Pet Valu Holdings Ltd. announced its financial results for the fourth quarter and fiscal year ended January 3, 2026.

Pet Valu Holdings Ltd. ("Pet Valu" or the "Company") (TSX: PET), the leading Canadian specialty retailer of pet food and pet-related supplies, today announced its financial results for the fourth quarter and fiscal year ended January 3, 2026.

Fourth Quarter Highlights

System-wide sales(2) were $423.7 million, an increase of 9.2% versus Q4 2024. Same-store sales growth(2) was 0.3%.

Revenue was $326.4 million, up 10.6% versus Q4 2024.

Adjusted EBITDA was $74.6 million, up 9.4% versus Q4 2024, representing 22.9% of revenue. Operating income was $48.1 million, up 0.5% versus Q4 2024.

Adjusted Net Income(1) was $34.0 million or $0.49 per diluted share(3), compared to $32.2 million or $0.45 per diluted share, respectively, in Q4 2024. Net income was $29.4 million, up 1.6% versus Q4 2024.

Opened 14 new stores and ended the quarter with 863 stores across the network.

Free cash flow(1) was $37.0 million, compared to $41.0 million in Q4 2024.

Subsequent to Q4 2025, the Board of Directors of the Company declared a dividend of $0.13 per common share.

 

Fiscal Year Highlights

System-wide sales were $1,533.5 million, an increase of 5.6% versus the prior year. Same-store sales growth was 1.6%.

Revenue was $1,175.6 million, up 7.1% versus the prior year.

Adjusted EBITDA was $257.1 million, up 4.1% versus the prior year, representing 21.9% of revenue. Operating income was $164.2 million, up 5.7% versus the prior year.

Adjusted Net Income was $113.2 million or $1.61 per diluted share, compared to $113.3 million or $1.57 per diluted share, respectively, in the prior year. Net income was $97.8 million, up 11.9% versus the prior year.

 

2026 Outlook

On a 52-week comparable basis, the Company expects revenue growth between 2% and 4%, flat to slight expansion in Adjusted EBITDA margin(3), and Adjusted Net Income per Diluted Share growth in the mid to high single-digits.

 

"We closed out 2025 with solid operational execution in Q4 amid heightened value-seeking and competitive activity," said Greg Ramier, Chief Executive Officer of Pet Valu. "Through our decisive actions in 2025, we continued to gain market share, drove growth led by our proprietary brands, and increased units per transaction, all while supporting our franchisees' success.

"As we celebrate our 50th anniversary in 2026, we plan to strengthen our legacy and leadership in the Canadian pet industry through a continued focus on convenience, quality, value and expertise, while delivering benefits from recent investments," continued Mr. Ramier. "Together, we expect these actions to support solid revenue and profit growth, enabling compelling returns to shareholders in the near and long term."

Financial Results for the Fourth Quarter Fiscal 2025

All comparative figures below are for the quarter ended January 3, 2026, compared to the quarter ended December 28, 2024.

Revenue was $326.4 million in Q4 2025 compared to $295.1 million in Q4 2024, an increase of $31.2 million, or 10.6%. Excluding the impact of the additional week in Q4 2025 of $20.9 million, revenue was $305.5 million in Q4 2025 compared to $295.1 million in Q4 2024, an increase of $10.3 million or 3.5%. The increase was primarily due to higher retail sales and increased franchise and other revenues.

Same-store sales growth was 0.3% in Q4 2025, primarily due to a 0.5% increase in same-store average spend per transaction growth(2) partially offset by a 0.2% same-store transaction decline(2). This is compared to a 0.2% same-store sales decline in Q4 2024, which was primarily driven by a 2.1% same-store transaction decline partially offset by a 2.0% increase in same-store average spend per transaction growth.

Gross profit was $107.6 million in Q4 2025 compared to $100.2 million in Q4 2024, an increase of $7.4 million, or 7.3%. Gross profit margin was 33.0% in Q4 2025 compared to 34.0% in Q4 2024, a decrease of 1.0%. Excluding costs related to the supply chain transformation, gross profit margin was 33.1% in Q4 2025 compared to 34.0% in Q4 2024, a decrease of 0.9%. The decrease was primarily due to (i) investments in pricing and promotions; partially offset by (ii) distribution efficiencies from the new distribution centres.

Selling, general and administrative ("SG&A") expenses were $59.5 million in Q4 2025 compared to $52.3 million in Q4 2024, an increase of $7.1 million, or 13.6%. The increase was primarily due to (i) higher compensation costs, including restructuring activities in certain business support functions and the impact of the additional week in Q4 2025; (ii) higher depreciation and amortization and other store expenses driven by corporate store network growth, and the impact of the additional week in Q4 2025; and (iii) higher technology expenditures related to cloud services; partially offset by (iv) lower professional fees. SG&A expenses, as a percentage of revenue, for Q4 2025 and Q4 2024, were 18.2% and 17.7%, respectively.

Interest expense, net was $8.0 million in Q4 2025 compared to $6.6 million in Q4 2024, an increase of $1.5 million, or 22.4%. The increase was primarily due to (i) higher interest expense on lease liabilities resulting from store network expansion and renewal of existing leases; (ii) the comparative period gain recognized on the modification of long-term debt; and (iii) the impact of the additional week in Q4 2025; partially offset by (iv) lower interest expense on the term facility primarily due to a decline in interest rates compared to Q4 2024.

Income tax expense was $10.7 million in Q4 2025 compared to $11.2 million in Q4 2024, a decrease of $0.5 million or 4.4%. The decrease was primarily due to (i) a decrease in the effective tax rate from 27.8% in Q4 2024 to 26.6% in Q4 2025; (ii) favourable tax adjustments to prior periods that were recognized in Q4 2025; and (iii) slightly lower taxable earnings in Q4 2025. The Q4 2025 effective tax rate was higher than the blended statutory tax rate of 26.5%, primarily due to non-deductible expenses, partially offset by favourable tax adjustments recorded in Q4 2025. The Q4 2024 effective tax rate was higher than the statutory tax rate primarily because of non-deductible expenses.

Net income was $29.4 million in Q4 2025 compared to $28.9 million in Q4 2024, an increase of $0.5 million, or 1.6%. The increase was primarily due to higher operating income and lower foreign exchange loss, partially offset by an increase in interest expense, net as described above.

Adjusted EBITDA was $74.6 million in Q4 2025 compared to $68.2 million in Q4 2024, an increase of $6.4 million, or 9.4%. The increase was primarily due to higher gross profit, excluding costs related to the supply chain transformation; partially offset by higher SG&A expenses, excluding share-based compensation and costs not indicative of business performance, driven by higher technology expenditures, higher compensation costs, and higher other store expenses. Adjusted EBITDA as a percentage of revenue(3) was 22.9% and 23.1% in Q4 2025 and Q4 2024, respectively.

Adjusted Net Income was $34.0 million in Q4 2025, compared to $32.2 million in Q4 2024, an increase of $1.8 million or 5.5%. The increase was primarily due to higher gross profit, excluding costs related to the supply chain transformation, partially offset by higher SG&A expenses, excluding share-based compensation and costs not indicative of business performance, driven by higher technology expenditures, higher compensation costs, and higher depreciation and amortization and other store expenses. Results were also affected by higher income taxes (adjusted for items not indicative of business performance) and higher interest expense, net as described above. Adjusted Net Income as a percentage of revenue(3) was 10.4% in Q4 2025 and 10.9% in Q4 2024, respectively.

Adjusted Net Income per Diluted Share was $0.49 in Q4 2025, compared to $0.45 in Q4 2024, an increase of $0.04 per common share or 8.9%. The increase was primarily due to higher Adjusted Net Income and a lower diluted weighted average number of common shares outstanding as a result of the common share repurchases.

Cash at the end of the fourth quarter totaled $35.7 million.

Net Capital Expenditures(1) were $8.2 million in Q4 2025 compared to $14.8 million in Q4 2024, a decrease of $6.6 million. The decrease was primarily due to higher proceeds on disposal of property and equipment from the sale of corporate-owned stores to franchisees, and lower expenditures on property and equipment due to a decline in construction costs related to the new distribution centres.

Free Cash Flow was $37.0 million in Q4 2025 compared to $41.0 million in Q4 2024, a decrease of $4.1 million. The decrease was primarily due to an increase in payments of principal and interest on lease liabilities due to the additional week in Q4 2025, partially offset by higher proceeds on disposal of property and equipment from the sale of corporate-owned stores to franchisees.

Inventory at the end of Q4 2025 was $131.1 million compared to $124.6 million at the end of Q4 2024, an increase of $6.5 million primarily to support the growth of the store network and wholesale penetration.

Financial Results for Fiscal 2025

All comparative figures below are for the year ended January 3, 2026, compared to the year ended December 28, 2024.

Revenue was $1,175.6 million in Fiscal 2025 compared to $1,097.2 million in Fiscal 2024, an increase of $78.4 million, or 7.1%. Excluding the impact of the additional week in Fiscal 2025 of $20.9 million, revenue was $1,154.7 million in Fiscal 2025 compared to $1,097.2 million in Fiscal 2024, an increase of $57.5 million, or 5.2%. The increase was primarily due to higher retail sales and franchise and other revenues.

Same-store sales growth was 1.6% in Fiscal 2025 primarily due to a 1.7% increase in same-store average spend per transaction growth partially offset by a 0.1% same-store transaction decline. This is compared to same-store sales decline of 0.5% in Fiscal 2024, which was primarily driven by a 2.7% same-store transaction decline partially offset by a 2.3% increase in same-store average spend per transaction growth.

Gross profit was $388.8 million in Fiscal 2025 compared to $364.6 million in Fiscal 2024, an increase of $24.2 million, or 6.6%. Gross profit margin was 33.1% in Fiscal 2025 compared to 33.2% in Fiscal 2024, a decrease of 0.1%. Excluding the costs related to the supply chain transformation, gross profit margin was 33.3% in Fiscal 2025 compared to 34.0% in Fiscal 2024, a decrease of 0.7%. The decrease was primarily due to (i) higher wholesale merchandise sales; and (ii) higher occupancy costs.

SG&A expenses were $224.7 million in Fiscal 2025 compared to $209.3 million in Fiscal 2024, an increase of $15.4 million, or 7.3%. The increase was primarily due to (i) higher compensation costs, including restructuring activities in certain business support functions, higher variable compensation costs, and the impact of the additional week in Fiscal 2025; (ii) higher depreciation and amortization and other store expenses driven by corporate store network growth and the impact of the additional week in Fiscal 2025; and (iii) higher marketing and advertising expenses; partially offset by (iv) lower technology expenditures related to our investment in our e-commerce platform. SG&A expenses, as a percentage of revenue was, 19.1% for both Fiscal 2025 and Fiscal 2024.

Interest expense, net was $30.5 million in Fiscal 2025 compared to $32.1 million in Fiscal 2024, a decrease of $1.6 million, or 5.1%. The decrease was primarily due to (i) lower interest expense on the term facility primarily due to a decline in interest rates compared to Fiscal 2024; partially offset by (ii) higher interest expense on lease liabilities resulting from store network expansion and renewal of existing leases, and the additional week in Fiscal 2025; (iii) lower interest income due to lower interest earned on cash balances; and (iv) the comparative period gain recognized on the modification of long-term debt.

Income tax expense was $36.0 million in Fiscal 2025 compared to $34.0 million in Fiscal 2024, an increase of $2.0 million or 5.9%. The increase was primarily due to higher taxable earnings in Fiscal 2025. The effective income tax rate was 26.9% in Fiscal 2025 compared to 28.0% in Fiscal 2024. The Fiscal 2025 and Fiscal 2024 effective tax rates were higher than the blended statutory tax rate of 26.5% primarily because of non-deductible expenses.

Net income was $97.8 million in Fiscal 2025 compared to $87.4 million in Fiscal 2024, an increase of $10.4 million or 11.9%. The increase was primarily due to higher operating income, lower interest expense, net and gain on foreign exchange, partially offset by higher income tax expense, as described above.

Adjusted EBITDA was $257.1 million in Fiscal 2025, compared to $247.1 million in Fiscal 2024, an increase of $10.0 million, or 4.1%. The increase was primarily due to higher gross profit, excluding costs related to the supply chain transformation, partially offset by higher SG&A expenses, excluding share-based compensation and costs not indicative of business performance, driven by higher compensation costs, higher technology expenditures, and higher other store expenses. Adjusted EBITDA as a percentage of revenue was 21.9% and 22.5% in Fiscal 2025 and Fiscal 2024, respectively.

Adjusted Net Income was $113.2 million in Fiscal 2025 compared to $113.3 million in Fiscal 2024, a decrease of $0.2 million, or 0.1%. The decrease was primarily due to higher SG&A expenses, excluding share-based compensation and costs not indicative of business performance, driven by higher compensation costs, higher technology expenditures, higher depreciation and amortization and other store expenses. This was partially offset by higher gross profit, excluding costs related to the supply chain transformation, and lower interest expense, net as described above. Adjusted Net Income as a percentage of revenue was 9.6% in Fiscal 2025 and 10.3% in Fiscal 2024, respectively.

Adjusted Net Income per Diluted Share was $1.61 in Fiscal 2025, compared to $1.57 in Fiscal 2024, an increase of $0.04 per common share or 2.5%. The increase was primarily driven by lower diluted weighted average number of common shares outstanding as a result of the common share repurchases, partially offset by the impact of lower Adjusted Net Income.

Net Capital Expenditures were $38.6 million in Fiscal 2025 compared to $52.3 million in Fiscal 2024, a decrease of $13.7 million. The decrease was primarily due to higher tenant allowances received, including for the new Calgary distribution centre, higher proceeds on disposal of property and equipment from the sale of corporate-owned stores to franchisees, and lower expenditures on property and equipment due to a decline in construction costs related to the new distribution centres.

Free Cash Flow was $104.1 million in Fiscal 2025 compared to $102.6 million in Fiscal 2024, an increase of $1.5 million. The increase was primarily due to (i) higher tenant allowances received, including for the new Calgary distribution centre; (ii) lower expenditures on property and equipment and higher principal payments collected on lease receivables; and (iii) an increase in cash from operating activities; partially offset by (iv) an increase in principal and interest payments on lease liabilities due to store network expansion and the additional week in Fiscal 2025.

Dividends

On March 2, 2026, the Board of Directors of the Company declared a dividend of $0.13 per common share payable on April 15, 2026 to holders of common shares of record as at the close of business on March 31, 2026.

Outlook

Fiscal 2026 will be a 52-week fiscal year, compared to a 53-week fiscal year in Fiscal 2025. In Fiscal 2026, on a 52-week comparable basis, the Company expects:

revenue growth between 2% and 4%, supported by approximately 40 new store openings, flat to 2% same-store sales growth and higher wholesale merchandise sales penetration;

flat to slight expansion of Adjusted EBITDA margin, supported by operating expense leverage while maintaining competitiveness;

Adjusted Net Income per Diluted Share growth in the mid to high single-digits; and

business reinvestment of approximately $35 million, consisting of approximately $20 million in Net Capital Expenditures and approximately $15 million in transformation costs.

The Company estimates the 53rd week contributed approximately 2% of reported revenue, Adjusted EBITDA and Adjusted Net Income in Fiscal 2025. This estimate was derived using (i) actual revenue recorded and employee benefits expense incurred in the 53rd week, and (ii) gross profit margin and prorated expenses, other than employee benefits, from the final fiscal period of 2025.

The Company continues to monitor the evolving governmental foreign trade environment and believes it has the appropriate mechanisms in place to adapt, as necessary. The Outlook for 2026 is based on several assumptions, including, but not limited to, governmental foreign trade policies currently in place as of this release.

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