team members who have made all of this possible. Even as we navigate a difficult Canadian economic environment, I am more confident than ever in our long-term growth prospects and in our mission to make secondhand second nature. Now I'll hand the call over to Michael to discuss our financial performance and the outlook for the remainder of the year. Thank you, Mark, and good afternoon, everyone. It's a pleasure to be here at Savers Value Village and participating on my first earnings call with the company. As most of you are aware, I joined Savers in May and have spent the first few months in the field and familiarizing myself with the business and the team. I find many reasons to be excited about this company, including its unique business model, significant long-term growth potential, highly engaged customers, and talented team. My priorities are increasing shareholder value, strengthening our finance capabilities, and evolving our approach to planning and forecasting the business across both near-term and longer-term time horizons. There is a strong foundation to build on, and I'm looking forward to working with the finance team and our business partners to help the company achieve its full potential. Our second quarter was highlighted by the acceleration of our new store growth plans, better than expected performance in our new stores, especially in the U.S., and continued progress in off-site processing. Our U.S. business was consistent with our expectations and first quarter trends, but sales and earnings in Canada were lower than we expected due to the challenging Canadian economic environment. Despite softness in Canada, our adjusted EBITDA margin was over 20% for the quarter, and we continued to generate strong cash flows, highlighting the resilience of our financial model. Turning now to the income statement. Total net sales increased 2% to $387 million in the second quarter. On a constant currency basis, net sales increased 2.8%, and comparable store sales decreased 0.1%. In the Cost of merchandise sold as a percentage of net sales increased 100 basis points to 42.1%, with the increase reflecting the impact of new stores and the 2 new central processing centers that were opened in the second half of last year, as well as deleverage on lower sales in Canada. As a reminder, our new stores typically open at roughly half of their mature sales levels, resulting in lower profit margins in their first few years. As we accelerate growth, new stores will be a headwind to profit margins in the short term. However, this headwind will subside as we continue to open stores at a sustained pace and our new store classes begin to mature. Investments in new stores generate strong returns on our capital, and the performance of our recently opened stores gives us added confidence in our growth plans. Investments in off-site processing are also impacting our cost of merchandise sold. Off-site processing entails additional activities and costs, including freight and overhead, resulting in pressure on our profit margins when we open a central processing center or other off-site facility and work through the initial ramp-up. However, as we increase throughput and improve productivity in these facilities, the cost per unit declines, providing a tailwind to profit margins. That's exactly what we're seeing in our three more mature central processing centers. During the second quarter, unit cost reductions in these three CPCs partially offset the combined effects of new stores and new CPCs. The remaining increase in cost of merchandise sold as a percentage of net sales resulted from deleverage on lower sales in Canada. We have reduced processing levels in Canada in response to demand to mitigate the deleverage of our labor costs on lower sales. We continue to monitor this closely as we work to balance profit margins and the continued flow of fresh product to drive sales. Continuing down the income statement, salaries, wages, and benefits expense was $91 million, excluding $20 million of IPO-related stock-based compensation. Salaries, wages, and benefits as a percentage of net sales increased 60 basis points to 18.4%, reflecting the impact of new stores and higher wages and benefits. Selling, general, and administrative expenses as a percentage of net sales increased 230 basis points to 21.6%, primarily due to new stores and pre-opening expenses, along with information technology and general store expenses. Depreciation and amortization increased 18% to $17 million, reflecting our growth investments in new stores, central processing centers, and automated book processing systems. Interest expense decreased 43% to $16 million due to reduced debt and lower average interest rates. GAAP net income for the quarter was $9.7 million, or $0.06 per diluted share. Adjusted net income was $23.7 million, or $0.14 per diluted share. Second quarter adjusted EBITDA was $80 million, and adjusted EBITDA margin was 20.7%. Turning now to capital allocation, we remain committed to a disciplined approach that funds our growth and strengthens our balance sheet. As our business continues to generate strong cash flow, we will also be opportunistic in returning capital to shareholders. We remain on track for 29 new stores this year, and we expect operating cash flow to be more than sufficient to fund our capital expenditures. We've also taken a number of steps to strengthen our balance sheet this year. In January, we amended our senior secured credit agreement, which, combined with a corresponding upgrade of our debt rating, lowered our borrowing rate spread by 175 basis points. In March, we paid down $49.5 million of principal on our senior secured notes. In April, we terminated our interest rate and cross-currency swaps and realized net proceeds of $38.4 million. And in June, we upsized our revolving line of credit by $50 million from $75 million to $125 million and extended its maturity by one year to 2027. We finished the second quarter with $161 million of cash and cash equivalents, and a net leverage ratio of 1.9 times. Also, during the second quarter, we repurchased approximately 288,000 shares of our common stock at an average price of $11.51 per share. Additional repurchases since the end of the quarter have brought our total to 1.4 million shares repurchased to date at an average price of $10.51 per share. As of today, we have approximately $35 million remaining on our share repurchase authorization. Finally, let me discuss our updated outlook for 2024. Given the continuing macroeconomic headwinds in Canada, we believe a more cautious outlook is warranted. We are lowering our full year 2024 outlook for total net sales to a range of $1.53 billion-$1.56 billion. Comparable store sales to a range of down 1% to up 1%, with the U.S. up low single digits and Canada down low to mid-single digits. Net income to a range of $42,000,000-$56,000,000. Adjusted net income to a range of $82,000,000 -$96,000,000. Adjusted EBITDA to a range of $290,000,000 -$310,000,000. Our full year 2024 outlook remains unchanged for new store openings and capital expenditures. We're still expecting a total of 29 new stores this year, which includes 22 organic openings and the 7 acquired 2 Peaches locations. The 18 stores planned for the second half of the year will open roughly evenly between the third and fourth quarters. We're also closing two stores with expiring leases during the third quarter, bringing net new store growth for the year to 27. Capital expenditures are still planned in the range of $105,000,000 -$115,000,000. Our updated outlook primarily reflects different scenarios for how Canadian macroeconomic trends play out over the balance of the year. Elevated household debt levels and rising mortgage and rent costs are likely to continue to weigh on consumer spending in the immediate future. At the same time, inflation is falling, and the Bank of Canada has recently begun reducing its benchmark interest rate, both of which should eventually help ease pressure on consumers. At the midpoint of our range, we're assuming no material change in macroeconomic conditions in either Canada or the U.S. The low end of the range assumes additional deterioration in the Canadian economy and further reductions in consumer spending in our categories, as well as slightly softer U.S. sales trends. The high end of the range reflects modest improvements in the Canadian economy, beginning in the fourth quarter, and slightly better U.S. sales trends. We expect comparable store sales trends to be slightly better in the fourth quarter than the third quarter for a couple of reasons. First, the previously mentioned Canada Day holiday shift will negatively impact Canadian comparable store sales by approximately 100 basis points in the third quarter, offsetting the corresponding benefit we saw in the second quarter. Second, our prior year comparisons get progressively easier as we move through the second half. Given these dynamics and the timing of new store openings, we expect total net sales dollars to be approximately the same in the third and fourth quarters. We also expect adjusted EBITDA margins will decline by a similar amount versus last year in both the third and fourth quarters, primarily reflecting gross profit margin compression related to investments in new store growth and off-site processing, as well as deleverage on lower sales in Canada, partially offset by continued efficiency gains in our central processing centers. And just a few final details. Our outlook for net income assumes an effective tax rate of approximately 34%. And based on our share repurchase activity to date, we are now projecting weighted average diluted shares outstanding to be approximately 168 million for the full year. This does not contemplate any potential future share repurchases. This concludes our prepared remarks. We would now like to open the call for questions. Operator? Thank you very much. We will now conduct the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. First question comes from Randy Konik with Jefferies. Please go ahead. Yeah, thanks a lot, and good evening, everyone. I guess first, Mark or Michael, maybe give us some perspective on... You know, it sounds like you're doing very you know, fine and stable and good in the U.S. market. So maybe go deeper on that, kind of on that, on those stores first, you know, give us some perspective on the ramp you're seeing, some changes in the cohorts of more recent cohorts versus prior, and what we can expect to head on, on the U.S. store geography first. Thanks, guys. Thanks, Randy. You know what? I think Jubran's probably best suited to answer that. He's here in the room. Jubran, why don't you give a perspective on U.S. new store growth, and I can maybe fill in some things on demographics? Yeah, sounds good. Hey, Randy. Well, as the guys talked about earlier, U.S., U.S. new stores are really strong out of the gate. I mean, as a group, when you take all of our new stores together, they're exceeding our expectations, both top and bottom line. But yeah, U.S. new stores are especially strong, which is very encouraging for our long-term growth plans, because as Michael talked about, it is the U.S. where we have the greatest opportunity for new store growth. Canada stores, performing very close to expectations, admittedly, a little hard to separate on the macro impact. But back to the U.S., I think one of the things that we're most excited about is that it's the reliability of our forecasting and the accuracy of our modeling. What I mean by that is, you know, we've always felt good about our approval process and our pipeline and our pro forma modeling for new stores. But as we sit today, we now have enough stores opened over the last 18 months, 24 months to have actual empirical data to compare to what our models forecasted. Obviously, very important as we think about what is shaping up to be a very robust pipeline of new stores for us, and us having the confidence to place what could be some very attractive pieces of real estate for us as we look forward. So all in all, very pleased with the U.S. new stores. Yeah, on a demographic basis, Randy, just a couple of quick highlights. You know, we're super excited about the continued growth of our loyalty program in North America, up double digits. The U.S., specifically, in terms of some demographic trends. ... What's exciting, and we've talked about this before, both members, non-members, and our new members are all skewing younger, and we have seen the household income of our membership, raise a little—rise a little in that 100,000+ cohort. So a lot of good trends there. Really excited about the continued momentum we're seeing in the U.S. market. Great, thanks. And my, my last question is, obviously, I wanna kind of get some more perspective on the Canadian difficulties. Do you, do you, when you think about the guidance, and you think about current trends, do you think you've kind of captured enough of the potential downside in that market? And, and, you know, have you seen this movie before? You know, can you, when you look back to historical financials and think through, you know, the last time this kind of got difficult or challenged, if at all, in the Canadian market, what happened then versus now? Would be super helpful to get, get some perspective on, you know, kind of when we bottom or if we're getting close to the bottom in, in that, in that market. Thanks, guys. Sure. Sure, Randy. Thanks for the question. This is Michael. You know, I think this particular downturn is unique. And Mark outlined a number of the factors that are pressuring the Canadian consumer right now. And, you know, we see it in the macro data, we see it in the national retail statistics, and we see it in our business. And so it's hard to say with any precision just where that goes in the very near term. We are confident that it is a cyclical moment. We believe that, like all cycles, it will end. But we're not economists, and we're not trying to prognosticate when exactly that will be. So I do think, to your original question, the way we've constructed our guidance and the range that we've put around it is intended to capture the reasonably plausible outcomes over the next six months. On the one hand, you know, the household debt service pressures and cumulative inflationary pressures are not gonna go away overnight. Those will continue to be pressure points on our consumer. On the other hand, inflation is coming down, the central bank has begun easing, and we have seen outside projections that suggest that there could be improvement as soon as the fourth quarter. And so the range that we've established, we think, captures those two possibilities, and that potential turn in either direction is really what drives the width of the range as we sit here today. The U.S. has been remarkably stable. It continues, since the end of the quarter, to run a comp store increase, not materially different from the way we exited the quarter, and so, we really see the variability right now in the near term in Canada. Very helpful. Thanks, guys. Thanks, Randy. [crosstalk] Your next question comes from Brooke Roach with Goldman Sachs. Please go ahead. Good afternoon, and thank you for taking our question. I was hoping you could elaborate on your ability to protect margins against a tougher Canadian macro environment, where a greater proportion of total business revenue growth is coming from new stores rather than like-for-like increases in the base business. Can you potentially quantify the gross profit pressure that you saw between the new stores and processing relative to the deleverage that you saw on fixed costs? Help us walk through the puts and takes of how you're thinking about margin protection going forward. Hi, Brooke, this is Jubran. Maybe I'll just give a little color to the nature of your question, and then, and then Michael can jump in with the rest. But that is. That's absolutely right. That is a unique feature of our business where we can modulate processing levels, which bring with it material costs, and more importantly, labor costs, to match what we're seeing on the demand side and the customer flow side. So as we've talked about over the quarters, we closely manage that. We manage production labor in our stores in response to demand, and it is a balance between preserving profitability but also ensuring steady flow of fresh product to the customer so that on a per-customer basis, we're maintaining the sort of selection and value promise. There are limitations to that. Unfortunately, the softness that we're seeing in Canada, which is very unique, as Michael has said, is honestly beyond the normal range of what we can leverage with processing labor. So we can protect, but with what we're seeing macro, it does lead to some deleverage during the quarter. But we monitor it store by store, week by week, very closely. Yeah, Brooke, this is Michael, and I would just add to that, first off, that even in a difficult macro environment in Canada and a quarter that wasn't up to our original expectations, we still were able to clear a 20% EBITDA margin, which I really think is a testament to the durability of the resiliency of this financial model. As we think about the various puts and takes and what the drivers were, so let's just start with the second quarter. The biggest driver in the deleverage in the second quarter from last year were deliberate investments that we've made, number one, in new stores, and secondly, in off-site processing. To a lesser extent, the third factor was the decline in Canadian sales and some deleverage pressure, as Jubran just said. So to take each of those in turn and talk about how we think about them going forward, as I think you know, new stores open roughly half of our ultimate expectation for mature sales, and they grow rapidly from there. So as we're here now, beginning, you know, early in our new store growth cycle, we are expecting some pressure from that, and that will ramp as we get into the back half of this year because our new store growth starts to accelerate here in the third and fourth quarters. Off-site processing, the other big investment, it does have added costs. There's additional freight, there are overhead costs, and so when we open a new off-site processing facility, especially a large one like a CPC, that just creates some natural deleverage initially. The good news is that as we get better, and as we push volume through these CPCs, as we improve processing efficiencies, we're starting to see those costs per unit come down. And so, you know, we mentioned the Edmonton example, our most mature central processing center, now near parity with processing on site. And so that's a big opportunity. It was a tailwind that helped to mitigate the headwinds in gross margin in the second quarter. We think it will continue to do that. And over time, longer term in this model, as we get to a balance with our growth investments beginning to mature, we would expect that balance to start to tilt more in our favor, and we should be able to continue to sustain those long-run EBITDA margins near 20%. Great, thanks. And then just one quick follow-up. Can you speak to your outlook for AUR and pricing in your U.S. business? What was AUR in the U.S. business this quarter, and are you seeing any additional signs of price sensitivity in your core customer? I can speak to this quarter. So, transactions in basket were both flat, and so, you know, we don't, we don't really get into more granular funnel metrics than that. But, in the U.S., it was low single digits increases in both, and Canada was low single digit decreases in both. We really don't break our guidance into any more granularity than that, though. Great. Thanks so much. I'll pass it on. Your next question comes from Matthew Boss with J.P. Morgan. Great, thanks. So Mark, with the softer economic backdrop that you cited in Canada, so is it the maturity of the thrift market there, or any changes in competition that you think are constraining customer trade down in that market? Maybe what have you seen from Canada in July? And just any actions or company-specific initiatives that you're taking to improve traffic in the back half of the year. Yeah, so we, Matt, good question. We conducted a pretty significant survey of Canadian consumers, and what we are seeing are thrift shoppers. Thrift shoppers are experiencing more financial stress than the general population. While we see some modest trade-down from consumers reducing spend at non-discount retailers, unfortunately, this is more than offset by weakness in the lower-income cohorts, which there tend to be a higher percentage of our core customer base. So I would describe it as they're really sidelined. As their financial pressure has increased, they're sidelined. The good news is that in that same survey, they feel like once their disposable income returns to levels that they're more comfortable with, they will return once that improvement happens. Look, we're already very well penetrated in Canada, and thrift is widely adopted. I think the core data that we're seeing from the Canadian government's retail sector indicate that we're holding our own from a competitive standpoint. We're doing a lot to generate additional traffic through targeted promotions. The engagement metrics that we see in those efforts have been best in class. You know, I'd point to that double-digit increase in member growth, so retention levels there are still very, very high. But we're gonna continue to test tactics to drive traffic and conversion, but we won't do it where it's negative ROI. So we've tested these approaches, we're very mindful of spending good money after bad or bad money after good, however you want to think about it. So hopefully that answers your multifaceted question. Yep, and then maybe just a follow-up from Michael. On gross margin, could you just walk through the puts and takes to consider for gross margins in the third versus fourth quarter? And just what is the timeline for CPCs to reach maturity and cost per unit parity, as you outlined? Sure, Matt. So as far as margin in the second half of the year, let's just go ahead and, for simplicity, use the midpoint of the guidance range, and you can flex up or down from there as you see fit. But overall, at the midpoint, we're looking at a similar margin in the second half to what we had in the first half, and what that implies is more compression versus last year, which is a reflection of new store growth accelerating in the back half of the year, and that being a bigger headwind. The guidance endpoints from there, the variation from there, would just be the varying degrees of sales leverage or deleverage off that midpoint, primarily in Canada, as I said. We do think that the continued improvement in off-site processing costs will help mitigate that margin pressure and continue to do that going forward. As far as how the quarters split up, Matt, I think what I'd point you to is the comments I made about how adjusted EBITDA margin will play out over the third and fourth quarter, and really, that's almost entirely driven by dynamics in gross margin. So essentially, we think that EBITDA margin compression relative to last year will be similar in both the third and fourth quarters, almost all of which is, again, driven by gross profit margin compression as well. And again, it's a reflection of the accelerated new store openings beginning in the third quarter. Yeah, Matt, can I ask Jubran to jump in? Because I think the powerful trend in what we've achieved in Edmonton on a cost per unit basis is just the beginning, and I think there are some real positive signs in our other CPCs about moving in that direction. I think it's a big unlock for our growth moving forward. Yeah. Yeah, it is, Matt, Jubran here. So, you know, we're citing Edmonton only because that was CPC number one. But one of the nice benefits of our learning curve here is that you get to efficiencies faster in subsequent CPCs. So I'll give you an example. Our location in Hyattsville, Maryland, which some of you are actually familiar with and may have had a tour in, that facility has been open a year and a half and is operating at a unit cost parity, if not even a touch better than Edmonton, in a far shorter timeframe. So as we think about the 5 CPCs we have now, we have a sixth planned for Southern California, which will open early next year. The maturity curve on these things has really come down to a point where you get to parity, as Michael talked about, in terms of cost per item, equivalent to what a traditional store would do for itself, and that obviously has massive implications for us, like Mark talked about, for new store growth. Great. Best of luck. Thanks, Matt. Once again, if you'd like to ask a question, please press star, then 1 on your touch tone phone. Your next question comes from Peter Keith with Piper Sandler. Hey, thanks. Good afternoon, guys. Was unclear on the guidance reduction. It looks like both sales and EBITDA were taken down by $35 million at the midpoint. So I understand the sales deleverage dynamic, but, can you help us understand that, that margin flow-through and, and why the EBITDA comes down so much? Yeah, Peter, this is Michael. So, you know, we talked about what's behind the reduction in the sales. We do have some mitigation reflected in there in terms of managing labor to match that. As Jubran mentioned earlier, we're not able to completely offset that at a certain point. We've got to have a minimum amount of labor to just ensure a continued flow of new product onto the floor. The rest, honestly, the rest of the changes are pretty immaterial, very small items in expense, puts and takes, and it really comes down to the reduction in Canada sales. Is the CPC margin headwind and new store margin headwind a little bit greater than you expected? No. No, we had contemplated that before. I think just as you bring down sales to a certain point, the deleverage pressure, which was the other element of our gross margin headwind in the second quarter, just starts to become a greater factor. Okay. All right. And then, for Mark or Jubran, one theory going around out there just is regarding your pricing analytics, and we know you have very good analytics, so when sales are strong, you can take up prices by store, by category. But the theory out there is that the analytics don't tell you to take prices down. And so is that correct? And could you be in a situation where in Canada you have taken up the price and maybe things are weak because you've, you've outpriced some of the competition? We are always engaged in understanding our price value relationship. It is something that the field operations team puts a lot of energy into, so we're monitoring that closely. We don't feel like we are askew from that particular dynamic. If we do, we'll make adjustments for sure. But we're looking at competitive data all the time, where we're cross-shopping stores in terms of competition to make sure that we are in line. I know personally, I've been in 50-odd stores in the last 3 months, and our price value relationship remains strong. And at $5, it's still a pretty powerful value proposition. Yeah, and Peter, this is Jubran. The only thing that I would add is double down on what Mark mentioned earlier, that, you know, we're not sitting still. All the analytics, all of the competitive intel that Mark just talked about is valid, but we're also tinkering and testing, test and learn on some more aggressive pricing and discount approaches in select stores to see if there's something that we can hit upon that will help mitigate the macro that we're seeing. So I think it's a blend of things, and I think we'll continue to learn. Very good. Thanks so much. Your next question comes from Michael Lasser with UBS. Please go ahead. Good evening. Thank you so much for taking my question. Outside of the relative maturity of each market, what is different about Canada and your stores there that would make it not a leading indicator for what might happen in the U.S. if macroeconomic conditions decline in this country? Well, I think, look, I think part of it is you have to start with the macroeconomic environment is very different in Canada right now. U.S. has much lower unemployment and certainly, much lower household debt. Thrift is in a much earlier stage of maturity, and there's a lot of secular growth available. You know, on the flip side of that, Canada is, for us, 95% brand awareness, penetration, our estimate, in one of three households. It's just a very... They're apples and oranges, Michael. And I do think what we're seeing in the data that we've gotten over the last 3 months really indicates that core, you know, part, a good portion of our core customer is under significant financial pressure, and the discretionary choices they're making are really sidelining them from coming into our environment. But I will point to the fact that we grew our database, our loyalty program, double digits, even in face of that. So I think there's still a lot of momentum in both countries. We're just going to continue to monitor that situation and operate the business in a way that gives us firm footing coming out of that negative macro environment cycle. Got you. Mark, my follow-up question is, and either you or Michael or Jubran can comment on this. It's been about a year since the IPO, and the business has been a little bit more challenged than what you had anticipated coming out of the gate. So, A, outside of the macro, is there anything that you would attribute that more challenging manageability to drive the business to? And, B, what do you think the new or updated algorithm for the business in terms of new stores, comp growth, margins as we look to 2025 and beyond? Yeah. So I'll start, and I think Michael will jump in. You know, when we set the table for the IPO, I look back a year from a year ago and say: Well, our U.S. business has been right where we said it was gonna be. Australia has performed better than we had hoped. We've opened up our off-site processing facilities in an efficient manner, and they're now performing at a level that we didn't even anticipate. They're even better than we had hoped. The new store, I think the new store piece of the equation was always the biggest challenge. Right on target, they're delivering sales and EBITDA in line with our expectations. I don't think we could have ever foreseen what has happened in Canada, so therefore, I would score the organization pretty highly on executing what we articulated we would execute going into that IPO. I think we're managing through, hopefully, a generational issue in Canada, and we'll come out the other side, as we did with the pandemic, in a good place and stronger than when we started. And, Michael, you wanna touch on that as well? Yeah. Yeah, Michael, let me speak to your question about the long-term growth algorithm. So, you know, I wanna be clear, first of all, I'm not specifically speaking to 2025. We'll obviously have more to say about that in, in a while, but as we look at the long-term model, we continue to see high single-digit annual revenue growth, and it will be driven primarily by new stores. And our recent track record on new stores and the pipeline that we have in front of us gives us a lot of confidence that that will be our long-term growth driver. We think comps, we will plan on probably something in the low single-digit range for comps, with the U.S. higher than Canada. Mark just mentioned Canada is a more mature business for us. Thrift is a more mature sector, and so all of that adds up to the U.S. being the growth driver. We have a lot of runway there. We have a lot of our new stores will be placed there, and as those stores become comp stores, they should result in accelerating comp store growth in the U.S. or at least elevated comp store growth relative to Canada. I think as far as the profitability, we should be able to continue to support EBITDA margins near 20% as those growth investments in new stores and off-site processing capabilities start to mature, and the initial headwinds that we're seeing today start to convert into tailwinds. Again, early signs of which we've already seen. So I think no real material change to the totals or the headlines out of that model may be a little bit different in the shape of it, but at the end of the day, we feel really confident in that. Thank you very much. Once again, if you'd like to ask a question, please press star, then the number one on your touch tone phone. Your next question comes from Mark Altschwager with Baird. Please go ahead. Hi, this is Amy Teske on for Mark. Thank you for taking our question. I wanted to dig in on supply. Last quarter, you noted you were in a bit of an oversupply situation, so wondering an update on how you view your current supply levels, and then more broadly, any commentary on the quality of your supply and your supply mix. Yeah. Hi, Amy, this is Jubran. Good question. So yes, that's right. Last quarter, we were in a temporary oversupply situation. I would tell you that that has been solved, partly because of some moves that we're able to make to effectively kind of open a pressure relief valve and sell off excess, but also because of the new store pipeline that's just gotten more and more robust. So we look 18 months out when we're planning supply, and there are some new stores on the docket that weren't there 3 months ago that are gonna consume some of that. So as we think about, you know, the drivers of supply for us, on-site donations, robust performance, as Mark talked about earlier, GreenDrop, our nonprofit partner delivered supply. It really is multifaceted, and we look at this market by market. So we continue to see strong OSD growth. We can flex delivered product as we need to. We are looking 18 months out. We've always done that. I would tell you- ... That discipline is more at a premium today than at any time because of all the new stores that are coming. So we feel great about our supply situation. We feel great about the supply that's gonna feed the rest of the stores that will open in 2024, as well as the stores that we're gonna open in 2025. And then we're always looking to cultivate, to look at the long-term equation, knowing that we're gonna be opening 25, 30+ stores per year going forward. As far as the other part of your question, Amy, on quality, we have not detected any change in the average quality of what is flowing through our supply stream, be that delivered product, GreenDrop, or on-site donations. We just are not able to detect that it's changed in any meaningful way. Hopefully, that ans- Great ... answers your question. Yes. Great, thank you. And then I was also hoping you could provide an update on GreenDrop and where you are tracking to your 20-25 opening target. Thank you. Yeah, absolutely. GreenDrop continues to progress. We're opening up new locations. I'd say we're probably closer to the low end of that range. Again, we've talked about this before. I mean, GreenDrop brings all of the elements that we know drive donations, convenience being number one. Reliably fast, friendly, and part of the daily, weekly routine for the donor. So municipalities love it, landlords love it, donors obviously love it. The challenge is there's still an education process that has to happen because when you think about land use and municipal approval, GreenDrop is one of these attractive collection mechanisms that's actually not contemplated in a lot of the municipal land use codes that we run into. So it's all part of the process. We have the team built, we have the assets, we have the know-how. We're tracking the performance of the new locations that we've opened over the last 18 months, and they're doing very well. So yeah, we'll continue to open these things, and it'll be an important feeder of supply into the future. Great. Thank you. Best of luck. We have no further questions at this time. Mr. Walsh, I will turn the call over to you for closing comments. Thank you, operator. I'd like to thank everyone for their time and interest in Savers Value Village, and we look forward to speaking with many of you in the days and weeks to come. Thank you very much. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.