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Canadian pet food and supplies retailer Pet Valu Holdings Ltd. PET-T offered an ambitious outlook for 2023 on Tuesday, saying it expects to grow revenue, increase sales and expand its share of the lucrative pet industry market this year.

The forecast, part of its latest earnings release, includes projected revenue of more than a billion dollars driven by anticipated same-store sales growth of up to 10 per cent.

The company also plans to open between 40 and 50 new stores this year.

The strong projections come amid an increasing pet population and the “humanization and premiumization” of the industry, Pet Valu president and CEO Richard Maltsbarger said in an interview.

“Dogs used to sleep in doghouses and now they’re in the bedroom, possibly up on the bed with you,” he said in an interview.

“As a result of that humanization, we’ve seen a premiumization across the industry as people really lean into higher quality products and food with human-grade ingredients.”

The pet industry is becoming increasingly crowded as pet specialty retailers expand and grocers and other established retailers increase their pet food and supplies offerings.

But Pet Valu’s unique and premium products set it apart, Maltsbarger said.

“Only 10 per cent of the food products we sell overlap with the grocery mass channel,” he said. “So 90-plus per cent of the food products we sell are specialty pet specific, and even within that about 26 per cent of our sales are our own proprietary branded products.”

Pet Valu also sets itself apart by offering “just around the corner” retail stores, Maltsbarger said.

“We’re in all types of markets – urban, suburban, rural,” he said. “We are within five kilometres of 74 per cent of Canadians.”

Of the company’s 744 stores, 225 are corporately owned while the rest are franchised with local owner-operators, Maltsbarger said.

It’s the company’s dedicated owners and staff that distinguishes it from the competition, he said.

“We win because of people. Our model is based off of some of the most compassionate, most expert people in the marketplace,” Maltsbarger said. “We have low turnover and high levels of expertise development.”

The outlook for 2023 came as the company raised its dividend and reported a profit of $25.9 million in its latest quarter, down from $26.7 million a year earlier.

Pet Valu said it will now pay a quarterly dividend of 10 cents per share, up from six cents per share.

The increased payment to shareholders came as its profit amounted to 36 cents per diluted share for the 13-week period ended Dec. 31, down from 37 cents per diluted share a year earlier.

Revenue totalled $266 million, up nearly 20 per cent from $223.1 million in the same quarter a year earlier, helped by higher retail sales and the company’s acquisition of Les Franchises Chico Inc.

Same-store sales growth came in at 11.8 per cent, boosted by a 4.6 per cent increase in same-store transactions and a 6.9 per cent increase in same-store average spend per transaction.

The company opened 16 new stores during the quarter.

On an adjusted basis, Pet Valu said it earned 43 cents per diluted share in its fourth quarter, up from 41 cents per diluted share in the fourth quarter of 2021.

In its outlook for 2023, the company said its adjusted net income per diluted share is expected between $1.60 and $1.66 for the year.

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