Shares of pet retail giant Petco Health and Wellness Company Inc (NASDAQ:WOOF) are 16.4% higher out of the gate, last seen trading at $3.45, after a SEC filing revealed CEO Joel Anderson purchased nearly 1.6 million shares across two sessions -- a $4.7 million investment that signals strong conviction from the top. The move suggests leadership sees deep value in the beaten-down pet retailer at current levels.That vote of confidence comes at a critical time. Despite a 31.5% post-earnings bull gap last week, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended February 1, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-39878 Petco Health and Wellness Company, Inc. (Exact name of Registrant as specified in its Charter) i Securities registered pursuant ...

Petco Health and Wellness Company, Inc. (NASDAQ: WOOF ) reported the company’s fiscal Q4 earnings on the 26 th of March. The pet care center operator reported results nearly in line with expectations, but with increasingI am an avid investor with a major focus on small cap companies with experience in investing in US, Canadian, and European markets. My investment philosophy to generating great returns on the stock market revolves around identifying mispriced securities by understanding the drivers behind a ...

Petco Health and Wellness Company, Inc. (WOOF) delivered fourth-quarter fiscal 2024 results, where the top line met the Zacks Consensus Estimate and the bottom line lagged the same. This fully integrated health and wellness company of pets registered year-over-year declines in net sales and earnings.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.WOOF’s Quarterly Performance: Key InsightsThe Zacks Rank #3 (Hold) company posted break-even earnings per share in the fourth quarter of fis ...

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PETCO FOURTH QUARTER AND FULL YEAR 2024 EARNINGS CALL March 26, 2025 SAFE HARBOR AND NON-GAAP MEASURES This Presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other s ...

Financial Data and Key Metrics Changes - In Q4 2024, the company reported revenue of $1.55 billion, aligning with prior outlook, and adjusted EBITDA of $96.1 million, exceeding expectations [13][44] - Gross profit decreased by approximately 3% to $589 million, primarily due to the loss of the fifty-third week in 2024, while gross margin increased by 180 basis points to 38% [43][44] - Total SG&A expenses were $571.9 million, or 36.8% of net sales, an increase of about 60 basis points year-over-year [44] Business Line Data and Key Metrics Changes - The services segment is identified as the fastest-growing area within the pet category, with the company holding an established leadership position [11] - The company is focusing on optimizing existing vet hospitals to drive services growth and improve margins with minimal capital investment [39] Market Data and Key Metrics Changes - The pet category is projected to reach $200 billion in the next five years, driven by the ongoing humanization of pets [11] - The company closed 25 net locations in 2024 and anticipates closing an additional 20 to 30 locations in 2025 [49][122] Company Strategy and Development Direction - The company is implementing a phased approach to restore profitability, focusing on improving the operating model, enhancing retail fundamentals, and optimizing product assortment [14][20] - The leadership team is committed to driving gross margin improvement and leveraging SG&A to enhance the economic model [41][42] - Future growth initiatives will include enhancing omnichannel capabilities and investing in services opportunities [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to return to long-term profitable growth, emphasizing the importance of operational improvements and cost control [32][52] - The outlook for 2025 anticipates overall net sales to decline low single digits compared to the previous year, with adjusted EBITDA expected between $375 and $390 million [48][49] Other Important Information - The company aims to achieve a debt-to-EBITDA leverage ratio below two times, focusing on profitability improvement [45] - Management is closely monitoring potential tariff impacts, particularly on inventory purchases from China, Canada, and Mexico, which represent only about 5% of total merchandise costs [46][47] Q&A Session Summary Question: What infrastructure investments are needed for phase three? - Management indicated that no significant infrastructure investments are required, focusing instead on improving EBITDA through disciplined operations [59][60] Question: What are the low-hanging fruit for EBITDA improvement? - Management highlighted the importance of gross margin expansion and leveraging SG&A as key areas for improvement [67][70] Question: How does the company plan to manage SG&A amid declining sales? - Management emphasized that SG&A leverage is about efficiency and effectiveness, ensuring customer needs are met without compromising service [86][87] Question: What is the company's approach to pricing and promotions? - Management stated that they are focused on rational pricing strategies and avoiding excessive promotional stacking to enhance profitability [151][153] Question: How does the company view the competitive landscape and market share? - Management acknowledged the need to sacrifice some sales for improved profitability but expressed confidence in regaining market share through operational improvements [80][84]

Company Performance - Petco Health & Wellness reported break-even quarterly earnings per share, missing the Zacks Consensus Estimate of $0.02, and compared to earnings of $0.02 per share a year ago, resulting in an earnings surprise of -100% [1] - The company posted revenues of $1.55 billion for the quarter ended January 2025, missing the Zacks Consensus Estimate by 0.02%, and down from $1.67 billion year-over-year [2] - Over the last four quarters, Petco has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Petco shares have lost approximately 35.2% since the beginning of the year, while the S&P 500 has declined by -1.8% [3] - The current consensus EPS estimate for the coming quarter is $0.01 on $1.55 billion in revenues, and $0.07 on $6.28 billion in revenues for the current fiscal year [7] Industry Outlook - The Zacks Industry Rank indicates that the Retail - Miscellaneous sector is currently in the bottom 46% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

Financial Performance - Q4 2024 net revenue was $1.6 billion, a decrease of 7.3% year over year, impacted by the loss of the 53rd week in 2023[4] - Full year 2024 net revenue totaled $6.1 billion, down 2.2% year over year, with comparable sales increasing by 0.3%[4] - Adjusted EBITDA for Q4 2024 was $96.1 million, compared to $105.3 million in the previous year, while full year adjusted EBITDA was $336.5 million, down from $401.1 million[4] - The company expects low single-digit percentage decline in net revenue for FY 2025, with adjusted EBITDA guidance of $375 million to $390 million[5] - Q1 2025 guidance indicates a low single-digit decline in net revenue, with adjusted EBITDA projected between $82 million and $83 million[6] - Gross profit for Q4 2024 was $589.3 million, a decrease of 2.8% year over year, while full year gross profit was $2.3 billion, down 1.3%[4] - GAAP net loss for Q4 2024 was $13.8 million, an improvement from a loss of $22.6 million in the previous year, while the full year net loss was $101.8 million compared to $1.3 billion in the prior year[4] Cash Flow and Assets - Operating cash flow for FY 2024 was $177.7 million, down from $215.7 million in the previous year, while free cash flow improved to $49.7 million from a negative $9.9 million[4] - Cash and cash equivalents increased from $136,649 million at the beginning of the period to $181,665 million at the end of the period, reflecting a net increase of $45,016 million[19] - Free Cash Flow improved to $49,683 million for the 52 weeks ended February 1, 2025, compared to a negative Free Cash Flow of $9,879 million for the 53 weeks ended February 3, 2024[26] - Total assets decreased from $5,363,152 million in 2024 to $5,194,430 million in 2025, a decline of approximately 3.15%[16] Liabilities and Equity - Total current liabilities rose from $1,113,143 million in 2024 to $1,139,163 million in 2025, an increase of approximately 2.33%[16] - The total stockholders' equity decreased from $1,184,429 million in 2024 to $1,113,630 million in 2025, a decline of approximately 5.98%[16] Inventory and Capital Expenditures - Merchandise inventories decreased from $684,502 million in 2024 to $653,329 million in 2025, a reduction of about 4.56%[16] - Cash paid for fixed assets decreased from $225,598 million in 2024 to $127,990 million in 2025, a reduction of about 43.3%[19] Profitability Metrics - The company reported a net margin of -1.7% for the 52 weeks ended February 1, 2025, compared to -20.5% for the previous year[23] - Net loss for the 52 weeks ended February 1, 2025, was $101,816 million, compared to a net loss of $1,280,210 million for the 53 weeks ended February 3, 2024[19] - Adjusted EBITDA for the 52 weeks ended February 1, 2025, was $336,526 million, down from $401,103 million for the 53 weeks ended February 3, 2024, representing a decrease of about 16.1%[23] Quarterly Performance - Net income for the 13 weeks ended February 1, 2025, was $10,224,000, a decrease of 17% compared to $12,311,000 for the same period in 2024[28] - EBITDA for the 13 weeks ended February 1, 2025, was $22,466,000, down 4.5% from $23,518,000 in the prior year[28] - The company reported a 50% share of EBITDA amounting to $11,233,000 for the 13 weeks ended February 1, 2025, compared to $11,759,000 in the same period last year[28] Expenses and Taxation - Depreciation expenses for the 13 weeks ended February 1, 2025, were $6,536,000, compared to $7,070,000 in the same period last year, reflecting a decrease of 7.5%[28] - Interest expense, net, decreased to $516,000 for the 13 weeks ended February 1, 2025, from $1,039,000 in the prior year, a reduction of 50%[28] - Income tax expense increased to $5,014,000 for the 13 weeks ended February 1, 2025, from $2,541,000 in the same period last year, representing a significant increase of 97%[28] Strategic Initiatives - The company plans approximately 20-30 net closures of real estate locations in FY 2025[5] - Petco's leadership team is focused on achieving double-digit adjusted EBITDA growth in 2025, aiming for sustainable profitable growth[4] - Acquisition and divestiture-related integration costs were incurred, reflecting the company's ongoing strategic transactions and business integration efforts[29] Foreign Currency Impact - The company incurred foreign currency losses of $176,000 for the 13 weeks ended February 1, 2025, compared to $557,000 in the same period in 2024[28]

Core Insights - Petco Health and Wellness Company, Inc. reported a net revenue of $1.6 billion for Q4 2024, a decrease of 7.3% year over year, impacted by the loss of the 53rd week in 2023 [8] - The company aims for double-digit adjusted EBITDA growth in 2025, with guidance for adjusted EBITDA between $375 million and $390 million [2][3] - Petco's full year 2024 adjusted EBITDA was $336.5 million, down from $401.1 million in the previous year [8] Q4 2024 Overview - The CEO highlighted progress in returning Petco to retail operating excellence, with comparable sales increasing by 0.5% year over year [2] - Gross profit for Q4 2024 was $589.3 million, a decrease of 2.8% from $606.3 million in the previous year [8] - The GAAP net loss for Q4 2024 was $13.8 million, an improvement from a net loss of $22.6 million in the prior year [8] Full Year 2024 Overview - Total net revenue for the full year 2024 was $6.1 billion, down 2.2% year over year [8] - The company reported a GAAP net loss of $101.8 million for the full year, significantly improved from a net loss of $1.3 billion the previous year, which included a $1.2 billion non-cash goodwill impairment charge [8] - Operating cash flow for the full year was $177.7 million, compared to $215.7 million in the previous year [8] 2025 Guidance - For FY 2025, Petco expects net revenue to decline in low single digits year over year [2] - The company anticipates net interest expense of approximately $130 million and capital expenditures between $130 million and $140 million [2] - The guidance includes expectations for around 20-30 net closures of real estate locations [2] First Quarter 2025 Guidance - For Q1 2025, Petco projects net revenue to decrease in low single digits year over year, with adjusted EBITDA expected to be between $82 million and $83 million [3]