A Member of Pat McKeough’s Inner Circle recently asked for his advice on Pet Valu Holdings Ltd., Canada’s leading specialty pet retailer operating a coast-to-coast network of premium pet food, supplies, and services.
Pat likes the enhanced prospects after its supply chain modernization. However, he notes that inflation post-pandemic has caused consumers to reduce their spending.
Pet Valu Holdings Ltd. (Symbol PET on Toronto; www.petvalu.ca) is a retailer of pet food and pet-related supplies.
Since opening its first store in 1976, the company has expanded to become Canada’s leading pet retailer. Incorporated in 2016, it went public in June 2021 with an initial public offering at $20 a share.
As of September 27, 2025, Pet Valu operated 849 corporate-owned and franchised locations across all 10 provinces in the country. The company’s stores average approximately 3,500 to 5,000 square feet (with new “culinary” format stores emphasizing 3,000+ square foot footprints).
The company operates its network under six banners: Pet Valu, Bosley’s by Pet Valu, Chico, Paulmac’s Pets, Total Pet, and Tisol.
Pet Valu carries more than 350 brands and 10,000 products, including a broad assortment of exclusive, holistic, and award-winning labels. Its products cater to dogs, cats, fish, birds, reptiles, and small animals.
Those brands include Acan, Orijen, Stella & Chewy’s, Hill’s Science Diet, Big Country Raw, Merrick, GO and Now! Fresh, and Kong.
Consumable products represented 80.0% of the company’s system-wide sales in 2024. This mostly included food and treats for dogs and cats, and health and wellness products.
Hardlines and pet specialty products represented 17.6% of system-wide sales. These mostly included dog and cat toys, collars and leashes, waste management solutions, pet cages and carriers, flea and tick products, pet apparel and related accessories.
In-store services represented the remaining 2.4% of sales. These mostly included self-serve dog washes and grooming salons.
Pet Value is rapidly expanding its store network. In 2022, the company opened 45 net new stores and acquired 66 franchised stores as part of the acquisition of Chico, Quebec’s largest franchisor of pet specialty stores. In 2023, it opened 39 net new stores, and in 2024, 41 stores.
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For all of 2025, Pet Valu planned to open about 40 new stores, both corporate and franchised. Plus, the company is improving existing stores by enlarging square footage, adding in-store services, and relocating or renovating stores.
Pet Valu’s revenue has increased steadily in recent years. Revenue climbed 46.8%, from $648.5 million in 2020 to $951.7 million in 2022. Revenue then rose 10.9% in 2023, to $1.06 billion. In 2024, revenue climbed again, rising 3.9% to $1.20 billion.
The company’s earnings before one-time items soared 105.6%, from $35.5 million, or $0.64 a share, in 2020 to $73.0 million, or $1.02 a share, in 2021, on higher revenue, lower costs and a strong Canadian dollar. In 2022, earnings jumped 57.0% to $114.6 million, or $1.59 a share, as the company benefitted from steady costs on higher revenue. Earnings then rose 1.7% in 2023 to $116.5 million, or $1.61 a share, as the company spent more on staff and advertising. In 2024, earnings fell 2.8% to $113.3 million, or $1.57 a share, on higher costs as the company changed its supply chain to fewer distribution centres.
Pet spending will determine Pet Value’s future prospects
In the three months ended September 27, 2025, Pet Valu’s revenue rose 4.9%, to $289.5 million from $276.0 million a year earlier. The higher revenue was mostly due to growth in retail sales, and franchise and other revenues.
Excluding one-time items, Pet Valu earned $27.6 million, or $0.40 a share, in the quarter. That was down 7.6% from $29.9 million, or $0.41 a share. Profits were hurt by higher compensation costs, a lower gain on sale of assets for re-franchised stores, and other increased expenses.
Pet Valu raised its quarterly dividend by 9.1% with the April 2025 payment, to $0.12 a share from $0.11. The stock yields 1.8%.
Pet Valu recently launched a national partnership with Uber Eats, making over 5,000 products available for same-day delivery from more than 600 stores. This expands their omnichannel reach to compete directly with rapid-delivery competitors.
The company has also fully transitioned to its new distribution center network (Brampton, Calgary, Surrey). While this incurred temporary duplicate costs in 2024/early 2025, the project is now closed. This sets the stage for improved logistical efficiency and reduced capital intensity heading into 2026.
The rate at which Pet Valu has expanded its revenue has slowed in the past couple of years. That’s largely because inflation has caused consumers to reduce their spending. Consumers may continue to spend cautiously in the near term due to uncertainty caused by tariffs and their impact on the economy.
The Canadian pet care industry keeps expanding—although Pet Valu’s focus on premium products could hurt results if consumer confidence should fall sharply. Still, as the largest pet retailer in the country, the company has the resources to keep adding new stores, especially with its strong presence in rural and suburban markets.
Recommendation in Pat’s Inner Circle: Pet Valu is okay to hold for conservative investors, and a buy only for the more aggressive.
