Pet Valu Holdings Ltd.

Good morning, everyone. Thank you for standing by. Welcome to Pet Value's second quarter 2026 earnings conference call. My name is Cherie, and I will be coordinating today's call. All lines have been placed on mute to prevent any background noise. Please note that the following remarks, after the following remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star 1 1 on your telephone keypad. If you are 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 as much time as for 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 Pet Value. Please go ahead, Mr. Allison.

Good morning and thank you for joining Pet Value's call to discuss our second 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 Q2 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 would like to turn the call over to Greg. Thank you James and good morning everyone.

I am pleased to report our second quarter results which showed an inflection in profitability compared to our Q1 trend. Gross margins improved to 32.5% and adjusted EBITDA margins reached 22.4% all while maintaining solid top line momentum and further market share gains. These improved outcomes were direct results of the actions we took to execute our strategy while adapting to today's demand and cost environment. Let me call it a few highlights. First, we made calibrated adjustments to our commercial plan through the second quarter. We delivered value where it would have the biggest impact for devoted pet lovers, all while encouraging a stable trading environment and providing room for our strengths in quality pet products and expert advice to shine. Second, our team sharpened their focus on cost management. Leveraging our position as one of the fastest pockets of growth within Canadian Pet, we work closely with strategic specialty pet brands to mitigate rising product and fuel costs, helping us deliver value at more competitive investment levels. Third, we drove a fourth consecutive quarter of distribution cost leverage unlocked by our supply chain transformation. with much more benefits expected to come. And fourth, we were very active on corporate store resales, with a record tying 11 locations sold in the quarter to new and existing franchisees, including the first resales under our Chico banner. The impact of each of these tailwinds was amplified by another quarter of solid top line growth and market share gains. Revenue grew almost 4%, supported by our proven strategies, Network expansion into growth markets, momentum in e-commerce, and rising wholesale penetration as our franchisees ordered more through us. Same-store sales trends were largely consistent with Q1, despite lapping our strongest comp of 2025 in the second quarter and ongoing value-seeking consumer behavior following the rise in fuel prices. We believe our ability to maintain consistent same-store sales growth demonstrates the resilient appeal of our value proposition as we deployed a more balanced commercial plan in the quarter. Once again, we were pleased with the composition of these sales as we grew share of wallet with our loyalty customers, converting more to monthly shoppers. And while higher fuel prices shaped purchase frequency, we grew tonnage as devoted pet lovers stocked up when they shopped with us. At the same time, we executed on each of our three main themes underpinning our long-term strategy. First, to be Canada's local and everywhere pet specialty retailer. We opened seven stores in the quarter, bringing us to 15 new stores so far this year. As I mentioned earlier, we are expanding into resilient, growing markets, such as Alberta, as well as rural towns, which have historically been underserved by pet specialty. We ended the quarter with 877 locations coast to coast, 71% of which are franchised, representing a slight uptick in penetration from Q1 due to the pace of corporate resales. This is a particular highlight for me as it demonstrates the strong interest we see from new and existing franchisees to invest in our business. This is due in large part to the close relationship we share and the long-term commitment we place in achieving joint success with our franchisees. The growing scale of our store network is paying dividends within our digital channel, where demand for online delivery platforms and click and collect help drive record growth. We are pleased with the momentum in both of these areas, where support from limited time offers drove excitement and adoption of those platforms. At the same time, our auto ship subscription service continues to grow, both in absolute dollars and as a proportion of our digital sales, as more devoted pet lovers leverage its convenience for their reoccurring orders. Moving to our second focus, to deliver the best pet customer experiences. Our merchandising, marketing, and in-store teams continue to do what they do best, curating a strong selection of high quality and innovative products, delivered with helpful advice and exceptional value. Their efforts in the second quarter centered on delivering value more effectively, leveraging our scale, and working with specialty brands to deliver exciting programs. In hard lines, our refreshed go-to-market strategy continued to take shape. We saw further momentum in our recently introduced Item of the Month program, providing devoted pet lovers with low price point, High Appeal Hard Goods to add to their baskets. On the back of this program's success and the long-standing popularity of our Tree of the Month program, we will be expanding these programs into our Chico banner in Quebec as we increasingly leverage our scale and expertise to better serve Quebec's pet parents. We were also pleased with our performance in toys, which grew nicely in the quarter. The resurgence of this category has been led by key national brands, several of which were introduced late last year, injecting newness and excitement into our offering. In consumables, culinary was a standout once again, with our enhanced in-store experience amplifying sustained demand from devoted pet lovers. As the fastest pocket of growth within consumables, it is clear pet parents remain committed to providing better nutrition for their pets and are choosing pet value to help meet these needs. We expect these trends to continue, supported by key category extensions such as our recently introduced Performatron Culinary Frozen Raw for Cats and Frozen Goat Yogurt Salmon Bites for Dogs. We also made an exciting advancement on our roadmap to providing greater personalization through our loyalty program. In the quarter, we piloted providing enhanced loyalty data to our in-store aces at the checkout, enabling their ability to deliver service and meaningful conversations at an individual level. This has since been rolled out across most of our network and provides the foundation for incremental personalization initiatives we have planned for later this year. And finally, our third focus, to fortify strong wholesale and retail fundamentals. The most prominent actions on this front center around our supply chain activities, which continue to provide a meaningful tailwind to our margins, even throughout the current higher fuel cost environment. This is being driven by the culmination of multiple initiatives, from the sharpening of our performance management enabled through our new labour management systems, to best practice training across our DCs, to cost avoidance unlocked through our scale. All of these were made possible by our supply chain transformation, with a long tail of further benefits expected over the coming quarters and years. Altogether, our business delivered the improved operational and financial performance we expected in the second quarter. We were pleased with our ability to deliver value to devoted pet lovers, competitive wholesale pricing to franchisees, and return capital to our shareholders through our active dividend and share repurchase programs. With that, I'll turn it over to Linda to dive into the numbers.