Retail stocks often move on sentiment more than fundamentals. And in this case, the disconnect is hard to ignore. A top Canadian retailer, Pet Valu Holdings (TSX: PET), while outperforming the broader market in 2025, is still trading nearly 30% below its all-time high posted nearly two years ago. Meanwhile, the company continues to post solid earnings, expand its store network, and grow brand loyalty. These are some of the key reasons that make this TSX-listed retail stock look really attractive to buy now and hold for the long term.
Letâs take a closer look at why this retail stock might deserve a permanent place in a long-term portfolio.
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Pet Valu stock
If you donât know it already, Pet Valu is one of the top Canadian specialty retailers of pet food and supplies, with over 800 corporate-owned and franchised stores spread across the country. From premium dog treats to aquariums and holistic cat food, it offers just about everything a pet parent could ask for, both in-store and online.
While PET stock has risen over 19% year to date, itâs still down almost 28% from its all-time high. Currently, it trades at $30.11 per share with a market cap of $2.1 billion. The stock also rewards investors with quarterly dividends, which currently yield around 1.6% annually.
Besides investorsâ trust in its robust business model, the companyâs recent return to positive same-store sales growth and strengthening store network and digital presence could be some of the main reasons for driving this retail stock higher of late.
Earnings are holding up better than you might expect
Earlier this week, on May 6, Pet Valu released the financial results for the first quarter of 2025, which showed that its business is improving in the areas that matter most. The Markham-headquartered retail firmâs quarterly revenue rose 7% YoY (year over year) to $279.1 million. While same-store sales growth wasnât explosive at 1.4%, the key is that it turned positive again due to higher spending per transaction.
On the profitability side, Pet Valu saw its adjusted quarterly EBITDA (earnings before interest, taxes, depreciation, and amortization) tick up by 3.8% YoY to $58.7 million. Despite distribution and occupancy cost pressures, the company still managed to keep its adjusted EBITDA margin at a healthy 21%.
Notably, higher lease payments related to store growth led to a dip in its free cash flow in the latest quarter. But considering the retailerâs focus on aggressive expansion, thatâs not necessarily a bad thing. It just means the company is investing in its future.
Why this retail stock still deserves a spot in a long-term portfolio
Interestingly, Pet Valu is planning to open around 40 new stores in 2025 alone and has a clear roadmap to expand its footprint to over 1,200 locations in the long run. And unlike many other retailers, itâs doing this while remaining profitable.
Its strong brand loyalty also gives it an edge. With over three million active loyalty members, about 85% of its system-wide sales are coming from repeat customers. That level of customer loyalty isnât easy to achieve, and itâs a strong sign of its strengthening long-term growth outlook. Given these positive factors, Pet Valu could just be one of those rare retail stocks you can confidently buy and hold onto for years.
