Pet Valu lifts Q3 sales on higher retail and franchise revenue

Pet Valu closed the third quarter (Q3) of fiscal year (FY) 2026 with revenue of CA$299.5 million ($209.7M/€185.7M), up 3.5% year over year (YoY).

The Canadian pet retailer attributed the increase to higher retail sales and franchise revenue. CEO Greg Ramier said average unit retail growth reached its strongest level in several years as industry deflation eased and the company began cycling the price investments introduced in late 2025 through its Lowered and Locked program.

Retail sales were CA$108.6 million ($76M/€67.4M), up 3.8% YoY, while franchise and other revenues grew 3.3% to CA$190.9 million ($133.6M/€118.4M).

System-wide sales increased 3.9% YoY to CA$388.6 million ($272M/€240.9M). Meanwhile, same-store sales grew 1.5%, primarily reflecting a 1.4% increase in average spend per transaction and a 0.1% rise in transactions.

“We met or exceeded our expectations across all key performance indicators, […] all while navigating sustained pressure on consumer demand from macroeconomic forces,” added the CEO.

Profitability

Pet Valu’s gross profit rose 1.7% to CA$97.2 million ($68M/€60.3M), representing 32.5% of net sales.

The gross profit margin declined 0.5 percentage points YoY to 32.5%. The decline was primarily due to price investments made in late 2025, higher fuel costs and higher occupancy costs, partially offset by distribution efficiencies from the new distribution centers.

Net income for the period stood at CA$26.3 million ($18.4M/€16.3M), up 5.8% YoY. Basic and diluted earnings per share were CA$0.39 ($0.27/€0.24), compared with CA$0.36 a year earlier. The increase was mainly driven by higher operating income, lower net interest expense and a foreign exchange gain, partially offset by higher income tax expense.

In the first 9 months of the year, Pet Valu’s revenue grew 3.4% YoY to CA$878 million ($614.6M/€544.4M), comprising CA$324 million ($226.8M/€200.9M) in retail sales and CA$554 million ($387.8M/€343.5M) in franchise and other revenues.

Network expansion

Pet Valu added seven stores during the quarter, bringing its year-to-date openings to 22 and its total network to 882 locations.

The expansion extended Pet Valu’s reach into the smaller Ontario communities of Marathon and Fort Frances, approximately 1,000 km and 1,700 km from Toronto, respectively. The retailer also opened its 15th store on the island of Newfoundland.

At the end of Q3, franchisees collectively operated 71% of Pet Valu’s locations across Canada.

“For the full year, we expect a total of 37 new stores as we adapt to real estate market conditions while not compromising on the quality of new sites we consider. In addition to new stores, we had another busy quarter in resale activity, with seven corporate stores sold to new and existing franchisees,” said Greg Ramier.

The CEO noted that the company continues to adapt to market conditions affecting the availability of greenfield sites and second-use retail space, which have been tighter in recent years. “Based on discussions that we’re having with landlords and developers, we do expect this market tightness to remain in place through next year,” he added.

Outlook

Pet Valu has narrowed its full-year revenue growth guidance to 2.5% to 3.5%, raising the lower end of its previous forecast from 2% while lowering the higher end from 4%.

The retailer has also lowered its same-store sales growth forecast to a range of flat to 1%, compared with its previous expectation of flat to 2%.

Meanwhile, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin is now expected to reach 21.5%, up from the previous forecast of 21%.

Adjusted net income per share is expected to grow by a low-single-digit percentage, similar to the growth recorded in FY2025.