Pet Valu benefits from loyalty as sales grow despite fewer trips in Q2

Canadian retailer Pet Valu concluded the second quarter of fiscal year (FY) 2026, which ended on 4 July 2026, with CA$290.7 million ($203.5M/€180.2M) in revenue, up 3.6% year-over-year (YoY). This was supported by stronger retail sales and franchise and other revenues.

System-wide sales, which include franchisees’ results, totaled CA$377.3 million ($264.1M/€233.9M), marking 2% YoY growth, while same-store sales slipped 0.2%. 

The increase in system-wide sales was supported by contributions from 45 new stores opened over the last 12 months. 

Meanwhile, the decline in same-store sales was primarily driven by a 1.4% reduction in transactions, partly offset by a 1.2% rise in average spend per transaction.

Profitability

Gross profit rose 1% to CA$94.6 million ($66.2M/€58.7M), while gross profit margin stood at 32.5%. Excluding costs related to the supply chain transformation, the margin in Q2 2025 was 33.6%, representing a 1.1-percentage-point contraction.

The Canadian pet retailer attributed the change primarily to price investments made in late 2025 and higher occupancy costs, partly offset by distribution efficiencies from the new distribution centers. 

The Supply chain transformation was a 4-year program that concluded in September 2025, culminating in the official opening of a 295,000 sq ft distribution center in Calgary.

Net income reached CA$24.9 million ($17.4M/€15.4M), rising 14.3% YoY primarily due to higher operating income. This was partly offset by a foreign exchange loss, higher income tax expense and higher net interest expense. Operating income was CA$41.9 million ($29.3M/€26M), up 14% YoY.

Store expansions

Pet Valu added 7 new stores during the quarter, bringing its year-to-date openings to 15 and its total store count to 877. Of those, 71% are franchised. The company also completed 7 renovations, expansions and relocations.

According to CEO Greg Ramier, the company is expanding into resilient, growing markets such as Alberta and rural towns that have historically been underserved by the pet specialty industry. “The growing scale of our store network is paying dividends within our digital channel, where demand for online delivery platforms and Click & Collect help drive record growth.”

Ramier added that the company’s AutoShip subscription service continues to grow “both in absolute dollars and as a proportion of digital.”

Loyalty drives performance

Ramier notes that Pet Valu’s loyalty program captured 90% of sales during the quarter. The retailer is also seeing a higher proportion of trips from loyalty customers, particularly monthly shoppers.

At the same time, it registered fewer trips from customers outside the program, who typically purchase more promotional items and have smaller basket sizes. 

“We’re also continuing to see some trip consolidation in light of higher fuel costs,” the CEO comments.

H1 performance

During the first half of 2026, Pet Valu generated CA$578.6 million ($405M/€358.7M) in revenue, a 3.3% YoY increase.

Gross profit came to CA$185 million ($129.5M/€114.7M), broadly in line with the CA$185.6 million ($129.9M/€115.1M) recorded in the same period last year.

Net income amounted to CA$44.9 million ($31.4M/€27.8M), 3.2% higher YoY. Basic and diluted earnings per share (EPS) were CA$0.66 ($0.46/€0.41).

Yearly guidance

Pet Valu expects revenue growth of 2% to 4% for FY2026, supported by approximately 40 new store openings, flat to 2% same-store sales growth and higher wholesale merchandise sales penetration.

Adjusted net income per diluted share is expected to remain similar to FY2025. Business reinvestment is forecast at approximately CA$35 million ($24.5M/€21.7M), comprising approximately CA$20 million ($14M/€12.4M) in net capital expenditures and CA$15 million ($10.5M/€9.3M) in transformation costs.

In addition, the company estimates that the 53rd week contributed approximately 2% of reported revenue, adjusted EBITDA and adjusted net income in FY2025.