Pet Valu sees steady growth in 2023

The company recorded revenue of C$1 billion ($740M/€680M), 10.9% more than in 2022. It attributed the rise to growth in retail sales, franchises and other revenues. 

System-wide sales hit C$1.4 billion ($1B/€950M), an increase of 10% compared to the prior year, while same-store sales growth stood at 5.2%. 

However, the company’s net income declined, standing at C$89.5 million ($65.9M/€60.6M), down from C$100.8 million ($74.2M/€68.2M) in the previous year. 

The pet retailer’s gross profit for the fiscal year increased by C$12.8 million ($9.4M, €8.6M)—3.6% more than the previous year. However, its gross profit margin declined by 1.3%, mainly due to a weaker Canadian dollar, duty and vendor recoveries, higher promotional discounts and higher wholesale merchandise sales. 

This, however, was partially offset by favorable product margins, including lower inbound freight costs. 

The retailer opened 39 new stores in 2023, increasing its store count to 783. 

A similar run in the fourth quarter

For Q4 2023, Pet Valu’s revenue was C$286.9 million ($211.2M/€194.3M), an increase of 7.8% compared to Q4 2022. Its gross profit increased by C$2.2 million ($1.6M/€1.5M) or 2.3% compared to the same period in 2022 with a 0.3% increase in gross profit margin, owing to favorable product margins and higher franchise fees. 

However, this was also partially offset by vendor recoveries, higher discounts due to promotions and the impact of a weaker Canadian dollar. 

System-wide sales were C$379 million ($279M/€256.6M) in the last quarter of 2023, an increase of 5.1% versus the prior year, while same-store sales growth was 1.9%. 

Looking ahead

The company expects to earn revenue between C$1.11 billion ($820M, €750M) and C$1.14 billion ($840M, €770M) in 2024, a 5% to 8% increase compared to last year.

Pet Valu also hopes to open at least 40 to 50 new stores across the country and expects higher sales for its wholesale merchandise through its Chico franchisees. 

President and CEO Richard Maltsbarger told investors that the company plans to upgrade its digital platform and complete “the majority” of its supply chain transformation, which he hopes will “drive an inflection in our free cash flow growth as we approach 2025.”