Pet Valu Holdings Ltd T.PET

Alternate Symbol(s): PTVLF

Pet Valu Holdings Ltd. is a Canadian specialty retailer of pet food and pet-related supplies. The Company has over 800 corporate-owned or franchised locations across the country. Through its neighborhood stores and digital platform, the Company offers more than 9,000 competitively priced products, including an assortment of premium, super premium and holistic brands. Its family of stores consists of Pet Valu, Bosley’s by Pet Valu, Total Pet and Tisol Pet Nutrition & Supply. Its product categories include puppy essentials, dog food, dog treats, dog toys, dog collars, leashes & harnesses, dog carriers & travel, kitten essentials, cat food, cat litter & litter boxes, cat bowls & feeding, small pet food, treats & hay and aquariums, kits & tanks. Its brands include Performatrin Ultra, ACANA, Royal Canin, ORIJEN, Go! Solutions, Performatrin Prime, Hill's Science Diet, Big Country Raw, Open Farm and Stella & Chewy’s, Purina Proplan, Purina Pro Plan, and Weruva.

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Pet Valu Holdings Ltd

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Post by retiredcfon May 07, 2024 8:57am

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Post# 36026521

RBC

May 7, 2024

Pet Valu Holdings Ltd.
Better by a whisker: PET Q1/24 First look - Solid and in-line

TSX: PET | CAD 32.07 | Outperform | Price Target CAD 35.00

Sentiment: Neutral

Bottom line: Neutral, with virtually all operating metrics within range of expectations, supportive of our Outperform rating.

Tone of the release confident, noting current performance consistent with historical resiliency of the category, with SSS +0.8%, reflecting heightened consumer value seeking behaviour, lower sales of non-essentials. 2024 outlook reiterated.

Highlights of Q1/2024 results:

Adjusted EPS $0.35, +9% Y/Y and a whisker ahead of forecast $0.32/consensus $0.31.
SSS growth/revenue growth a tick ahead of forecast: SSS Q3 +0.8%, driven by 2.3% decrease in transaction count, more than offset by 3.2% increase in average transaction size. Total revenue growth +4.2%, vs forecast +3.3%.
Store count: 794, +11 YTD, putting PET on solid footing relative to new store growth target 40-50 in 2024. Franchised stores 71.3% of total, +140 bps Y/Y.
Adjusted EBITDA $56.6 MM +15.9%, a tail above forecast/consensus $53-$54 MM. D&A/interest above prior year due to investments, but in line with forecast.
Solid balance sheet/CF to support growth, net leverage at Q1/24 of 2.1x, stable.
Inventory: -7% Y/Y.

2024 Operating outlook unchanged:

• SSS: +2-5%.
• Store openings: 40-50, +5-6%.
• Revenue: $1.11-$1.14 B, +5 to +8%, last published forecast $1.13 B. • Adjusted EBITDA $248-$254 MM, +7-10%, last published $251 MM. • EPS $1.57-$1.63, -2.5% to +1.2%, last published $1.59.
• Capex: $55 MM, unchanged.

Conference call 8:30 am: 1-833-950-0062 (ID: 440652)

Expect focus of the call to be: i) key drivers of Q1 performance; ii) colour around consumer spending trends, notably evolution of value-seeking behaviour (trade-down, pack size, etc) and performance of discretionary categories, iii) competitive/promotional intensity and any incremental impact in online channel in GTA; iv) surrender/adoption rate; v) update on infrastructure investments.