Pet Valu (PET) Q4 2024 earnings summary

Executive summary

• Revenue grew 4% year-over-year to CAD 1.1 billion in 2024, with net income of CAD 87.4 million and adjusted EBITDA up 6.9% to CAD 247 million; Q4 revenue reached CAD 295 million, up 3%, with net income at CAD 28.9 million and adjusted EBITDA at CAD 68 million, down 4% from Q4 2023.

• Achieved record store expansion with 41 new sites in 2024, ending the year with 824 locations and over 600 franchise stores; 19 new stores opened in Q4, with 14 renovations, expansions, or relocations.

• Advanced strategic initiatives: completed major supply chain transformation milestones, launched new proprietary products, and enhanced digital and omnichannel capabilities.

• Maintained strong customer loyalty, with 85% of system-wide sales from over 3 million active loyalty members and record engagement in proprietary brand and loyalty programs.

• Delivered on revenue, adjusted EBITDA, and adjusted EPS expectations, with prudent working capital management accelerating free cash flow.

Financial highlights

• Full-year revenue rose 4% to CAD 1.1 billion; adjusted EBITDA up 7% to CAD 247 million; adjusted net income per diluted share declined $0.04 to $1.57, absorbing $0.20 in new DC fixed costs.

• Q4 system-wide sales increased 2.3% to CAD 388 million; Q4 revenue up 3% to CAD 295 million; gross profit margin was 34%, down 30 bps year-over-year.

• Adjusted net income per diluted share was $0.45 in Q4, down 16.7% year-over-year.

• Free cash flow for 2024 was CAD 103 million, exceeding the CAD 100 million milestone, with a 42% conversion rate relative to adjusted EBITDA.

• Inventory increased 2% to CAD 125 million; cash at year-end was CAD 35 million.

Outlook and guidance

• 2025 revenue expected between CAD 1.17–1.2 billion (7–9% growth), with 40 new store openings and same-store sales growth of 1–4%.

• Adjusted EBITDA guidance: CAD 254–260 million; adjusted net income per diluted share: CAD 1.60–1.66, absorbing CAD 12 million in incremental DC-related expenses.

• Net capital expenditures to decrease to CAD 35 million as supply chain transformation concludes; free cash flow conversion target above 40% of adjusted EBITDA.

• Board approved a 9% dividend increase to CAD 0.12 per share for Q1 2025; continued focus on share repurchases.

• 2025 will be a 53-week year, with incremental depreciation and lease interest from new distribution centers.