管理層發言
Good afternoon, ladies and gentlemen. Welcome to Savers Value Village's conference call to discuss financial results for the third quarter ending September 27, 2025. 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 and historical performance. Please review the disclosures on forward-looking statements included in the company's earnings release and filings with the SEC for a discussion of these risks and uncertainties.
Please be advised that statements are current only as of the date of this call, and while the company may choose to update these statements in the future, it is under no obligation to do so unless required by applicable law or regulation. The company may also discuss certain non-GAAP financial measures. A reconciliation of each of 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 management on today's call are: Mark Walsh, Chief Executive Officer; Jubran Tanious, President and Chief Operating Officer; Michael Maher, Chief Financial Officer; and Ed Yruma, Vice President of Investor Relations and Treasury. Mr. Walsh, you may go ahead, sir.
Thank you, and good afternoon, everyone. We appreciate you joining us today. We are pleased with our third quarter results, particularly in the U.S., where our momentum remains strong. Comps continue to strengthen in Canada, but challenging macroeconomic conditions remain a headwind there. Let me start with a few highlights from the quarter. Sales in our U.S. business grew 10.5% with comp sales up 7.1%, driven by both transactions and average basket. These results underscore our strong operational performance as well as an accelerating secular thrift trend. Powerful results like these reinforce our enthusiasm for the long-term growth opportunity in the U.S. In Canada, our business made further progress, delivering 3.9% comp sales growth, an acceleration of 130 basis points from the prior quarter, marking the fourth consecutive quarter of sequential improvement. The Canadian macro environment remains very challenging, and we continue to lean into selection during the quarter while taking steps to better align production with demand trends going forward, which Michael will go over in more detail.
We opened 10 new stores in the quarter and still expect to open 25 new stores in 2025. As a class, our new stores continue to perform in line with our expectations delivering strong unit economics. We remain confident in our long-term store growth opportunity and a targeted 20% store-level contribution margin. Turning to our loyalty program, we reached approximately 6.1 million total active members. Financially, we generated $70 million of adjusted EBITDA in the quarter or approximately 16.4% of sales. Additionally, our strong cash flow generation and an attractive debt market allowed us to opportunistically refinance our debt, which will significantly reduce our interest expense and give us a more flexible capital structure. Just as a reminder, we do not have any direct impact from tariffs. We continue to monitor pricing trends closely, and I feel very good about our competitive positioning and value gaps as new clothing and footwear pricing begins to increase in the U.S. Finally, based on our results year-to-date, we are tightening our revenue and earnings outlook for 2025.
Michael will provide additional details on our outlook in his remarks. Parsing our results by geography, let's start in the U.S. where momentum is especially strong. We are thrilled to post a 7.1% comp, which I will point out is coming from a mature store base as the majority of our 2024 class will not begin to enter the comp base until the fourth quarter. This speaks to our compelling assortment at great value and the consumer-friendly shopping experience that we offer as well as the accelerating secular adoption of Thrift. As we've noted in previous calls, we continue to see growth in our younger and more affluent customer cohorts. In Canada, the economy remains challenging, but it has not impacted everyone the same. For example, tariffs and trade tensions have disproportionately impacted certain regions such as Southwest Ontario, a key market of ours where the automotive industry is a large portion of the local economy.
Meanwhile, unemployment is above 7%, and lower income consumers have seen little or no disposable income growth plus higher-than-average inflationary pressure in nondiscretionary categories like food, shelter and transportation. Against this backdrop, we are leading with a compelling selection, which helped drive positive comps over the past year, although we do think that the near-term Canadian comp upside will be limited by macro pressure. Throughout the third quarter, we actively worked to calibrate production and meet demand, making careful and targeted adjustments in response to sales trends. Exiting the quarter, Canadian comps leveled off at the lower end of our expected range, and we continue to drive improved gross margins also at the lower end of our expected range. We remain laser-focused on giving our Canadian consumer great value through sharp pricing and compelling selection.
We are controlling what we can control, and we will manage the Canadian business with the expectation that macro conditions may limit our growth in the near term. Moving on to new stores. We continue to be pleased with the results we are seeing. And as a whole, they are performing in line with our expectations. As new stores continue to mature as expected, they are beginning to contribute to an inflection in our profitability. We are especially pleased that our U.S. and Canadian segments had year-over-year profit growth this quarter for the first time since 2023, and we expect to return to profit growth at the enterprise level in the fourth quarter, putting us on track for our previously stated goal of annual profit improvement in 2026. We opened 10 new stores during the quarter and are on track to open 25 new stores in 2025. As the 2026 lease pipeline has started to round out, we're expecting a roughly similar number of openings next year, but the focus of our new store growth going forward will even be more U.S.-centric as we believe the secular adoption of Thrift remains in the early innings, and we still have a significant amount of geographic white space.
To this end, we're excited to enter new markets in 2026, including North Carolina and Tennessee. Store growth remains the highest return and most important use of our capital, and we could not be more pleased to bring our compelling value proposition to more consumers throughout the U.S. Finally, we recently released our 2025 Impact and Sustainability report, which can be found on our Investor Relations website. We are a mission-driven business, championing reuse and looking to inspire a future where secondhand is second nature. This report highlights the impact and circularity ingrained in our model, and I am proud that over the past 5 years, we have kept 3.2 billion pounds of usable items out of landfills and paid our charitable partners over $490 million. We hope you will take the time to review the report and our commitment to community impact, sustainability and sound corporate governance.
I would like to conclude my remarks by thanking our more than 22,000 team members for their hard work and commitment. As a team, we are more energized than ever as we see the fruits of our labor with more people choosing us every day, whether it be due to our treasure hunting experience, exceptional assortment at sharp value or to contribute to the circular economy. 2025 continues to be a success. While macro pressures persist, I believe that our value proposition positions us well. Now I'll hand the call over to Michael to discuss our third quarter financial performance and the updated outlook for the remainder of 2025.
Thank you, Mark, and good afternoon, everyone. As Mark indicated, we had a strong third quarter. Total net sales increased 8.1% to $427 million. On a constant currency basis, net sales increased 8.6% and comparable store sales increased 5.8%. We are especially pleased with our double-digit growth in the U.S., where net sales increased 10.5% to $235 million. Comparable store sales increased 7.1%, driven by both transactions and average basket. We also saw our fourth consecutive quarter of sequential improvement in Canada, where net sales increased 5.1%. On a constant currency basis, Canadian net sales increased 6.1% to $161 million and comparable store sales increased 3.9%, fueled by an increase in transactions and average basket. While we are pleased with another quarter of positive comps, we believe that ongoing macro pressure places a near-term ceiling on Canadian comp store sales. Given the sluggish Canadian economy, we do not assume that conditions will change materially in the near term.
Cost of merchandise sold as a percentage of net sales increased 80 basis points to 44.1% due to the impact of new stores and deleverage due to higher processing in Canada, partially offset by growth in on-site donations. Gross margins improved by roughly 100 basis points over the first half of the year, and we materially narrowed the gap versus last year as we lapped new store growth. We expect this trend to carry into the fourth quarter as new stores continue to ramp. As Mark previously indicated, Canadian comp sales trends have leveled off at the lower end of our expected range with a corresponding impact on gross margins as we work to balance production levels throughout the quarter. Salaries, wages and benefits expense were $85 million. Excluding IPO-related stock-based compensation, salaries, wages and benefits as a percentage of net sales increased 220 basis points to 18.8%. The increase was driven primarily by new store growth, an increase in annual incentive plan expense and higher wage rates.
Selling, general and administrative expenses increased 19% to $100 million, and as a percentage of net sales increased 200 basis points to 23.3%, primarily due to growth in our store base. SG&A expenses also included a $4 million impairment charge for the planned closure of 6 underperforming stores during the fourth quarter. This includes 3 of the 2 Peaches stores that we converted during the second quarter, whose post-conversion results were not meeting our expectations, along with other stores in the U.S. and 2 in Canada. We concluded the closure of these 6 stores would be EBITDA-accretive in 2026, and we expect nearby stores to absorb much of the sales volume from the closed locations. Our store fleet remains healthy with almost all comp stores generating positive EBITDA. In addition to the impairment charge, SG&A also included $2.1 million of debt refinance costs and the year-over-year change in fair value of acquisition-related contingent consideration.
Depreciation and amortization increased 6% to $18 million, reflecting investments in new stores. Net interest expense increased 12% to $17 million, primarily due to the impact of unwinding our interest rate swaps last year, partially offset by reduced debt and lower average interest rates. As we disclosed during the quarter, we took advantage of a strong market and refinanced our debt. As a result of the refinancing, we expect interest expense savings of approximately $17 million on an annualized basis. For modeling purposes, this translates to an estimated interest expense of $14 million for the fourth quarter and $52 million for fiscal 2026. We incurred a $33 million loss on extinguishment of debt as part of the refinancing. GAAP net loss for the quarter was $14 million or $0.09 per diluted share. Adjusted net income was $22 million or $0.14 per diluted share. Third quarter adjusted EBITDA was $70 million and adjusted EBITDA margin was 16.4%.
U.S. segment profit was $48 million, up $3 million versus the prior year period, primarily due to increased profit from our comparable stores, partially offset by the impact of new stores. Canada segment profit was $45 million, up $0.4 million versus the prior year period due to improved comparable store performance, partially offset by the deleveraging of cost of merchandise sold as a percentage of net sales, primarily associated with our efforts with Canadian production levels to maintain demand as well as a weaker Canadian dollar. This marks our first year-over-year increase in both U.S. and Canadian segment operating profit since 2023, highlighting our imminent inflection in total company profitability as new stores continue to mature. Our balance sheet remains strong with $64 million in cash and cash equivalents, and a net leverage ratio of 2.7x at the end of the quarter. Our updated capital structure gives us increased liquidity through a $55 million expansion in our revolver capacity, extended debt maturities through 2032, and significant flexibility to pay down debt in the future.
Our strong cash flow generation will enable us to further deleverage our business as we target a net leverage ratio of under 2x within the next couple of years. We are also pleased to announce that our Board of Directors approved a new $50 million share repurchase authorization. We will continue to take a balanced approach to capital allocation as our strong financial model allows us to fund organic store growth, reduce debt, and opportunistically repurchase shares. Finally, I'd like to discuss our updated outlook for the remainder of fiscal 2025. Our U.S. business remained strong entering the fourth quarter, while in Canada, macro pressures continue to weigh on results. We've made strides in better calibrating sales and production and are planning for Canadian macro conditions to remain challenging for the near term, with roughly flat Canadian comps in the fourth quarter. Our updated full-year outlook for 2025 now includes the following: net sales of $1.67 billion to $1.68 billion, reflecting a weakening of the Canadian dollar since last quarter; comparable store sales growth of 4.0% to 4.5%; net income of $17 million to $21 million or $0.10 to $0.13 per diluted share; adjusted net income of $71 million to $75 million or $0.44 to $0.46 per diluted share; adjusted EBITDA of $252 million to $257 million; capital expenditures of $105 million to $120 million; and 25 new store openings.
Our outlook for net income assumes net interest expense of approximately $62 million and an effective tax rate of approximately 41%. For adjusted net income, we are assuming an effective tax rate of approximately 26%. This concludes our prepared remarks. We would now like to open the call for questions.
分析師問答
First, we will hear from Randal Konik at Jefferies.
Let's delve deeper into Canada. You provided some insights about the top line showing continued improvement and mentioned the macro environment. Can you elaborate on that? Additionally, you mentioned some processing issues affecting margins. It seems that this is something that can be addressed and improved in terms of efficiency. Could you provide more details regarding the processing aspect?
Randy, thanks. To recap, the third quarter marked another step forward in Canada. We want to emphasize the sequential improvement in the fourth quarter and, more importantly, the first quarter of profit growth since 2023. However, we continue to face macro challenges. Unemployment remains stubborn, with rates just below 9% in the Greater Toronto area and over 10% in Windsor, which is a crucial market for us. While we made progress in the third quarter, we still have more work to do, and our performance in Canada was at the lower end of our expectations. Our tactical focus is on delivering sharp value, maintaining an average unit retail of USD 5, and managing our price gaps to protect and capture market share. Given the limited growth and rising wages, we need to enhance productivity through process improvements that result in cost reductions without affecting the consumer experience. Michael and Jubran's team is actively addressing this challenge. Lastly, from a corporate standpoint, it's essential to note that we plan to allocate 75% to 80% of our growth capital in 2026 and beyond to the U.S., where we see significant potential and momentum.
Yes. Hi, Randy, and thanks, Mark. Well, it really comes down to the 3 or 4 things that we can control. And to be clear, and I think Michael mentioned this earlier, as we sit today, we are balanced between sales and production and feel very good about that going forward. But again, around controlling the controllables. I mean the first thing is providing the selection and value that our customers expect. And we believe we're doing that. In fact, our own internal surveys tell us that customer perception of both price and selection has increased year-over-year as we look to put out the right items in the right amount at the right price. The second thing that we can control, and Mark alluded to this, is being as efficient as we possibly can be in delivering that selection to our customers. Again, ours is a labor-intensive model, but our teams do an excellent job at executing as efficiently as possible.
And frankly, we'll continue to do that through the remainder of the year. And we are relentless about looking for tactical and innovative ways to improve labor efficiency. So we've got a few things in the hopper that we're looking forward to as we get into 2026. And then finally, growing on-site donations. We've talked about this in the past. It's really about how you show up to the donor in terms of being reliably fast, friendly and convenient. That is something that we control entirely. And we measure it not just in terms of on-site donation growth, but also donor sentiment and satisfaction. And our own internal voice of the donor surveys tell us, that overall satisfaction is north of 90%. So we feel good about that. So yes, overall, in terms of controlling the controllables, I think we're doing that amidst an otherwise challenging macro.
Yes. Super helpful. I guess last question. Obviously, this U.S. business feels really good. Any color you can give us on the traffic or the transactions that are being done with existing customers versus new to file. I'm sure that you're getting a healthy amount of new customers entering the business. It'd just be helpful to get some perspective there. And any kind of feel for what the awareness level is for the banner in the United States right now? Obviously, again, it seems like we're still very early innings in this U.S. story going forward.
Yes, Randy, that’s a great question. Transactions and basket size have definitely contributed to our comps, and we’re seeing a strong increase in our loyalty program in the U.S., which is maintaining its momentum. Additionally, we are encouraged by the new consumer demographics we are attracting. The higher household income segment is representing a larger share of our customer base. There is a clear trend of trading down, and our younger customer group is also growing. We couldn’t be happier with these results. I believe this is mainly due to an excellent store experience, a unique and compelling merchandise mix, and significant value offerings. All of this contributes to the ongoing positive trend. Consumers are responding favorably, and we are very satisfied with this trajectory.
Next question will be from Matthew Boss at JPMorgan.
So Mark, could you elaborate on the cadence of same-store sales over the course of the third quarter in the U.S.? Maybe just comment on what you're seeing in October? And then you mentioned the value gap. So how you see your value proposition positioned in the U.S. maybe against the broader marketplace?
Thank you, Matt. I'll begin by discussing the value gap. Michael will provide details on the October performance and what we've been observing. We invest considerable effort in understanding our position relative to our competitors, which we define in two categories: thrift competitors and discount retailers. We collect a significant amount of information, and as I've mentioned in earlier calls, we're aware of what’s happening in our stores and nearby at places like TJX and other discount outlets. Our aim is to maintain a price gap of about 40% to 70%, ensuring that we offer compelling value to our thrifty customers. I believe we are achieving this in both the U.S. and Canada. We track these metrics in both regions, and our focus is on consistently delivering that price-value gap to our customers across the Value Village and Savers brands.
Matt, it's Michael. So your question about the cadence of our comps. So as we expected, the comps were strongest in July, eased slightly in August and September as we expected because we are starting to go up against tougher compares last year. As we've kicked off the fourth quarter, what we're seeing thus far is continued strength in the U.S. We continue to be really pleased with the momentum there and continued moderation in Canada. Now we have had a warmer-than-usual start to the fall that weighed on our results a little bit in late September and early October. Over the last week or so, as the weather has cooled, we're starting to see that improve. But as I mentioned in my remarks, we're assuming roughly flat low growth in Canada for Q4 and planning conservatively given what we see in terms of the macro.
Great. And then, Michael, on gross margin, maybe could you help break down the drivers of the 80 basis point contraction in the third quarter? Maybe just some gross margin puts and takes that we should consider for the fourth quarter, anything to be mindful of for next year at this point?
Yes, you got it. As we mentioned on the last call, we anticipated narrowing the gap from the first half, and we succeeded in doing so. The primary reason for the year-over-year gap continues to be our new store growth, which is shrinking as these stores are progressing according to our expectations. Another factor this quarter was the Canadian processing. We noted that comparable sales were at the lower end of our expected range. We were cautious and intentional about reducing processing to avoid repeating the mistakes from last year that led to a premature choke on demand. This decision did affect our margins this quarter. However, as Jubran mentioned earlier, we exited the quarter at an equilibrium point where processing and demand were well aligned. Additionally, the underperformance of the two Peaches and the closure of three underperforming stores were also significant factors. I expect the gap compared to last year to continue to narrow in Q4. We are moving forward with our new store pipeline, and these stores are maturing and ramping up well, which is helping us towards that inflection point we discussed. Improvements in Canadian processing should also contribute to further narrowing of the gap in the fourth quarter.
Next question will be from Brooke Roach at Goldman Sachs.
Mark, I was hoping to get your thoughts on new market expansion for the Savers brand given the announcement to enter Tennessee and North Carolina. What did you learn from the 2 Peaches stores that you're closing that can help you ensure that new market expansions will be successful?
I can jump in.
Sure Jubran, why don't you jump in.
Yes, Brooke, this is Jubran. I can help provide some color. Yes, we converted the 2 Peaches stores per plan, and it's really pretty straightforward. I mean we had 3 of them that we converted, and frankly, didn't like the performance on them. So we acted quickly to close them. But I think your broader question is in kind of higher level, our strategic goal was always to enter the U.S. Southeast, where we previously had no presence and we wanted to take advantage of all that white space. So while we're closing these 3 acquisition locations, the local supply that we now have in our mix will help us feed those new organic stores in 2026, where I think Mark mentioned that we will be opening our first store in Tennessee, our first stores in North Carolina and an additional store in the Atlanta market. Very excited about these locations. These are, again, exciting centers that we think are going to show strong of our first stores in those states. So we continue to stay enthusiastic about our expansion opportunities in the Southeast.
Great. And then maybe a follow-up for Michael. As you contemplate the modestly lighter EBITDA margin guide that you've provided for the back half of this year, how should we be thinking about the path back to EBITDA margin expansion into 2026? Do the recent pressures in the Canadian business impact your view on the cadence and magnitude of improvement that you could see into next year?
Thank you, Brooke. Our perspective on the near and longer-term financial outlook remains unchanged. To reiterate, we anticipate high single-digit total revenue growth over the long term, primarily driven by new stores. Looking ahead to next year, while I’m not providing guidance, it’s important to note that we will return to a 52-week year after this year’s 53-week year. This means we will lose the 2 points of revenue we gained this year. Nonetheless, we still project low single-digit comparable sales growth over the long term. Currently, it appears that Canada will see low single-digit growth, while the U.S. is expected to be in the mid-single digits, averaging out to low singles overall. We also maintain our outlook for high-teens EBITDA margins in the long term, which we have consistently mentioned. I do not foresee a significant change next year as we need to keep developing our new store pipeline and allow it to mature. We believe that EBITDA margins are at their lowest point this year, and we anticipate some modest growth in 2026.
Next question will be from Mark Altschwager at Baird.
Just following up on the U.S. momentum. Can you talk about the opportunity in pricing given the quality of supply you're seeing and the inflation you're beginning to see within the U.S. apparel market?
Yes, Mark, we are starting to notice new increases in apparel and footwear prices. If the gap widens significantly beyond the 40% to 70% range I mentioned, it provides us with advantageous options, whether to gain market share, implement modest strategic price increases, or do both. This situation will emphasize our strong value proposition in the market, and we see it as a significant opportunity for our future growth.
And just on Canada, you've made a handful of comments here as we think about Q4 and into 2026. But I guess, guiding flattish Q4, I think you just said low-single digit is kind of your baseline expectation for next year. I mean I know you're not guiding, but comparisons do begin to get tougher next year as you cycle the recovery or the improvement you delivered this year. So maybe just help us understand the factors that could drive sort of a stable low single in Canada given the macro headwinds you outlined.
Yes, Mark. So I think the assumption is that we're going to continue to focus on the things Mark talked about earlier in terms of sharp value, great execution, we are seeing sort of stability there. The macro is growing, albeit slowly. And so we do think that we can sustain low, and we're going to plan for conservatively low single-digit comps in Canada and hopefully outperform that, but we'll stay cautious in terms of the planning. And like I said, we continue to see really strong momentum in the U.S. And so we're more in the mid-single-digit range there, comfortably in the mid-single-digit range in Q3, obviously. And so we remain confident that we can average that out and something around a low single-digit overall comp.
Next question will be from Bob Drbul at BTIG.
I have a couple of follow-up questions. Regarding the two Peaches locations that you updated and then closed, what have you learned about why those stores didn't succeed? Also, can you discuss your entry into new markets like Tennessee, North Carolina, and the other store in Atlanta? How are you approaching these markets and what marketing efforts are being made for those stores and this initiative?
So Bob, it's Mark. Regarding the Tennessee and North Carolina stores, we will follow the same strategy we use for all our new store openings. We have excellent real estate and strong traffic patterns, and establishing a community donation center is a top priority for that facility, which is essential for our long-term goals. We usually kick off with an event and then conduct paid search marketing around it, which has proven very effective in our past three years of store openings in the U.S. We are confident in our strategy and believe the success rate will be similar in North Carolina and Tennessee. Regarding the 2 Peaches, as Jubran noted, we converted those stores three months ago. Initially, we were not satisfied with their performance and aimed to improve our EBITDA outlook for 2026 and ensure it was accretive. Consequently, we made the swift decision to close them based on our assessment of the potential growth in those areas. We feel positive about this choice and are pleased that we are positioning ourselves for 2026 accretion instead of persisting in an unproductive situation.
And the only thing I would add to Mark's comments is we've got our first stores in Tennessee, North Carolina, and a new one in Atlanta. What we didn't mention is that behind that, we have a growing and robust pipeline of other attractive locations that are slightly behind those stores but are equally appealing in terms of site quality, demographics, and the trade area where we will be operating. So, as Mark said, we are pretty excited about the future for us in the Southeast.
Next question will be from Michael Lasser at UBS.
So the macro is getting worse in Canada, why are you not seeing the trade down? And if the macro remains challenged in 2026, how far are you willing to sacrifice the profitability of the U.S. business to support the Canadian segment?
I will address the first part of your question, and Michael will respond to the second part. We are witnessing a trade down in Canada, similar to what we see in the U.S. I didn't mention it earlier because my initial response focused on the U.S. However, like in the U.S., our key demographics, particularly high-income households and younger consumers, are also expanding in Canada. We're very pleased with how our loyalty base is evolving there, and we are indeed observing a trade down, although perhaps not to the extent we see in the U.S. Nonetheless, we are definitely experiencing it.
Yes, Michael, this is Michael. I didn't quite follow the second part of your question about Canadian versus U.S. profit in 2026. Can you repeat that?
Yes, you took down the guide because of a slowdown in the Canadian business for the fourth quarter. If we assume that continues into next year, do you have to sacrifice some of the improving profitability in the U.S. business to support the Canadian business? Or alternatively, if you experience deleverage on the Canadian business, to what degree is that going to eat into the profitability of the U.S. business?
I understand. We're not ready to provide guidance for 2026 just yet. However, as Mark mentioned earlier, we are planning for a slow growth business in the near term. This requires precise execution and a strong focus on cost management in Canada. We believe that with a low single-digit growth rate, which we consider sustainable for next year, we can control costs effectively to meet our bottom line goals. Additionally, we are pleased with the positive momentum in the U.S. market, which is our growth area. Therefore, we will be focusing our new store expansion primarily in the U.S. Going forward, we do not see any changes to our financial outlook in either the near or long term.
Next question will be from Peter Keith at Piper Sandler.
This is Alexia Morgan on for Peter. My first question is a clarification on guidance. Could you elaborate on the key drivers behind the narrowing of your EBITDA guidance and lowering the range at the high end? Was that primarily due to Canada? Or are there other factors that went into that recalibration as well?
Yes. Canada is the largest factor. So that was really the biggest variable going into the back half of the year for us. We were going up against some really challenging business from a year ago. As we mentioned, we saw the comp settle out at the lower end of our expectations there. And processing had to follow, but it did follow. And so we had some additional pressure on margin in the third quarter. And so that is the biggest driver of sort of the narrowing of the guide toward the lower end on EBITDA. To a lesser extent, it's the 2 Peaches performance that we talked about earlier.
Okay. And then one more on tariffs. I know you're not exposed to tariffs, but considering just the price increases being seen broadly across the industry, have you noticed any interesting mix shift in your sales? Or are there certain categories of yours that you think might be outperforming and indirectly benefiting from prices raising across the industry?
We have not seen that phenomenon in our sales metrics.
Next, we will hear from Owen Rickert at Northland Capital Markets.
Just quickly on the automation front, have you started to see any tangible benefits from the new centralized processing centers and automated book systems? And maybe secondly, what's the latest thinking around CapEx as you continue to roll those out?
Why don't I discuss the CPC while you handle CapEx. Owen, this is Jubran. Yes, we've made progress in terms of efficiency and effectiveness with the automated book processing, and I'm very pleased with that progress. However, I don't believe we'll ever reach a point where we can say we've fully arrived. There remains a vast amount of opportunity that we see ahead. I dedicate a significant amount of my time and focus on this area, especially as we look towards 2026 and the potential for increased efficiency and effectiveness in those facilities. There are many opportunities for us. While I can't delve into specifics right now, we have various tactics in development that we believe will benefit us in the future.
Yes, Owen, this is Michael. Owen, on your second question about CapEx. So again, we'll give more specifics when we guide for next year. But we have said that the current level at roughly a high single-digit percentage of revenue is probably pretty indicative of where we'll be as long as we are in this growth mode. And most of that investment is going to be in growth and in new stores. It may include amounts for additional enablers like off-site processing facilities or other technology investments as well. But overall, that's probably a reasonable envelope.
At this time, Mr. Walsh, it appears we have no other questions, sir. Please proceed.
We'd like to thank everyone for their time today and their interest in Savers Value Village, and we look forward to connecting with you after our fourth quarter. Thanks again.
Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your line.