Petco Health and Wellness pany(WOOF) - 2024 Q4 - Annual Results

Revenue Growth and Performance - Q4 2023 net revenue increased by 6.1% year over year to $1.7 billion, driven by an 8.8% growth in consumables and a 17.4% growth in services and other business, partially offset by a 1.4% decline in supplies and companion animal business[4][5] - Full year 2023 net revenue increased by 3.6% year over year to $6.3 billion, with consumables up 7.1% and services and other business up 21.9%, partially offset by a 6.8% decline in supplies and companion animal business[7] - Net sales for the 14 weeks ended February 3, 2024, increased by 6% to $1,674,476 thousand compared to $1,577,959 thousand in the same period last year[18] - Net sales for the 14 weeks ended February 3, 2024 were $1.674 billion, an increase from $1.578 billion for the 13 weeks ended January 28, 2023[26] Profitability and Losses - Q4 2023 GAAP net loss was $22.6 million, or $(0.08) per share, compared to a GAAP net income of $32.7 million, or $0.12 per share, in the prior year[5] - Full year 2023 GAAP net loss was $1.3 billion, or $(4.78) per share, including a $1.2 billion goodwill impairment, compared to a GAAP net income of $90.8 million, or $0.34 per share, in the prior year[5][7] - Net loss for the 14 weeks ended February 3, 2024, was $22,575 thousand compared to a net income of $32,732 thousand in the same period last year[18] - Net loss attributable to Class A and B-1 common stockholders for the 14 weeks ended February 3, 2024 was $22.575 million, compared to a net income of $32.732 million for the 13 weeks ended January 28, 2023[26] - Net margin for the 14 weeks ended February 3, 2024 was negative 1.3%, compared to positive 2.1% for the 13 weeks ended January 28, 2023[26] Adjusted EBITDA and Margins - Q4 2023 Adjusted EBITDA was $105.3 million, down from $157.9 million in the prior year, while full year 2023 Adjusted EBITDA was $401.1 million, down from $530.8 million in the prior year[5][7] - Adjusted EBITDA for the 14 weeks ended February 3, 2024 was $105.340 million, a decrease from $157.889 million for the 13 weeks ended January 28, 2023[26] - Adjusted EBITDA margin for the 14 weeks ended February 3, 2024 was 6.3%, down from 10.0% for the 13 weeks ended January 28, 2023[26] - Adjusted EBITDA is used by the company to provide a meaningful comparison of current period performance with the prior period and to assess core operating performance[25] Goodwill Impairment - Goodwill impairment for the 53 weeks ended February 3, 2024, was $1,222,524 thousand, which was not present in the same period last year[18] - Goodwill impairment for the 53 weeks ended February 3, 2024 was $1.222 billion, which significantly impacted the net loss for the period[26] Cash Flow and Financial Position - Net cash provided by operating activities for the 53 weeks ended February 3, 2024, was $215,719 thousand, a decrease from $346,003 thousand in the same period last year[22] - Cash and cash equivalents as of February 3, 2024, decreased to $125,428 thousand from $201,901 thousand as of January 28, 2023[20] - Total liabilities as of February 3, 2024, decreased to $4,178,723 thousand from $4,231,352 thousand as of January 28, 2023[20] - Free Cash Flow for the 14 weeks ended February 3, 2024 was negative $2.043 million, compared to positive $70.594 million for the 13 weeks ended January 28, 2023[31] Guidance and Future Expectations - Q1 2024 guidance includes net revenue of approximately $1.5 billion, Adjusted EBITDA of approximately $70 million, and Adjusted EPS of approximately $(0.06)[8] - Full year 2024 guidance includes net interest expense of approximately $145 million and capital expenditures of approximately $140 million[9] - The company anticipates a 26% tax rate and a weighted average diluted share count of 272 million for fiscal 2024[10] Business Operations and Impact - Petco operates over 1,500 pet care centers across the U.S., Mexico, and Puerto Rico, offering merchandise, companion animals, grooming, training, and veterinary services[12] - Petco has helped find homes for nearly 7 million animals through in-store adoption events in partnership with Petco Love[12] - Mexico Joint Venture EBITDA for the 14 weeks ended February 3, 2024 was $11.759 million, up from $9.265 million for the 13 weeks ended January 28, 2023[32] Gross Profit and Operating Income - Gross profit for the 14 weeks ended February 3, 2024, decreased by 3% to $606,348 thousand from $627,279 thousand in the same period last year[18] - Operating income for the 14 weeks ended February 3, 2024, was $166 thousand, a significant decrease from $77,560 thousand in the same period last year[18] Adjusted Net Income and EPS - Adjusted Net Income for the 14 weeks ended February 3, 2024 was $6.080 million, compared to $52.846 million for the 13 weeks ended January 28, 2023[28] - Adjusted EPS for the 14 weeks ended February 3, 2024 was $0.02, down from $0.20 for the 13 weeks ended January 28, 2023[28] Total Assets - Total assets as of February 3, 2024, decreased to $5,363,152 thousand from $6,612,829 thousand as of January 28, 2023[20]