Pet Valu (PET) Q1 2026 earnings summary

Executive summary

• Revenue grew 3.2% year-over-year to $287.9 million in Q1 2026, with system-wide sales up 2.5% and eight new stores opened, totaling 41 in the last 12 months.

• Adjusted EBITDA was $56 million (19.4% margin), while net income declined 7.9% to $20 million and adjusted net income per diluted share was $0.31.

• Market share gains were achieved despite rising inflation and a 40% increase in retail fuel costs, which pressured consumer confidence and spending.

• Strategic focus included expanding store footprint, enhancing digital and omnichannel capabilities, and optimizing supply chain and operations.

• Capital was returned to shareholders through share buybacks and dividends, supported by strong free cash flow and disciplined capital deployment.

Financial highlights

• System-wide sales reached $375.2 million, up 2.5% year-over-year, with 41 new stores opened in the last 12 months.

• Q1 revenue was $288 million, up 3.2% year-over-year; same-store sales were flat as basket growth offset fewer non-loyalty trips.

• Gross profit margin declined to 31.4% from 33.0% year-over-year, mainly due to higher discount sales penetration.

• Adjusted EBITDA was $56 million (19.4% margin); adjusted net income was $22 million, or $0.31 per diluted share.

• Free cash flow for Q1 was $13 million, with a trailing four-quarter conversion rate of 40%.

Outlook and guidance

• Fiscal 2026 revenue growth expected between 2% and 4% on a 52-week comparable basis, with about 40 new stores and flat to 2% same-store sales growth.

• Adjusted EBITDA margin guidance set at approximately 21%, with improvement expected sequentially through the year as cost controls and commercial plan adjustments take effect.

• Adjusted net income per diluted share anticipated to be similar to 2025, with 2/3 of margin improvement from SG&A leverage and 1/3 from commercial plan adjustments.

• Business reinvestment of about $35 million, including $20 million in capital expenditures and $15 million in transformation costs.

• Continued capital returns to shareholders via dividends and enhanced buyback activity.