Mark Walsh: That’s a great question Michael. So, let me start with we are testing. We’re being very, very prescriptive about what we’re doing in Canada. We are not doing a countrywide promotional activity approach. We’re taking very specific markets and testing different things within those markets to see about the opportunity of growth from a transactional perspective and from a revenue perspective. And then what if any impact that has on margin. So we’re being I wouldn’t say cautious because we’re acting quickly but we’re still testing into an approach that would make sense economically for us within that country.
Michael Lasser: Understood. And historically the thrift model has seen or it was perceived to see a trade down benefit during more challenging economic times Mark, why do you think you’re not seeing that in Canada? And could you be seeing some impact of that right now in the U.S. that are providing support to your comps here? Thank you very much.
Mark Walsh: Well I’ll start with the U.S. piece first, Michael. I think what we’re excited about as we see increases in all of our demographics. We tend to be skewing now at the higher two cohorts. So there is, you could describe it as trade down. We think it’s more secular though. We think it’s more about people being a little more thoughtful about how they’re approaching their purchases and the thrift experience is fun and it’s engaging. So I think in the US it’s a bit hard to say it’s a trade down. I think we like to think of it more as a secular trend around thrifting and the thrift experience. In Canada, again, we’re 95%, we have 95% brand awareness. We’re one of three households, that’s our own estimate based on the demographic information we have.
Our overall shopper satisfaction scores are 85%. We’re really — where we’re getting hit or where we’re having troubles from a comp perspective is around the non-member. And the non-member tends to be younger and tends to be of lower income. So I think they’re just making trade-offs. These are discretionary dollars and it’s difficult for those individuals in that window. I do think we’re gaining share relative to the marketplace based on what we read and what we see from other folks who are selling textiles and household items. So we feel good about our competitive positioning. I think when you look at our two-year stack in Canada in the first quarter at 6.4%, that says a lot about where we are. And yes, we had a difficult first quarter in 2024, but that comes off of a very difficult compare in Canada in the first quarter last year of 9%.
Michael Lasser: Thank you very much, and good luck.
Operator: Your next question comes from the line of Mark Altschwager from Baird. Your line is open.
Mark Altschwager: Good afternoon. Thank you for taking my questions. On Canada, it sounds like it’s mostly a traffic issue and concentrated with the non-loyalty members. Has there been any material change in conversion basket in Canada? I’m trying to get at the quality of supply or mixes of goods and how much that might be contributing?
Mark Walsh: We’ve seen it’s pretty linear in terms of comp and transaction. So there has not been a big change in basket so to speak because it’s basically the comp has followed the transaction flow.
Jubran Tanious: And Mark on supply, we have not detected any change in the overall quality of supply. In fact, Canada has enjoyed pretty healthy forward momentum, particularly in the first half of Q1 on onsite donation growth, which we know generally brings a nice sales yield with it. So, but no discernible change in quality to your question.
Mark Altschwager: Thank you. And in addition to the marketing you’re planning, I think you mentioned the prepared remarks. You have the opportunity to lean into some specific categories. Maybe just to unpack that a bit more and remind us, how do you go about concentrating your production in certain categories, given that most of the donations are more raw unsorted goods?
Jubran Tanious: Yeah. When it comes to, remember we have, oh gosh, give or take 200 categories in our stores. And some of those sell very well, very predictably. Men’s jeans is a great example of that. Some have lower sell through. And in the context of what Mark described in the macro situation in Canada, some of those lower sell-through categories, well, now sell-through even lower, women’s Capri’s, women’s long-sleeved knits as an example. So what our store teams will do is when we want to cut back on the put out of certain categories, it’s just a function of, you know, what team for the — we’re going to put out everything that we normally would in the first half of the day. And once we get after the lunch break we’re not putting out long-sleeved knits anymore, it’s really no more complicated than that.
What’s important there Mark is that we diagnose that properly on a per-store basis, because again there are some stores that are doing just fine selling women’s long-sleeved knits. So those are the last stores that we would want to touch in terms of pulling it back and then removing the labor associated with it. So the key is surgical, granular with something that the team can actually execute like the example that I just gave.
Mark Altschwager: Thank you.
Jubran Tanious: Thanks Mark.
Operator: Your next question comes from the line of Bob Drbul from Guggenheim. Your line is open.
Bob Drbul: Hi, good afternoon. I guess, I was just wondering if you could spend some more time just on the on-site donations. Are the numbers up there pretty good these days, and where you see that trending? And then just curious if you can give us an update around the GreenDrop and just the plans there and how that’s going? And then I was also just curious would the GreenDrop initiative be something you could also use in Georgia with the 2 Peaches acquisitions? Thanks.
Mark Walsh: Yeah. Hey, Bob. On-site donations, I think the Canadian team — I think all three countries frankly, I think the team has never operated at a better level in terms of what we know drives on-site donations. We’ve talked about this before, convenience is king. And then after that, the number two reason, the number one reason, a new donor comes to one of our donation centers is they drove by and saw sign, just final visibility. Well, the team does a lot of work on donation center refreshes so on and so forth. The number two reason is advocacy that a friend, family member, coworker told them how convenient, fast, friendly and the donation experience was, because I would tell you across the landscape that is not the norm that is something that we work hard at, and our teams actually have donor satisfaction scores at the ready where they can see how are the donors that are coming to our donation centers experiencing us in terms of assistance, speed, convenience, friendliness.
