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The stock of thrift store chain operator Savers Value Village (SVV +1.12%) has landed in the discount bin.

The retailer announced a secondary stock issue at a relatively bargain price, which dampened investor sentiment on the company. Its stock was down by more than 11% week to date as of Thursday evening, according to data compiled by S&P Global Market Intelligence.

Reduction of the majority stake Savers initially announced the sale after market close on Monday. It wrote that affiliates of the company's majority stockholder, alternative investment company Ares Management, were unloading 15 million shares of its common stock for $10.25 apiece in a public offering.

Image source: Getty Images.

The sale was soon upsized to 20 million shares, with the issue's underwriters granted an option to collectively sell an additional 3 million.

Savers stressed that it would earn no proceeds from the sale, as it wasn't part of the selling syndicate. In fact, it bought just over 1 million shares from the underwriters' allotment.

Neither Savers nor Ares provided a reason for the latter's share divestment. It won't change Ares' ownership position, as the company will continue to hold a majority after the offering is completed.

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Exit velocity I feel Ares is doing what companies like it always try to do -- exiting an investment at an opportune and suitable time. The company first bought into Savers in 2019, and it's likely time to produce some financial returns from this. I doubt this is a panic sale.

That $10.25-per-share price was well below the $12.29 level at which the stock closed just before the announcement of the issue. Also, the sale of 23 million shares at once had quite an impact, given that the total shares outstanding tally was a bit over 154 million.

Since Ares likely isn't making a desperation move here, I'd consider this as an opportunity to -- appropriately -- own Savers stock at a discount. The company increased its net sales by over 7% in its recently reported second quarter and its headline net income by 14%, so its fundamentals look rather healthy.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Savers Value Village. The Motley Fool has a disclosure policy.

3 Reasons Wall Street Is 100% Bullish on This Recent IPOSavers Value Village NYSE: SVV reported second-quarter results marked by continued U.S. comparable-sales growth, higher profitability in both major markets and an updated full-year outlook that incorporates a phased rollout of its ThriftIQ pricing platform.

Chief Executive Officer Mark Walsh said the company recorded its third consecutive quarter of year-over-year adjusted EBITDA growth, while new-store profitability began to ramp faster than originally anticipated. Management said the combination of store maturation, productivity initiatives and ThriftIQ supports a path toward high-teens adjusted EBITDA margins within the next three years.

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Second-Quarter Sales and Earnings Total net sales rose 7.4% to $448 million in the quarter ended July 4, 2026. On a constant-currency basis, sales increased 7.1%, while comparable-store sales increased 4.4%.

U.S. net sales increased 11.6% to $255 million, with comparable-store sales up 6.6%. Walsh said the U.S. performance was driven by both higher transaction counts and average basket size, with growth across regions, categories and demographic groups. Management said younger and more affluent customers remained the company’s fastest-growing consumer cohorts, while growth was also strong among lower-income shoppers.

Canadian net sales increased 2.2% to $158 million, and comparable-store sales rose 0.8%, including an approximately 70-basis-point benefit from the timing shift of Easter. While management characterized Canadian macroeconomic conditions as stable but sluggish, Canada segment profit increased nearly 16% and segment profit margin expanded 330 basis points.

Chief Financial Officer Michael Maher attributed the Canadian profit improvement to tighter production management, off-site processing improvements and the continued maturation of new stores. He said the company is planning its Canadian business around roughly flat comparable-store sales in the near term.

Adjusted EBITDA increased 8% to $75 million, representing 16.6% of sales. GAAP net income was $22 million, or $0.14 per diluted share. Adjusted net income was also $22 million, or $0.14 per diluted share. U.S. segment profit increased by $10 million to $59 million. Canada segment profit increased by $6 million to $46 million. Cost of merchandise sold declined 170 basis points as a percentage of sales to 43.1%, which Maher said reflected comparable-sales leverage, efficiency initiatives and growth in on-site donations. The improvement was partly offset by the impact of new-store openings.

SG&A expenses rose 15% to $102 million and included a $2 million impairment charge tied primarily to the consolidation of a Canadian warehouse processing facility, as well as $1 million of costs associated with the repricing of the company’s term loan.

ThriftIQ Rollout and Margin Goals The company announced ThriftIQ, a proprietary data-driven platform designed to improve precision and consistency in pricing men’s and women’s apparel. The system has been tested for nearly two years and has priced more than 25 million items across 45,000 brands, according to management.

ThriftIQ is now operational in 58 stores in the U.S. and Canada, including most locations opened during the past six months. Walsh said the platform uses data on brands, categories, price points and sell-through outcomes to recommend pricing while maintaining an average discount of 40% to 70% below traditional retail prices.

Maher said pilot stores using ThriftIQ have generated gross-profit-dollar growth approximately 100 basis points higher than non-pilot stores. He said customers in pilot locations have responded through higher unit sell-through, larger baskets and stronger sales yields, while average prices were the same as or lower than the rest of the store fleet.

President and Chief Operating Officer Jubran Tanious said the platform reduces the subjectivity of the previous grading process. Rather than requiring team members to assess each apparel item’s quality and condition to determine a price, ThriftIQ asks them to identify the brand and uses factors including seasonality and sell-through to establish pricing.

Management said ThriftIQ also has reduced training time for new graders by about half. More than half of the company’s 2025 class of new stores generated positive four-wall contribution during the second quarter, ahead of prior new-store classes.

Maher said Savers expects its innovation agenda, new-store maturation, comparable-sales leverage and other profit-improvement initiatives to support 50 to 100 basis points of annual adjusted EBITDA margin expansion beginning in 2027. The contribution from ThriftIQ is expected to build as deployment expands through 2027 and into early 2028, with full annualization anticipated in 2028 and beyond.

Store Growth, Capital Allocation and Outlook Savers opened four U.S. stores and two Canadian stores in the second quarter. Walsh said a recently opened Burlington, North Carolina, location delivered the highest opening-week sales in company history. The company expects to open approximately 25 stores in 2026, with more than 20 planned in the U.S. across 11 states. Its first Tennessee store is expected to open later this year.

Tanious said the company’s site-selection process, dedicated leadership support for new stores, rollout of ThriftIQ and local marketing efforts have contributed to improved store-opening performance. Management also said on-site donations and GreenDrop accounted for 84.9% of total pounds processed during the quarter, compared with 78.5% a year earlier.

The company ended the quarter with $92 million in cash and cash equivalents and a net leverage ratio of 2.4 times. It repurchased 1.2 million shares at a weighted average price of $8.10. Maher said capital allocation priorities remain funding new-store growth, reducing debt toward a net leverage ratio below two times by the end of next year and opportunistically repurchasing shares.

For fiscal 2026, Savers now expects net sales of $1.77 billion to $1.79 billion, comparable-store sales growth of 3% to 4%, adjusted EBITDA of $265 million to $275 million, and approximately 25 new-store openings. The company forecast net income of $67 million to $76 million, or $0.42 to $0.47 per diluted share.

For the third quarter, management expects total revenue growth to fall between first- and second-quarter levels, with comparable-sales growth moderating somewhat as the company laps stronger comparisons. Adjusted EBITDA is expected to be modestly below the second quarter, primarily due to the timing of new-store openings and related pre-opening expenses. Savers plans to open eight stores during the third quarter.

About Savers Value Village (NYSE:SVV)Savers Value Village, Inc NYSE: SVV is a publicly traded thrift retailer that operates a network of donation-based retail stores. Headquartered in Bellevue, Washington, the company specializes in selling second-hand apparel, footwear, household items, accessories and other pre-owned goods. Through its retail stores, SVV offers value-conscious shoppers the opportunity to purchase quality, gently used merchandise at affordable prices.

At the heart of the company's model is a partnership network with more than 500 nonprofit organizations across North America.

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Savers Value Village is launching a new platform leveraging artificial intelligence to help optimize product pricing, the company told CNBC exclusively, as the tricky-to-price thrift segment gains traction around the world.

The new platform, called ThriftIQ, uses AI to reduce the work needed to price items across the men's and women's apparel assortment and bring more consistency.

"We're getting clear sell-throughs, larger baskets, it's helping our new stores ramp more favorably, and obviously there is the profitability improvements," CEO Mark Walsh told CNBC.

The tool has already been deployed in 58 pilot stores, according to the company, pricing more than 25 million items. That number is expected to double by the end of the year, Walsh added.

Savers, which had 375 stores at the end of the second quarter, said it processes more than 1 billion pounds of reusable goods every year. ThriftIQ was developed in partnership with data science and technology consulting firm Kaizen Analytix using Savers' proprietary data sets, which the company has been developing for nearly two years.

"It's not dynamic pricing, and once those garments are priced and tagged, that tag doesn't change," Walsh said.

The company's goal with the new AI tool is to bring more predictable pricing for customers while also keeping average prices the same or lower, remaining between roughly 40% and 70% below traditional retail prices.

Savers said ThriftIQ marks the latest step in the company's broader strategy to modernize and enhance its business operations. It will deploy the platform across more of its U.S. and Canadian locations through early 2028.

Walsh said the tool is not meant to get rid of manual labor in stores, but rather make workers more productive.

"Savers is transforming thrift through innovation, and I couldn't be more excited about the trajectory of the business," he said.

The tool comes at a time when secondhand retail and thrift are seeing a surge, especially with the macroeconomic backdrop of higher inflation, lower consumer confidence and more price-conscious buyers.

"We are benefiting from some very powerful secular momentum in this space. Thrift has gone, and is continuing to go, mainstream in retail, and so we see that in the younger customers, in the more affluent customers, for example, that are adopting thrift," Chief Financial Officer Michael Maher told CNBC. "But I think in addition to that, we are bringing investment, technology, innovation and execution to that."

Savers also reported its second-quarter earnings on Thursday, seeing a 7.4% increase in total net sales, which came in at $448.2 million. Comparable store sales increased 4.4%.

Savers reported net income of $21.6 million, or 14 cents per share, for the quarter, versus $18.9 million, or 12 cents per share, in the prior-year period.

Maher also said the company saw its third consecutive quarter of year-over-year growth in earnings before interest, taxes, depreciation and amortization.

The company incorporated the impact of ThriftIQ into its updated 2026 guidance, saying that it expects to return to a "high-teens adjusted EBITDA margin within the next three years."

"This is just the latest chapter of transformative innovation," Maher told CNBC. "It is a core plank of our long-term strategic plan, and yes, we're constantly looking at innovation."