Petco (WOOF) Reports 1.7% Decrease in Q1 Revenue

Petco Health + Wellness Company, Inc. released its first quarter 2024 financial results, showing a 1.7% decrease in net revenue compared to the previous year, with net revenue totaling $1.5 billion. Comparable sales declined 1.2% year over year but increased 4.1% on a two-year basis. The GAAP net loss for the quarter was $46.5 million, or $(0.17) per share, a significant increase from the GAAP net loss of $1.9 million, or $(0.01) per share, in the prior year.

Adjusted net income saw a notable decrease, amounting to $(11.8) million, or $(0.04) per share, compared to $14.9 million, or $0.06 per share, in the prior year. Adjusted EBITDA also decreased to $75.6 million from $111.0 million in the prior year. Operating cash flow decreased to $(8.4) million from $37.7 million, and free cash flow also dropped to $(41.1) million from $(24.4) million in the prior year.

The company mentioned that its consumables business was up 0.1% versus the prior year, while services and other business witnessed a 4.2% increase. However, the supplies and companion animal business experienced a significant decline of 6.8% versus the prior year.

Looking ahead, Petco provided guidance for the second quarter of 2024, expecting net revenue of approximately $1.525 billion, adjusted EBITDA of around $80 million, and adjusted EPS of approximately $(0.02). For the fiscal year 2024, the company anticipates net interest expense of around $145 million and capital expenditures of approximately $140 million.

The company's interim CEO, Mike Mohan, expressed confidence in the brand's underlying value proposition and emphasized the commitment to reposition the business for sustainable and profitable growth. The management will host an earnings conference call on May 22, 2024, to discuss the financial results.

Petco Health + Wellness Company, Inc., founded in 1965, operates over 1,500 pet care centers across the U.S., Mexico, and Puerto Rico. It offers a wide range of pet wellness products, services, and solutions, including merchandise, companion animals, grooming, training, on-site veterinary hospitals, and mobile veterinary clinics. Following these announcements, the company's shares moved 17.3%, and are now trading at a price of $2.87. If you want to know more, read the company's complete 8-K report here.

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