PET VALU (PET TSX) Growth and recession-proof.
Pet Valu is Canada’s leading retailer of pet supplies with 700 mostly franchised stores and some corporate-owned ones. It is three times larger than its nearest competitor. Industry growth has been driven by increased pet adoption rates, particularly during the pandemic when three million more pets were adopted in Canada and now have to be fed for the next 10-15 years. Additionally, spending per pet is higher because of the humanization of pets as we now treat our pets like a member of the family.
The pet supply business is also a recession-resilient business. Since Pet Valu’s initial public offering (IPO) in 2021, it has consistently beaten consensus, delivered double-digit organic growth and raised its guidance. It keeps rolling out new stores to gain more market share and recently acquired the largest pet supply retailer in Quebec. The company is trading at around 23X NTM P/E which is reasonable given its growth rate.