Company: SVV
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001883313-25-000101
Chunk: 41

Company: Savers Value Village, Inc.
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 1
Chunk 41
---
 suspended, modified or discontinued at any time without prior notice. Any repurchases will be funded by available cash and cash equivalents.

Note 10. Income Taxes

The income tax provision for interim periods is generally determined using an estimate of the Company’s annual effective tax rate adjusted for discrete items. Each quarter the estimate of the annual effective tax rate is updated, and if the Company’s estimated tax rate changes, a cumulative adjustment is made.The effective tax rate for the thirteen and thirty-nine weeks ended September 27, 2025 was 19.2% and 94.7%, respectively. The effective tax rate for these periods was primarily driven by a decrease in income before income taxes, the disproportionate impact of permanent differences including limitations on the deductibility of executive compensation under Internal Revenue Code Section 162(m), a tax shortfall related to stock-based compensation and the recording of a valuation allowance against certain non-domestic deferred tax assets. The effective tax rate for the thirteen and thirty-nine weeks ended September 28, 2024 was 38.8% and 33.5%, respectively. The effective tax rate differed from the federal statutory rate primarily due to Internal Revenue Code Section 162(m) excess compensation.The Organization for Economic Cooperation and Development (“OECD”) proposed model rules to ensure a minimal level of taxation (commonly referred to as Pillar II) and the European Union member states have agreed to implement Pillar II’s proposed global corporate minimum tax rate of 15%. We considered the applicable tax law changes from Pillar II implementation in the relevant countries in which we operate, and there is no material impact to our tax provision for the thirteen and thirty-nine weeks ended September 27, 2025. We will continue to evaluate the impact of these tax law changes in future reporting periods.The One Big Beautiful Bill Act (“OB3”) was enacted on July 4, 2025, which includes wide-ranging tax reforms for businesses. OB3 extends and modifies certain provisions of the Tax Cuts & Jobs Act ("TCJA") and makes certain key elements permanent, including 100% bonus depreciation, immediate expensing of domestic research costs and the deductibility of business interest expense. GAAP requires the effect of a change in tax law to be recognized in the interim period that includes the enactment date. Accordingly, the Company’s unaudited interim condensed consolidated financial statements for the thirteen and thirty-nine weeks ended September 27, 2025 reflect adjustments related to OB3 based on the Company's best estimate using currently available information. The primary effect