MARKHAM, ONTARIO — Specialty pet retailer Pet Valu released its financial results for the 2021 fourth quarter and fiscal year on March 9, revealing strong fourth quarter growth attributed to overall growth in the fiscal year despite higher SG&A expenses.
Canadian dollar (CAD) to US dollar (USD) currency conversions are based on March 14 exchange rates.
Fourth-quarter revenue increased 9.7% to $223.1 million CAD ($182.5 million USD) compared to $203.4 million CAD ($159.3 million USD) in the fourth quarter of 2020, which the company claims was led by retail store growth, including new stores, as well as franchise revenues.
Same-store sales growth was 16.7%, driven by a 10.8% increase in same-store transactions, compared to 18% in 2020. The company noted that same-store transactions were deeply impacted by COVID-19 restrictions, creating a shift in customer behavior.
Gross profit increased 8.6% to $82 million CAD ($64.2 million USD) compared to $75.5 million CAD ($58.7 million USD) in 2020. The gross profit margin was down slightly at 36.8% compared to 37.1% in 2021, which Pet Valu attributed to absorption of freight costs and higher distribution costs offset by higher revenue.
The company’s SG&A expenses decreased about 0.4% to $40.8 million CAD ($32 million USD), making SG&A about 18.3% of the company’s revenue in the fourth quarter. According to Pet Valu, the decrease in SG&A was driven by lower professional fees and compensation costs.
Pet Valu’s adjusted EBITDA was $53.3 million CAD ($41.7 million USD), compared to $47.8 million CAD ($37.4 million USD) in 2020. Adjusted net income per diluted share was $0.41 CAD ($0.32 USD), up ten cents from the fourth quarter of 2020.
“Our strong fourth quarter performance capped off a record year for our business, where we made significant advancements in our strategic agenda, despite a challenging operating environment,” said Richard Maltsbarger, president and chief executive officer, Pet Valu. “Attractive holiday assortments and depth of inventory complemented our unique and engaging customer experiences and omnichannel capabilities to help Pet Valu again take market share in Canada’s growing pet industry.”
For its full fiscal year 2021, Pet Valu’s revenue increased 19.7% to $776 million CAD ($607.7 million USD), compared to $648.5 million CAD ($507.9 million USD) in 2020, which the company cited was led by a growth in retail sales.
Same-store sales growth was 17.8%, mainly led by a 10.5% increase in same-store transactions, compared to 10.6% same-store sales growth in 2020. According to Pet Valu, same-store sales were significantly impacted by COVID-19 and governmental lockdowns in 2020.
The company’s gross profit increased 24.5% to $287.2 million CAD ($225.2 million USD), compared to $230.6 million CAD ($180.6 million USD) in 2020.
SG&A expenses increased 23.3% to $157.8 million CAD ($123.6 million USD), compared to $128.0 million CAD ($100.2 million USD) in 2020. According to Pet Valu, this was driven by increased compensation costs and higher advertising, information technology and professional fees.
Pet Valu’s adjusted EBITDA for the 2021 fiscal year was $182.3 million CAD ($142.8 million USD), compared to $144.4 million CAD ($113.1 million USD) in 2020.
For the 2022 fiscal year, Pet Valu expects to reach a revenue between $845 million and $870 million CAD ($661.8 million to $681.3 million USD), supported by the newly acquired Les Franchises Chico, Inc. and the addition of 30 to 45 new retail stores. Adjusted EBITDA for the full fiscal year 2022 is estimated between $187 million and $194 million ($147.4 million to $151.9 million USD), and adjusted net income per diluted share is projected between $1.37 and $1.44 ($1.07 to $1.13 USD).
“As we look ahead to 2022, we target another year of growth ahead of our long-term model,” Maltsbarger said. “We are also excited to welcome Chico to the Pet Valu family, providing us with an experienced entry into Quebec, and positioning us to better serve Canada’s devoted pet lovers with 700 stores across all 10 provinces.”
With a decrease in global COVID-19 cases and restrictions, the company anticipates 2022 year-over-year growth to be stronger in the first quarter compared to the second quarter of this year.
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