Pet Valu Holdings Ltd.

Good morning, everyone. Thank you for standing by. Welcome to PetValue's first quarter 2026 earnings conference call. My name is Liz and I will be coordinating today's call. All lines have been placed on mute to prevent any background noise. Please note that following the formal remarks, there will be a question and answer session. If you'd like to ask a question at that time, please press star 1 1 on your telephone keypad. If you're using a speakerphone, please lift the handset before pressing any keys. we kindly request that you limit your time to one question plus a follow-up before cycling back into the queue so that we allow time for as many of you to ask questions as possible. I would now like to turn the call over to James Allison, Vice President of Investor Relations and Treasury at PetValue. Please go ahead, Mr. Allison.

Good morning, and thank you for joining PetValue's call to discuss our first quarter 2026 results, which were released earlier this morning and can be found on our website at investors.petvalue.ca. With me on the call is Greg Ramier, Chief Executive Officer, and Linda Drysdale, Chief Financial Officer. Before we begin, I would like to remind you that management may make forward-looking statements, which include guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties, which would cause actual results to differ materially from those expressed today. For a broader description of risks related to our business, please see our Q1 2026 MD&A 2025 Annual Information Form, and other filings available on CDAR+. Today's remarks will also be accompanied by an earnings presentation, which can be viewed through our live webcast and is also available on our website. Now, I'd like to turn the call over to Greg.

Thank you, James, and good morning, everyone. I'll start with the review of the quarter and our operational accomplishments, then pass it over to Linda to discuss our financials and outlook. The Canadian pet industry continued to be shaped by a strong desire for value in Q1, driven by sustained, if not rising inflationary pressure across household budgets. Most notable are retail fuel costs, which rose 40% through the quarter and have contributed to declines in prominent consumer confidence indices and spending expectations measured by the Bank of Canada. Importantly, Pet value is there to meet the needs of devoted pet lovers, leveraging our prior price investments and SHARP promotional program together with complementary strengths in convenience, quality, and expertise to drive meaningful market share gains in the quarter. To that end, we were pleased to deliver revenue growth of 3% at the midpoint of our full year guidance, making us one of the fastest pockets of growth within Canadian pet retail. The composition of this growth tells a tale of two stories. We saw higher discount sales penetration as heightened value-seeking industry-wide, saw devoted pet lovers lean heavier into periods of events and promotions which weighed on our margin rate in the quarter. However, when taking a closer look, our growth was in the right areas of our business. Our loyalty penetration hit another all-time record of approximately 90% in the quarter, and within that cohort, we successfully converted more casual customers to monthly shoppers, drawn by our compelling value and offering in needs-based consumables. This is a critical outcome because as pet value becomes the habitual destination where more and more devoted pet lovers do their monthly stock-ups, this stickiness will continue to pay dividends well into the future, especially as consumer confidence improves. Importantly, our scale and capabilities remain central to our clear competitive advantage in today's TIDR market. Our strong vendor relationships together with procurement economics enabled opportunities to deliver value at competitive investment levels while growing volumes with our strategic pet specialty brand partners. The breadth and the legacy of our proprietary food brands worked in lockstep at each quality tier, providing compelling opportunities for customer trade-up or retention. Additionally, we continued to realize efficiencies and leverage from our world-class pet specialty supply chain, all while maintaining industry-leading on-time, in-full service levels to our stores and franchisees. And throughout all of this, we consistently returned capital to our shareholders in the quarter through share buybacks fueled by our strong free cash flow and easing business reinvestment needs. From an operational perspective, we advanced several initiatives in the quarter aligned with each of our three core focuses. On our first focus, to be Canada's local and everywhere pet specialty retailer. Network expansion activities started the year off strong. We and our franchisees opened eight stores in the first quarter, including further expansion into rural markets with exciting openings in the Northern Ontario communities of Wawa and Manitowosh. We ended the quarter with 870 stores nationwide and are pacing to open roughly 40 stores this year, many of which will provide us with first to market pet specialty access to growing rural communities across the country. At the same time, Our digital capabilities continue to provide a tailwind to our growth. While we saw solid growth through our direct-to-consumer channel, performance was strongest in click-and-collect and online delivery platforms. This underscores the strength of our unmatched omnichannel offering, where our digital and physical presence complement one another to provide industry-leading convenience to devoted pet lovers across Canada. Basket analysis continues to indicate Online delivery platform customers are over-indexing in in-store only products like our frozen raw or gently cooked offering, reiterating the incrementality of this business to our direct-to-customer platform. We also saw further momentum in our auto ship subscription service in the quarter, with strong growth and low churn since the introduction of our everyday offer last year. We've seen strong participation from our vendors, helping to supply compelling offers and drive incremental sales. In addition to convenience, we amplified our strengths in value, quality, and expertise to deliver the best pet customer experiences. We continue to be pleased with our competitive pricing position following our investments throughout 2025, which has been a critical component to our ongoing success winning the monthly shop over the last year. In the first quarter, we complemented this with new programs, events, and promotional activities. Following years of success with our Tree of the Month offering, we launched our Item of the Month program in February, providing exciting value on Everyday Hardline's essentials to help build the basket. We've been pleased with its reception as performance has increasingly exceeded our expectations, building momentum with each subsequent month. Also in February, we participated in Tim Horton's iconic Roll Up to Win contest as the first ever pet prize partner, enabling devoted pet lovers to share their winnings with their four-legged family members. Not only was this a great brand building collaboration, it also broadened our reach, drawing in new pet parents to our ecosystem. And through the quarter, we delivered a sharpened promotional program, enhancing our relevance within a competitive marketplace. Just as important are the investments we are making to deliver newness to our assortment through high-quality and innovative products. Just this month, we launched an exclusive listing of Canada Pooch's new interactive toy line, Leg Labs. We also have some exciting new innovation coming from our proprietary brands, including Performatron Prime Digestive Care, representing our first foray into vet-formulated diet consumables. and the expansion of our Performatron culinary lineup with the introduction of frozen raw for cats. And finally, we're elevating our in aisle expertise, highlighted by our enhanced culinary experience, which strengthens our position within the highest growth consumables category. Converted stores are outperforming the rest of the network on culinary specific and total store sales at expected gaps. Following the completion of over 130 stores in 2025, we will complete roughly 40 conversions in 2026, heavily weighted towards franchise stores, starting in late Q2. At the same time, we are continuing our ACE training to reinforce knowledge and share best sales practices learned through the first year of the program. Turning to our third focus to fortify strong retail and wholesale fundamentals, in our stores, We are continually refining our customer service model to empower our aces as they deliver the best advice and product recommendations. With today's dynamic promotional environment, our corporate, field, and frontline teams are working closer than ever to develop and execute our commercial strategy at speed, which is showing up in the sustained strength of our units per transaction, or UPT. At the same time, enhancements within our supply chain are progressing as planned, with the successful implementation of our labour management system in our flagship Brampton DC in January setting the stage for subsequent rollouts across our remaining DCs later this year. We are also in the midst of activating inbound transportation management systems across our three DCs. These enhancements, together with continual process optimizations unlocked by our new facilities and automation, are delivering the expected efficiency and productivity gains, providing a consistent leverage on our DC costs. As we apply insights from our Q1 performance and what we are seeing today, I want to share with you what has changed in our outlook for the year, and just as importantly, what hasn't since we last spoke with you in early March. First, what has changed? As I mentioned earlier, devoted pet lovers, like all Canadians, have had to absorb a surge in fuel prices starting in March, elevating value-seeking behavior which continues today. Additionally, starting in the second quarter, we are gradually seeing the implications of higher fuel prices on our cost structure through transportation, freight, and procurement. As you would expect, we are taking decisive actions to adapt making responsible decisions on where and how to best direct our investments. We are optimizing our commercial plan with speed to deliver value more efficiently while contemplating these cost pressures. We are also calibrating our operating expenses to capture savings that provide stronger support to our competitive positioning. At the same time, we will benefit from the gradual lapping of last year's price investments and from planned corporate resale activity through the balance of the year. Now to the elements of our outlook that haven't changed. We continue to see heightened yet rational competitive behavior in our market, and we will continue to encourage a stable trading environment. We also retain strong conviction in our ability to continue winning and grow share in this environment, like we did in Q1, leveraging our scale and capabilities to be Canada's pet retailer of choice. We have incorporated all of this into our updated outlook for the year, which we believe is realistic and achievable. I'll now pass it over to Linda to walk through our financials and update a full year outlook in more detail. Linda?