Why Petco Stock Popped Today

Core Insights - Petco's turnaround strategy is showing significant progress, leading to a notable increase in stock price by over 14% following the announcement of improved profitability targets [1][4] Financial Performance - Petco's net sales for the fiscal third quarter decreased by 3.1% year over year, totaling $1.5 billion [2] - The company's gross margin improved by 75 basis points to 38.9%, and operating income surged over sevenfold to $29.2 million due to reduced selling, general, and administrative expenses [3] - On an adjusted basis, Petco's EBITDA rose by 21% to $98.6 million [5] Strategic Initiatives - The company has closed underperforming stores and eliminated unprofitable product lines to enhance profit margins [2] - Management has raised the midpoint of its 2025 adjusted EBITDA guidance by $6 million, now projected between $395 million and $397 million, indicating confidence in sustainable growth [6]