Financial Performance - Net sales increased from $1.49 billion to $1.51 billion, representing a period-over-period increase of 1.2%[93] - Operating income improved to $4.0 million, compared to an operating loss of $1,232.1 million in the prior year, primarily due to goodwill impairment[93] - Adjusted EBITDA rose from $72.2 million to $81.2 million[93] - Comparable sales change was 1.8% for the thirteen weeks ended November 2, 2024, compared to 0.0% for the same period last year[96] - Total net sales for the thirty-nine weeks ended November 2, 2024, were $4.56 billion, slightly down from $4.58 billion in the prior year[94] - Gross profit margin improved to 38.1% for the thirteen weeks ended November 2, 2024, compared to 36.8% in the prior year[96] - Net sales increased by $17.3 million, or 1.2%, to $1.51 billion for the thirteen weeks ended November 2, 2024, compared to $1.49 billion for the same period last year[19] - Gross profit rose by $25.8 million, or 4.7%, to $575.8 million for the thirteen weeks ended November 2, 2024, with a gross profit rate of 38.1%[99] - The gross profit decreased by $12.3 million, or 0.7%, to $1,735.1 million for the thirty-nine weeks ended November 2, 2024[99] - Adjusted EBITDA for the thirty-nine weeks ended November 2, 2024, was $81.2 million, compared to $72.2 million for the same period in 2023, reflecting a 14% increase[111] - Net sales for the thirty-nine weeks ended November 2, 2024, were $1.51 billion, slightly up from $1.49 billion in the prior year, indicating a growth of approximately 1%[111] Loss and Expenses - Net loss attributable to Class A and B-1 common stockholders decreased to $16.7 million from $1,241.1 million in the prior year[93] - SG&A expenses increased by $12.2 million, or 2.2%, to $571.8 million for the thirteen weeks ended November 2, 2024, representing 37.8% of net sales[100] - Free Cash Flow for the thirty-nine weeks ended November 2, 2024, was $(9.4) million, compared to $(7.8) million for the same period in 2023, showing a decline in cash generation[114] - The company reported a net loss attributable to Class A and B-1 common stockholders of $16.7 million for the thirty-nine weeks ended November 2, 2024, compared to a net loss of $1.24 billion in the prior year[111] Cash Flow and Liquidity - As of November 2, 2024, the company's liquidity was $644.3 million, which includes cash and cash equivalents of $116.7 million and $527.6 million available on the ABL Revolving Credit Facility[116] - Net cash provided by operating activities decreased to $81.7 million for the thirty-nine weeks ended November 2, 2024, down from $168.7 million in the same period of 2023, primarily due to increased cash paid for inventory[118] - Net cash used in investing activities was $89.5 million for the thirty-nine weeks ended November 2, 2024, a decrease from $156.1 million in the prior year, reflecting reduced capital expenditures[121] Debt and Interest - The company amended its ABL Revolving Credit Facility in March 2024, increasing total availability from $500 million to $581 million[125] - Interest on the ABL Revolving Credit Facility is now based on either the base rate with a 1% floor or Term SOFR with a 0% floor, plus an applicable margin[126] - The company repaid $75 million in principal on the First Lien Term Loan during the thirty-nine weeks ended October 28, 2023, using existing cash on hand[126] - As of November 2, 2024, the company had $1,595.3 million outstanding under the First Lien Term Loan, with no amounts outstanding under the ABL Revolving Credit Facility[140] - An increase of 100 basis points in variable rates on the First Lien Term Loan and ABL Revolving Credit Facility would increase annual cash interest by approximately $16.2 million[140] Market Conditions and Challenges - The company continues to face macroeconomic challenges, including rising interest rates and inflationary pressures, impacting discretionary item sales[86] - The decrease in supplies and companion animals sales was driven by a softening in discretionary spending due to the current macroeconomic environment[19] Strategic Initiatives - The company aims to enhance customer retention and increase basket size to improve comparable sales[89] - Service-related sales increased by 8.6% and 9.7% for the thirteen and thirty-nine week periods ended November 2, 2024, respectively[98] Accounting and Valuation - The company recorded a pre-tax goodwill impairment charge of $1.22 billion in the thirteen weeks ended October 28, 2023[101] - The company considers the Petco trade name as an indefinite-lived intangible asset, performing annual impairment tests during the fourth quarter[134] - Significant assumptions in determining the fair value of the trade name include prospective financial information, growth rates, and discount rates[135] - The company does not enter into forward currency contracts to hedge foreign currency exposure, with a hypothetical 10% change in exchange rates not expected to materially affect operating results[143] - Cash and cash equivalents as of November 2, 2024, were maintained at major financial institutions, likely exceeding insured limits, with minimal credit risk[142] - The company has the option to perform qualitative assessments for goodwill impairment testing, which may bypass quantitative assessments if fair value exceeds carrying value[132] - Management estimates of cash flow projections are used in quantitative assessments for goodwill impairment, which are subject to uncertainty[133] - There have been no material changes to critical accounting policies and estimates compared to those described in the 2023 Form 10-K[135]

Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $1.51 billion, up 1% year-over-year, with comparable sales increasing by 2% year-over-year [30] - Gross margin expanded by 130 basis points to 38.1%, driven by product cost management and improvements in services margin [7][32] - Adjusted EBITDA was $81.2 million, with an adjusted EBITDA margin of 5.4%, up almost 60 basis points year-over-year [33] - Free cash flow was negative $10 million, showing a meaningful improvement year-over-year [35] Business Line Data and Key Metrics Changes - Consumables revenue grew by 3%, while supplies in companion animals declined by 3%, though this was an improvement of roughly 200 basis points sequentially [30] - Services revenue increased by 9%, driven by strength in vet hospitals and mobile clinics [18][31] - The gross profit was $576 million, up 5% from the prior year [32] Market Data and Key Metrics Changes - The overall market for pet supplies remains flat, with Petco focusing on self-help strategies to improve its business without relying on market growth [54] - Petco Mexico continues to be a market leader in pet specialty in Mexico, driving long-term profitable growth [37] Company Strategy and Development Direction - The company is focusing on three critical areas: merchandising, customer service, and operational efficiency [11] - Initiatives include optimizing product assortments, improving customer service standards, and enhancing supply chain efficiencies [20][21] - The hiring of key executives aims to strengthen leadership and drive revenue growth [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory and the potential for long-term sustainable profitable growth [26][27] - The company is encouraged by structural improvements and expects a solid finish to 2024, building momentum into 2025 [39] Other Important Information - The company is implementing stronger pricing strategies and has established processes for promotional assessments [14] - Management is actively engaging with vendors to improve relationships and optimize product offerings [12][98] Q&A Session Summary Question: Target same-store sales figure for leveraging cost base - Management emphasized the focus on permanent cost reductions and indicated that specific targets would be discussed in March [44][46] Question: Insights on supplies and companion animals segment - Management noted a sequential improvement in discretionary spending and highlighted the importance of innovation and customer engagement [50][52] Question: Pricing impact in the quarter - Management stated that the overall pricing environment has been rational, with no significant negative impacts [58] Question: Services margin improvement drivers - The improvement was attributed to cost actions and the maturation of vet hospitals, along with strength in the mobile services business [61][62] Question: Opportunities for savings and reinvestment - Management indicated that current cost reductions are permanent and not intended for reinvestment at this stage [67][68] Question: Holiday performance outlook - Management expressed optimism about the start of the quarter and noted sequential improvement from Q3 [71] Question: Regaining market share in 2025 - Management is optimistic about the company's potential for growth and the enthusiasm of associates in driving the turnaround [73] Question: Efficiency enhancements in vet hospitals - Management highlighted progress in profitability and staffing improvements in vet hospitals, with continued growth expected [76][80] Question: Glide path of gross margin improvement - Management refrained from providing specific guidance but expressed encouragement regarding ongoing improvements [84] Question: Contextualizing the decline in services in companion animals - Management reiterated that they are actively taking actions to improve performance in this category regardless of market conditions [88][89]

Company Performance - Petco Health & Wellness reported a quarterly loss of $0.02 per share, which was better than the Zacks Consensus Estimate of a loss of $0.03, and an improvement from a loss of $0.05 per share a year ago, indicating an earnings surprise of 33.33% [1] - The company posted revenues of $1.51 billion for the quarter ended October 2024, surpassing the Zacks Consensus Estimate by 0.92% and showing an increase from $1.49 billion in the same quarter last year [2] - Over the last four quarters, Petco has exceeded consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Petco shares have increased approximately 59.8% since the beginning of the year, significantly outperforming the S&P 500's gain of 27.6% [4] - The current consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $1.58 billion, while for the current fiscal year, the estimate is -$0.06 on revenues of $6.13 billion [8] Industry Outlook - The Zacks Industry Rank indicates that the Retail - Miscellaneous sector, to which Petco belongs, is currently in the bottom 30% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Petco's stock performance [6]

Exhibit 99.1 Contacts: Investor Relations investorrelations@petco.com Media Relations Lisa.stark@petco.com FOR IMMEDIATE RELEASE: December 5, 2024 Petco Health + Wellness Company, Inc. Reports Third Quarter 2024 Earnings Results Q3 2024 Overview • Net revenue of $1.51 billion increased 1.2 percent year over year and comparable sales increased 1.8 percent year over year • Gross profit of $575.8 million increased 4.7 percent year over year, compared to $550.0 million in the prior year • GAAP net loss of $16.7 ...

Q3 2024 Overview Net revenue of $1.51 billion increased 1.2 percent year over year and comparable sales increased 1.8 percent year over year Gross profit of $575.8 million increased 4.7 percent year over year, compared to $550.0 million in the prior year GAAP net loss of $16.7 million, or $(0.06) per share, compared to GAAP net loss of $1.2 billion, or $(4.63) per share in the prior year that included a $1.2 billion non-cash goodwill impairment charge Adjusted Net Income1 of $(6.5) million, or $(0.02) per ...

SAN DIEGO, Nov. 13, 2024 /PRNewswire/ -- Petco Health and Wellness Company, Inc. (Nasdaq: WOOF) today announced Joe Venezia will join the company as Chief Revenue Officer, effective Nov. 17, reporting to Joel Anderson, Chief Executive Officer. In this newly created role, Venezia will be responsible for driving revenue and developing integrated strategies to improve the customer experience. Joe will oversee critical areas that contribute to Petco's growth, including pet care centers, pet and veterinary servi ...

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics ...

SAN DIEGO, Nov. 6, 2024 /PRNewswire/ -- On December 5, 2024, at approximately 4:00 p.m. Eastern, Petco Health and Wellness Company, Inc. (Nasdaq: WOOF), a complete partner in pet health and wellness, will release its third quarter 2024 earnings results.Additionally, Petco executives will host a conference call at approximately 4:30 p.m. Eastern to review the company's financial and operating performance.The call will be webcast live and the earnings release and presentation will be available on the company' ...

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing is characterized by a preference for fast-moving stocks rather than undervalued ones [1] - Investors face challenges in determining the right entry points, as stocks may lose momentum if their valuations exceed future growth potential [1] Group 2: Petco Health & Wellness (WOOF) Analysis - Petco Health & Wellness (WOOF) has shown a price increase of 6.8% over the past four weeks, indicating growing investor interest [2] - Over the past 12 weeks, WOOF's stock has gained 43%, demonstrating its ability to deliver positive returns over a longer timeframe [2] - WOOF has a beta of 1.92, suggesting it moves 92% higher than the market in either direction, indicating fast-paced momentum [3] Group 3: Valuation and Earnings Estimates - WOOF has a Momentum Score of B, suggesting it is an opportune time to invest in the stock [3] - The stock has a Zacks Rank 2 (Buy), supported by an upward trend in earnings estimate revisions, which attracts more investor interest [3] - WOOF is trading at a Price-to-Sales ratio of 0.24, indicating it is relatively cheap, as investors pay only 24 cents for each dollar of sales [3] Group 4: Additional Investment Opportunities - Besides WOOF, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [4] - The Zacks Premium Screens offer over 45 strategically created options to help identify potential winning stocks [4]

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuati ...