Slides
Page 1
Q2 2026 Financial & Operating Review For 13 - week period ended Jul . 4 , 2026 50 TOGETHER YEARS petvalu bösley's BY PET VALU Paulmac's Pets Tisol Total Pet Pet Nutrition & Supply Stores
Page 2
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 2 Disclaimer Forward-Looking Information This presentation contains forward-looking information. Forward-looking information is provided as of the date of this presentation and is based on management’s opinions, estimates and assumptions in light of its experience and perception of historical trends, current trends, current conditions and expected future developments, as well as other factors that management believes appropriate and reasonable in the circumstances. Particularly, information regarding the Company’s 2026 outlook and expectations, intentions or projections of future results, performance, achievements, prospects, opportunities or the markets in which the Company operates is forward-looking information. To the extent any forward-looking information in this presentation constitutes future-oriented financial information, within the meaning of applicable securities laws, such information is being provided to demonstrate the potential of the Company and readers are cautioned that this information may not be appropriate for any other purpose. Pet Valu does not undertake to update any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. Many factors could cause the Company’s actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking information, including, without limitation, the factors discussed in the “Risk Factors” section in our annual information form (“AIF”) dated March 2, 2026, which can be accessed under our profile on SEDAR+ at www.sedarplus.ca. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. The forward-looking information contained in this presentation is expressly qualified by this cautionary statement. Non-International Financial Reporting Standards (“IFRS”) and Supplementary Financial Measures and Non-IFRS Ratios This presentation makes reference to certain non-IFRS measures and non-IFRS ratios. These measures and ratios are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. Pet Valu uses non-IFRS measures, including “EBITDA”, “Adjusted EBITDA”, “Adjusted Net Income”, “Net Capital Expenditures” and “Free Cash Flow” and non-IFRS ratios, including “Adjusted EBITDA Margin” and “Adjusted Net Income per Diluted Share”. Reconciliations of these non-IFRS measures are presented in the Appendix. This presentation also makes reference to certain supplementary financial measures that are commonly used in the retail industry, including “system-wide sales”, “same-store sales growth (decline)”, “same- store transaction growth (decline)”, and “same-store average spend per transaction growth (decline).” These non-IFRS measures, non-IFRS ratios and supplementary financial measures are used to provide investors with supplemental measures of Pet Valu’s operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures, non-IFRS ratios and these supplementary financial measures in the evaluation of issuers. Management uses non-IFRS measures and non-IFRS ratios in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and to determine components of management compensation. Refer to Management’s Discussion and Analysis (“MD&A”) for the second quarter ended July 4, 2026, for further information on non-IFRS measures, non-IFRS ratios (including each non-IFRS measure that is used as a component of such non-IFRS ratios) and supplementary financial measures, including for their definition and, for non-IFRS measures, a reconciliation to the most comparable IFRS measure.
Page 3
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 3 Today’s Presenters Greg Ramier Chief Executive Officer Linda Drysdale Chief Financial Officer
Page 4
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. Q2 2026 Highlights $291M Revenue (+4% vs. Q2 2025) $65M Adjusted EBITDA (22% Adjusted EBITDA margin) $0.41 Adj. Net Income per Diluted Share ($25 million Net Income) Note: Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA margin and Adjusted Net Income per Diluted Share are non -IFRS ratios. Refer to “Disclaimers – Non-IFRS and Supplementary Financial Measures and Non -IFRS Ratios” and the Appendix for a reconciliation of certain non-IFRS measures and ratios. 7 New Store Openings (15 year-to-date) 7 Renovations, Expansions, Relocations $38M Capital returned to Shareholders ($18M in dividends, $20M in buybacks)
Page 5
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 5 Our Key Focuses • Opening new stores across Canada • Continual renovations, expansions and relocations • Growing our franchisee community • Enhancing our digital capabilities Best Pet Customer Experience in Canada Strong Wholesale & Retail Fundamentals • Offering compassionate, expert in-store customer service • Curating an attractive, premium product offering • Expanding our proprietary brand selection and value • Enhancing our loyalty program • Driving efficiencies and productivity in our supply chain • Modernizing back-office systems and infrastructure • Optimizing in-store and corporate operating processes $ Delivering Strong Free Cash Flow and Return on Invested Capital Local & Everywhere Pet Specialty Retailer
Page 6
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 6 Q2 2026 Key Financial Metrics 1 PY refers to Q2 2025. 2 Basket refers to same-store average spend/transaction growth (decline), traffic refers to same -store transaction growth (decline). 3 Excluding costs related to the supply chain transformation in Q2 2025. Note: All figures in millions of $ unless otherwise noted. Adjusted Net Income is a non -IFRS measure. System-wide sales, same-store sales growth (decline), same-store average spend/transaction growth (decline) and same-store transaction growth (decline) are supplementary financial measures. Please see “Disclaimers – Non-IFRS and Supplementary Financial Measures and Non -IFRS Ratios” and the Appendix for a reconciliation of certain non-IFRS measures. System-wide sales (“SWS”) Same-store sales decline Revenue Gross profit margin Q2 2026 $377.3 (0.2%) $290.7 vs. PY1 32.5% +2.0% +3.6% (110) bp3 Drivers • Price investments made in late 2025 and higher occupancy costs, partially offset by distribution efficiencies • Revenue growth and lower SG&A expenses, partially offset by lower gross profit margin • 45 new stores in last 12 months (“LTM”) • Basket2 +1.2% and Traffic2 (1.4)% • SWS growth and higher wholesale penetration Adjusted EBITDA $65.0 +8.0% Adjusted EBITDA Margin 22.4% +100 bp Adjusted Net Income $28.2 +7.5% Adj. Net Income per Diluted Share $0.41 +7.9% Net Income $24.9 +14.3% --- • Higher Adjusted EBITDA and higher depreciation and amortization costs
Page 7
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 7 Q2 2026 Key Financial Metrics Liquidity $175M cash + revolver capacity 1Net Leverage Ratio = Net Debt (including leases and net of cash) / LTM Adjusted EBITDA. 2 Free Cash Flow (“FCF”) Conversion = LTM Free Cash Flow / LTM Adjusted EBITDA. Note: Free Cash Flow and Net Capital Expenditures are non -IFRS measure. Please see “Disclaimers – Non-IFRS and Supplementary Financial Measures and Non-IFRS Ratios” and the Appendix for a reconciliation of certain non-IFRS measures. Net Leverage Ratio1 2.3x Consistent with Q1 2026 Inventory $134M (5)% vs. Q2 2025 Net Capital Expenditures ($2)M $5M year-to-date Free Cash Flow $33M 42% FCF conversion2 Share Repurchases $20M $35M year-to-date
Page 8
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 8 2026 Outlook 1 Expressed on a 52-week comparable basis for Fiscal 2025. 2 Includes approximately $20 million in Net Capital Expenditures and $15 million in transformation costs. New store openings Adj. EBITDA margin Business reinvestment Adj. Net Income per Diluted Share Same-store sales growth …supported by… ~$35M2 Similar to Fiscal 20251 ~21% +2% to +4%1 Flat to +2% ~40 Revenue growth
Page 9
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 9 Our Misson To be Canada’s preferred pet retailer delivering the products, care, expertise, and memorable moments that devoted pet lovers want… locally in stores and everywhere online.
Page 10
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 10 Appendix
Page 11
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 11 Reconciliation of Adjusted EBITDA Quarters Ended Jul. 4, 2026 (13 weeks) Jun. 28, 2025 (13 weeks) Net income $24,933 $21,810 Depreciation & amortization 19,151 17,658 Interest expense, net 7,453 7,447 Income tax expense 9,325 8,125 EBITDA 60,862 55,040 Adjustments to EBITDA: Transformation costs(1) 2,675 1,266 Other professional fees(2) 25 405 Share-based compensation(3) 1,120 4,098 Asset impairments(4) 115 ― Loss (gain) on foreign exchange 188 (634) Adjusted EBITDA $64,985 $60,175 Adjusted EBITDA Margin (% of revenue) 22.4% 21.4% (1) Represents (i) discrete, project-based implementation costs associated with new information technology systems related to transformational initiatives supporting finance systems, e -commerce and omni-channel capabilities and other key processes; (ii) costs associated with supply chain and merchandise transformation initiatives, such as duplicative warehousing and distribution costs, implementation costs associated with new information technology systems, other transition costs incurred during the transition to a new distribution centre; and for Adjusted Net Income, duplicative depreciation expense on property and equipment and right-of-use assets, and interest expense on lease liabilities; and (iii) severance expenses associated with restructuring activities in certain business support functions and expenses related to a reorganization of the senior leadership team. Transformation costs included in cost of sales in Q2 2026 were $nil (Q2 2025 – $0.3 million) and in selling, general, and administrative expenses were $2.7 million (Q2 2025 – $0.9 million). (2) Represents professional fees primarily incurred with respect to the Canada Revenue Agency’s (“CRA”) examination of the Company’s Canadian tax filings discussed in the “Income Taxes” section of its MD&A for the second quarter ended July 4, 2026. These fees are included in selling, general and administrative expenses. (3) Represents share-based compensation in respect of our amended and restated share option plan, long- term incentive plan, and deferred share unit plan which is included in selling, general and administrative expenses. (4) Represents a non-cash impairment charge primarily related to the right-of-use asset for a corporate store which was included in selling, general and administrative expenses. Notes: All figures in thousands of $ unless otherwise noted; These non -IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measu res by providing further understanding of the Company’s results of operations from management’s perspective. EBITDA and Adjusted EBITDA are non-IFRS measures and Adjusted EBITDA Margin is a non -IFRS ratio and are used by management to facilitate a comparison of our operating performance on a consistent basis from period -to-period and to provide for a more complete understanding of factors and trends affecting our business.
Page 12
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 12 Reconciliation of Adjusted Net Income (1) Represents (i) discrete, project-based implementation costs associated with new information technology systems related to transformational initiatives supporting finance systems, e -commerce and omni-channel capabilities and other key processes; (ii) costs associated with supply chain and merchandise transformation initiatives, such as duplicative warehousing and distribution costs, implementation costs associated with new information technology systems, other transition costs incurred during the transition to a new distribution centre; and for Adjusted Net Income, duplicative depreciation expense on property and equipment and right-of-use assets, and interest expense on lease liabilities; and (iii) severance expenses associated with restructuring activities in certain business support functions and expenses related to a reorganization of the senior leadership team. Transformation costs included in cost of sales in Q2 2026 were $nil (Q2 2025 – $0.8 million), in selling, general, and administrative expenses were $2.7 million (Q2 2025 – $0.9 million), and in interest expense on the lease liability was $nil (Q2 2025 – $0.2 million). (2) Represents professional fees primarily incurred with respect to the CRA examination of the Company’s Canadian tax filings discussed in the “Income Taxes” section of its MD&A for the second quarter ended July 4, 2026. These fees are included in selling, general and administrative expenses. (3) Represents share-based compensation in respect of our amended and restated share option plan, long- term incentive plan, and deferred share unit plan which is included in selling, general and administrative expenses. (4) Represents a non-cash impairment charge primarily related to the right-of-use asset for a corporate store which was included in selling, general and administrative expenses. Notes: All figures in thousands of $ unless otherwise noted; These non -IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measu res by providing further understanding of the Company’s results of operations from management’s perspective. Adjusted Net Income is a non-IFRS measure and Adjusted Net Income per Diluted Shares is a non -IFRS ratio, both of which are used by management to facilitate a comparison of our operating performance on a consistent basis from period -to- period and to provide for a more complete understanding of factors and trends affecting our business. Quarters Ended Jul. 4, 2026 (13 weeks) Jun. 28, 2025 (13 weeks) Net income $24,933 $21,810 Adjustments to Net Income: Transformation costs(1) 2,675 1,920 Other professional fees(2) 25 405 Share-based compensation(3) 1,120 4,098 Asset impairments(4) 115 ― Loss (gain) on foreign exchange 188 (634) Tax effect of adjustments to net income (893) (1,391) Adjusted Net Income $28,163 $26,208 Adjusted Net Income per Diluted Share $0.41 $0.38
Page 13
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 13 Reconciliation of Net Capital Expenditures Notes: All figures in thousands; These non -IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further und erstanding of the Company’s results of operations from management’s perspective. Net Capital Expenditures is a non-IFRS measure and is a key metric as an indicator of investment in long- term growth and operational capacity. Quarters Ended Jul. 4, 2026 (13 weeks) Jun. 28, 2025 (13 weeks) Purchases of property and equipment $(4,707) $(11,947) Purchases of intangible assets (498) (414) Proceeds on disposal of property and equipment 7,064 66 Tenant allowances (51) 387 Net Capital Expenditures $1,808 $(11,908)
Page 14
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. 14 Reconciliation of Free Cash Flow Notes: All figures in thousands; These non -IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further und erstanding of the Company’s results of operations from management’s perspective. Free Cash Flow is a non-IFRS measure and is a key metric as an indicator of how much cash is available for debt repayment, share repurchases, re-investment in the Company and other financing activities. Quarters Ended Jul. 4, 2026 (13 weeks) Jun. 28, 2025 (13 weeks) Cash provided by operating activities $47,786 $52,525 Cash used in investing activities 11,409 (1,941) Tenant allowances (51) 387 Repayment of principal on lease liabilities (19,863) (17,714) Interest paid on lease liabilities (6,329) (5,958) Notes receivables (97) (151) Free Cash Flow $32,855 $27,148
Page 15
This presentation and any information contained herein may not be used, copied, reproduced, published, transmitted or redistributed, in whole or in part, without the prior written consent of Pet Valu Canada Inc. © 2026 Pet Valu Canada Inc. Thank You Contact Us: investors@petvalu.ca (289) 806-4559