Pet Valu (PET) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue grew 7% year-over-year to $279.1 million, with same-store sales up 1.4% and adjusted EBITDA rising 4% to $59 million.

• Net income increased to $21.8 million, a 24.2% rise from Q1 2024, and adjusted net income per diluted share was $0.36.

• Seven new stores opened in Q1, bringing the total to 830, with 10 major store renovations, expansions, or relocations completed.

• Operational initiatives advanced, including value proposition enhancements, merchandising, and the final phase of supply chain transformation.

• Board declared a $0.12 per share dividend, payable June 16, 2025.

Financial highlights

• System-wide sales reached $366.1 million, up 3.8% year-over-year, with revenue of $279.1 million, outpacing system-wide sales growth for the sixth consecutive quarter.

• Gross profit was $92.1 million (up 5.4%), with a gross margin rate of 33.0%, down 50 bps year-over-year.

• Adjusted EBITDA was $59 million (up 4%), with a 21.0% margin, and adjusted net income per diluted share was $0.36.

• Free cash flow was $15.3 million, down from $23.1 million, mainly due to working capital timing, with a 38% conversion rate.

• Inventory stood at $133.7 million, up 3% from Q1 2024; cash balance was $36.9 million plus $175 million revolver capacity.

Outlook and guidance

• FY2025 revenue guidance is $1.17–1.20 billion, up 7–9% year-over-year, with same-store sales growth expected at 1–4%.

• Adjusted EBITDA projected at $254–260 million, up 3–5%; adjusted net income per diluted share expected at $1.60–1.66, up 2–6%.

• Approximately 40 new store openings planned for 2025, with net capital expenditures expected to be ~$35 million.

• Q2 adjusted EBITDA margin expected to be about 100 bps below Q1 due to timing of expenses, with improvement anticipated in the second half.

• Guidance incorporates $12 million pre-tax incremental depreciation and lease liability interest from new distribution centres.