Pet Valu Reports Third Quarter 2025 Results

Pet Valu Holdings Ltd. (“Pet Valu” or the “Company”) (TSX: PET), the leading Canadian specialty retailer of pet food and pet-related supplies, today announced its financial results for the third quarter ended Sept. 27, 2025.

Third Quarter Highlights

• System-wide sales(1) were $373.9 million, an increase of 4 percent versus Q3 2024. Same-store sales growth was 2.3 percent .
• Revenue was $289.5 million, up 9 percent versus Q3 2024.
• Adjusted EBITDA(2) was $63.6 million, down 5 percent versus Q3 2024, representing 22.0 percent of revenue. Operating income was $41.9 million, up 3.9 percent versus Q3 2024.
• Net income was $24.9 million, up 4 percent versus Q3 2024.
• Adjusted Net Income(2) was $27.6 million or $0.40 per diluted share(3), compared to $29.9 million or $0.41 per diluted share, respectively, in Q3 2024.
• Opened 16 new stores and ended the quarter with 849 stores across the
• Free cash flow(2) was $24.7 million, compared to $30.8 million in Q3
• Officially opened the new Calgary distribution
• Subsequent to Q3 2025, the Board of Directors of the Company declared a dividend of $0.12 per common share.

2025 Outlook

• The Company expects revenue between $1.175 and $1.185 billion, Adjusted EBITDA between

$257 and $260 million, Adjusted Net Income per Diluted Share between $1.63 and $1.66 and Net Capital Expenditures(2) of approximately $45 million.

“We delivered another quarter of responsible growth in Q3, highlighted by further share gains, continued same-store transaction growth and leverage on our supply chain investments,” said Greg Ramier, Chief Executive Officer of Pet Valu. “I am incredibly thankful for our people, whose dedication to serving our customers creates a meaningful point of difference in today’s environment.

“Our stores and digital channel are well set as we head into the holiday season, supported by a robust commercial plan that will thrill pet parents, while providing everyday value they can count on,” continued Mr. Ramier. “With a great team, strong assets and a clear strategy, Pet Valu is well positioned to deliver memorable moments and trusted expertise to devoted pet lovers, while driving long-term growth and value for all our stakeholders.”

Financial Results for the Third Quarter Fiscal 2025

All comparative figures below are for the 13-week period ended Sept. 27, 2025, compared to the 13-week period ended Sept. 28, 2024.

Revenue was $289.5 million in Q3 2025, an increase of $13.4 million or 4.9 percent, compared to $276.0 millionin Q3 2024. The increase in revenue was mostly driven by growth in retail sales and franchise and other revenues.

Same-store sales growth (decline) was 2.3 percent in Q3 2025, primarily driven by a 2.0 percent increase in same-store average spend per transaction growth(1) and by a 0.3 percent increase in same-store transactiongrowth(1). This is compared to a 2.5 percent same-store sales decline in Q3 2024, which was primarily driven by a 4.1 percent same-store transaction decline partially offset by a 1.7 percent increase in same-store average spend per transaction growth.

Gross profit increased by $6.2 million or 6.9 percent, to $95.6 million in Q3 2025, compared to $89.4 million in Q3 2024. Gross profit margin was 33.0 percent in Q3 2025, compared to 32.4 percent in Q3 2024. Excluding costs related to the supply chain transformation of 0.5 percent in Q3 2025 and 1.1 percent in Q3 2024, the gross profit margin was 33.5 percent in Q3 2025 and Q3 2024, respectively. The consistent gross profit margin between periods was primarily driven by: (i) distribution efficiencies from the new distribution centres offset by (ii) higher occupancy costs.

Selling, general and administrative (“SG&A”) expenses were $53.6 million in Q3 2025, an increase of $4.6 million or 9.4 percent, compared to $49.0 million in Q3 2024. SG&A expenses represented 18.5 percent and 17.8 percent of total revenue for Q3 2025 and Q3 2024, respectively. The increase of $4.6 million in SG&A expenses was primarily due to: (i) higher compensation costs; (ii) a lower gain on sale of assets for re-franchised stores; (iii) increased SaaS fees; (iv) higher professional fees; and (v) higher depreciation and amortization from store growth.

Adjusted EBITDA decreased by $1.0 million or 1.5 percent, to $63.6 million in Q3 2025, compared to $64.6 million in Q3 2024. The decrease is explained by higher SG&A expenses after excluding share-based compensation and costs not indicative of business performance, driven by higher compensation costs, a lower gain on sale of assets for re-franchised stores and increased software as a service (“SaaS”) fees, partially offset by higher gross profit excluding costs related to the supply chain transformation. Adjusted EBITDA as a percentage of revenue(3) was 22.0 percent and 23.4 percent in Q3 2025 and Q3 2024, respectively.

Net interest expense was $7.9 million in Q3 2025, a decrease of $0.4 million or 5.3 percent, compared to $8.3 million in Q3 2024. The decrease was mainly driven by lower interest expense on the term facility primarily due to lower interest rates compared to Q3 2024.

Income taxes were $8.9 million in Q3 2025 compared to $9.0 million in Q3 2024. The slight decrease was primarily due to a reduction in non-deductible share-based compensation, which lowered the effective tax rate in the current quarter, partially offset by higher taxable earnings in Q3 2025. The effective income tax rate was 26.4 percent in Q3 2025 compared to 27.9 percent in Q3 2024. The Q3 2025 effective tax rate was lower than the blended statutory rate of 26.5 percent, primarily due to a downward revision in the estimated non-deductibleshare-based compensation for the full fiscal year, which resulted in a favourable adjustment to the tax expense. The Q3 2024 effective tax rate was higher than the statutory rate due to non-deductible expenses.

Net income increased by $1.7 million to $24.9 million in Q3 2025, compared to $23.2 million in Q3 2024. The increase in net income was primarily driven by higher operating income and lower net interest expense, partially offset by a loss on foreign exchange, as described above.

Adjusted Net Income decreased by $2.3 million to $27.6 million in Q3 2025, compared to $29.9 million in Q3 2024. Adjusted Net Income as a percentage of revenue(3) was 9.6 percent in Q3 2025 and 10.8 percent in Q3 2024, respectively. The decrease was primarily due to higher SG&A expenses after excluding share-based compensation and costs not indicative of business performance, driven by higher compensation costs, a lower gain on sale of assets for re-franchised stores and increased SaaS fees, partially offset by higher gross profit excluding costs related to the supply chain transformation and lower income taxes as described above.

Adjusted Net Income per Diluted Share decreased by $0.01 to $0.40 in Q3 2025, compared to $0.41 in Q32024. The 2.4 percent period over period decrease was primarily due to lower Adjusted Net Income, partially offset by a lower weighted average number of common shares outstanding as a result of share repurchases.

Cash at the end of the third quarter totaled $14.8 million.

Net Capital Expenditures amounted to $8.3 million in Q3 2025 compared to $13.9 million in Q3 2024, a decrease of $5.6 million primarily driven by higher tenant allowances primarily related to the new Calgary distribution centre, partially offset by lower proceeds on disposal of property and equipment from the sale of corporate-owned stores to franchisees.

Free Cash Flow amounted to $24.7 million in Q3 2025 compared to $30.8 million in Q3 2024, a decrease of $6.1 million primarily driven by: (i) a decrease in cash from operating activities due to an unfavourable net change in operating working capital; (ii) an increase in cash used for investing activities due to lower proceeds on the sale of corporate-owned stores to franchisees; and (iii) an increase in payments of principal and interest on lease liabilities due to store network expansion; partially offset by (iv) higher tenant allowances primarily related to the new Calgary distribution centre.

Inventory at the end of Q3 2025 was $141.2 million compared to $124.6 million at the end of Q4 2024, an increase of $16.6 million primarily to support the growth of our store network and wholesale penetration.

Dividends

On Nov. 3, 2025, the Board of Directors of the Company declared a dividend of $0.12 per common share payable on Dec. 15, 2025 to holders of common shares of record as at the close of business on Nov. 28, 2025.

Outlook

Fiscal 2025 will be a 53-week fiscal year for Pet Valu, compared to a 52-week fiscal year in Fiscal 2024.Factoring in YTD 2025 performance, together with market conditions and the impact of the 53rd week of operation in Fiscal 2025, the Company expects:

• Revenue between $1.175 and $1.185 billion, supported by approximately 40 new store openings, approximately 2 percent same-store sales growth and higher wholesale merchandise sales penetration;
• Adjusted EBITDA between $257 and $260 million, which incorporates continued priceinvestments and normalization of operating expenses;
• Adjusted Net Income per Diluted Share between $1.63 and $1.66, which incorporates approximately $12 million pre-tax or $0.12 per diluted share, of incremental depreciation and lease liability interest expense associated with the new distribution centres;
• Transformation costs of approximately $11 million pre-tax and share-based compensation of approximately $10 million pre-tax, both of which are excluded from Adjusted EBITDA and Adjusted Net Income per Diluted Share; and
• Net Capital Expenditures of approximately $45

The Company continues to monitor the evolving governmental foreign trade environment and believes it has the appropriate mechanisms in place to adapt, as necessary. The above Outlook is based on several assumptions, including but not limited to, governmental foreign trade policies currently in place as of this release.

(1) This is a supplementary financial measure. Refer to “Non-IFRS and Other Financial Measures” below and to the section entitled “How We Assess the Performance of Our Business” in the MD&A for the third quarter ended Sept. 27, 2025, incorporated by reference herein, for the definitions of supplementary financial measures. A copy of the MD&A for the third quarter ended Sept. 27, 2025 is available on SEDAR+ at www.sedarplus.ca.

(2) This is a non-IFRS financial measure. Non-IFRS financial measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies. Refer to “Non-IFRS and Other Financial Measures” and “Selected Consolidated Financial Information” below for a reconciliation of the non-IFRS measures (except for Net Capital Expenditures) used in this release to the most comparable IFRS measures. Also refer to the sections entitled “How We Assess the Performance of Our Business”, “Non-IFRS and Other Financial Measures” and “Selected Consolidated Financial Information and Industry Metrics” in the MD&A for the third quarter ended Sept. 27, 2025 for further details concerning EBITDA, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow and Net Capital Expenditures including definitions and reconciliations to the relevant reported IFRS measure.

(3) This is a non-IFRS ratio. Non-IFRS ratios are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS. They are therefore unlikely to be comparable to similar measurespresented by other companies. Refer to “Non-IFRS and Other Financial Measures” below and to the section entitled “How We Assess the Performance of Our Business” in the MD&A for the third quarter ended Sept. 27, 2025 for the definitions of non-IFRS ratios and each non-IFRS measure that is used as a component of such non-IFRS ratios.

Conference Call Details 

A conference call to discuss the Company’s third quarter results is scheduled for Nov. 4, 2025, at 8:30 a.m. ET. To access Pet Valu’s conference call, please dial 1-833-950-0062 (ID: 645314). A live webcast of the call will also be available through the Events & Presentations section of the Company’s website at https://investors.petvalu.com/.

For those unable to participate, a playback will be available shortly after the conclusion of the call by dialing 1-866-813-9403 (ID: 170496) and will be accessible until Nov. 11, 2025. The webcast will also be archived and available through the Events & Presentations section of the Company’s website at https://investors.petvalu.com/.

About Pet Valu

Pet Valu is Canada’s leading retailer of pet food and pet-related supplies with more than 800 corporate-owned or franchised locations across the country. For more than 45 years, Pet Valu has earned the trust and loyalty of pet parents by offering knowledgeable customer service, an extensive product offering and engaging in-store services. Through its local neighbourhood stores and digital platform, Pet Valu offers more than 10,000 competitively-priced products, including a broad assortment of exclusive, holistic and award-winning proprietary brands. The Company is headquartered in Markham, Ontario and has distribution centres in Brampton, Ontario, Surrey, British Columbia and Calgary, Alberta. Its shares trade on the Toronto Stock Exchange (TSX: PET). To learn more, please visit: www.petvalu.ca.