Pet Valu's incoming CEO Greg Ramier at a Pet Valu store in Markham, Ont. Pet Valu's long-term goal is to reach 1,200 locations across Canada, Mr. Ramier says.Cole Burston/The Globe and Mail
There will be a new top dog at Pet Valu Holdings Ltd. PET-T next month, as Greg Ramier replaces retiring chief executive officer Richard Maltsbarger.
Canada’s largest pet-supply retailer announced the transition Tuesday, as it reported increased revenue and profit in the second quarter, and boosted its growth forecasts for this year.
Mr. Ramier, a former Loblaw Cos. Ltd. executive, joined Pet Valu last August as president and chief operating officer. He takes over as CEO on Sept. 21, while Mr. Maltsbarger will remain with the company as a board member and senior adviser until his retirement next April.
Pet Valu has benefited from a boom in pet ownership in Canada since the pandemic, as well as from consumers who have recently proven willing to buy more premium products for their furry friends – a trend that applies to Mr. Ramier.
His six-year-old Bernedoodle, Crosby, eats raw food and Mr. Ramier’s family visits their local Pet Valu store every week because he doesn’t “want to dedicate that much space” in his freezer, he said in an interview.
Pet Valu reports first-quarter profit and revenue up from year ago
Premium pet food – a category Pet Valu refers to as “culinary” – is one of the chain’s fastest-growing product segments. People who buy these frozen raw, freeze-dried raw and “gently-cooked” foods spend roughly double the average customer on an annual basis. They are part of a trend of “humanization” that has led people to see their pets differently.
“If you think about who these people are and the quality of care they provide to their pets, this is a critical part of the family, and they want to make that level of investment,” Mr. Maltsbarger said.
It’s not just the food that has changed. Markham, Ont.-based Pet Valu is a much different retailer than it was in 2018, when owners Roark Capital Group hired Mr. Maltsbarger away from U.S. hardware chain Lowe’s.
At the time, Pet Valu had no e-commerce business, operated its loyalty program with paper cards, and had an out-of-date distribution system that bogged down operations. Mr. Maltsbarger led a technological transformation, launching online shopping from scratch during the pandemic and building three new automated distribution facilities.
Outgoing CEO Richard Maltsbarger, right, says he decided to retire and hand the reins to Mr. Ramier so he can spend more time with his wife.Cole Burston/The Globe and Mail
In preparation for taking the company public, Mr. Maltsbarger shuttered Pet Valu’s U.S. retail stores and spun off its Pet Supermarket business in the U.S. back to Roark, ending an expansion south of the border that had taken resources and focus away from its home market. Since then, the chain has grown its Canadian store network considerably, and currently has 833 locations across the country, more than 70 per cent of them owned by franchisees.
In June, 2021, Pet Valu completed its $316-million initial public offering on the Toronto Stock Exchange.
Mr. Maltsbarger, 50, said the decision to retire came after a conversation last month in which he and his wife decided, as empty nesters, that they wanted to spend more time together. “I’ve traveled over 150 nights a year for the past 12 years, as a part of different combinations of roles that I’ve been in, and it’s just time for us to be together,” he said. He added that he felt ready to step away because of the strength of the business and of the leadership of Mr. Ramier, 57.
“What you should expect is that I stay focused on those things that have gotten us here, both from a strategy perspective and from a commercial perspective, to be able to keep that momentum increasing,” Mr. Ramier said.
He added that the company has begun to see benefits from the sizable investment in its supply-chain transformation and will need to continue to show that. He also believes the company can expand its loyalty program.
Pet Valu plans to continue to open roughly 40 new stores per year, Mr. Ramier said, with the long-term goal of reaching 1,200 locations across Canada.
The retailer faces stiff competition from the likes of Walmart, PetSmart, and Amazon. U.S. online retailer Chewy has also begun expanding in the Canadian market, beginning with a foothold in Southern Ontario.
On Tuesday, Pet Valu reported its net income grew to $21.8-million or 31 cents a share in the second quarter ended June 28, compared with $17.8-million or 25 cents a share in the same quarter last year. Revenue grew by 5.8 per cent, to $280.6-million. Same-store sales – an important metric that tracks sales growth not tied to new store openings – were up 2.6 per cent.
The company raised its forecasts and now expects revenue growth of 8 to 10 per cent this year, up from previous guidance of 7 to 9 per cent. It also raised expectations for growth in adjusted earnings before interest, taxes, depreciation and amortization to 4 to 6 per cent, compared to a previous forecast of 3 to 5 per cent.
Pet Valu’s share price rose by nearly 8 per cent in trading on Tuesday following the news.