Group 1: Pet Services Industry - The pet services sector has seen a remarkable recruitment growth of 72.2%, leading all service industries in job demand [2] - The demand for pet grooming and veterinary positions is particularly high, with pet grooming job postings accounting for 46.1% and growing by 73.9%, while veterinary positions represent 17.8% with a growth rate of 171.1% [2] - New first-tier cities dominate the pet services recruitment landscape, accounting for 34.4% of job postings, followed by second-tier cities at 24.9% and first-tier cities at 16.0% [2] Group 2: Elderly Care Industry - The elderly care sector is undergoing a transformation, with increased educational and experience requirements for job candidates; the proportion of positions requiring a bachelor's degree has risen from 15.3% to 24.7% [3] - The average monthly salary for the elderly care industry has increased by 10% compared to the same period in 2024 [3] Group 3: Gaming Industry - The gaming industry has experienced a significant increase in demand for operational and testing roles, with growth rates of 327.3% and 347.2% respectively, driven by advancements in 5G technology and heightened player expectations [4] - Game operation positions account for 34.5% of job postings in the gaming sector, highlighting their critical role in the gaming business chain [4] Group 4: Overall Trends in Modern Service Industry - The modern service industry is exhibiting rapid growth, with concentrated job demand across various sectors, indicating a favorable environment for job seekers to capitalize on emerging industry opportunities [5]

Core Insights - The pet industry in China is experiencing significant growth, with the market size increasing from 97.8 billion yuan in 2015 to 592.8 billion yuan in 2023, and projected to reach 811.4 billion yuan by 2025, reflecting a compound annual growth rate of 25.4% [1] - The number of pets in China is expected to reach 430 million by 2024, with cat owners numbering 40.88 million, indicating an average of two cats per owner, and this figure is projected to grow to 570 million by 2029 [1] - The growth of the pet economy is driven by emotional factors, policy support, and technological innovation, which have encouraged companies to invest in research and development and improve product quality [1] Market Dynamics - The consumer base for pets is becoming younger and more educated, with over 60% of pet owners being born in the 1990s and 2000s, who prioritize the quality of life and personalized needs for their pets [2] - High-income, well-educated individuals tend to spend more on their pets, reflecting a trend of late marriage and childbearing, leading to increased emotional value and high-quality living for pets [2] - Online channels have become the primary sales avenue for pet food, although offline channels remain important for providing better shopping experiences and additional services [2] Product Trends - There is a shift towards high-quality and refined pet food, with trends such as "human-pet similarity" gaining traction, leading to increased demand for premium products like baked and fresh food [3] - The integration of technology in pet health management is on the rise, with over 70% of pet hospitals in first-tier cities adopting AI-assisted diagnostic tools [3] - The aging population and emerging markets are creating new growth opportunities, as more elderly individuals view pets as family members, leading to diverse consumption needs, particularly in food, health, and smart devices [3]

Financial Data and Key Metrics Changes - For Q1 2025, comparable sales decreased by 1.3% and net sales declined by 2.3%, attributed to 25 net store closures in 2024 and an additional five closures in Q1, resulting in a total store count of 1,393 [24] - Gross margin rate increased by over 30 basis points to 38.2%, with improvements across both product and service segments [25] - Operating profit rose to $16.4 million, an increase of $33 million compared to the previous year, while adjusted EBITDA increased by $13.8 million to $89.4 million, representing 6% of sales [27][28] - Free cash flow was negative $44 million, primarily due to incentive payouts during the quarter [28] Business Line Data and Key Metrics Changes - Services, the fastest-growing segment, continues to show positive growth, with productivity improvements in both veterinary and grooming operations supporting gross margin expansion [16] - The company is optimizing product assortment to align more closely with consumer demand, focusing on higher productivity brands and SKUs [10] - The cat category product reset was completed in May, and the dog category reset was initiated, aimed at increasing shelf capacity and improving customer experience [11][12] Market Data and Key Metrics Changes - The company noted stable pet adoption trends, indicating that it is not relying on external factors for financial improvements in 2025 [34] - The overall pet market remains resilient, with consumable categories driving business due to their needs-based nature [60] Company Strategy and Development Direction - The company is focused on a multi-phased approach to improve its operating model and restore retail fundamentals, with Phase I completed and Phase II underway [5][6] - A new membership program is being designed to enhance customer loyalty, expected to launch in 2026 [20] - The company aims to improve its marketing message to be more solutions-oriented and to enhance customer engagement through data-driven strategies [21][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and the team's ability to unlock Petco's full potential, despite navigating a challenging trade environment [22][23] - The leadership team is aligned on the goal of returning Petco to an industry-leading position, emphasizing the importance of improving retail fundamentals and financial performance [22][23] Other Important Information - The company reiterated its full-year outlook for 2025, expecting net sales to decline in the low single digits and adjusted EBITDA to be between $375 million and $390 million [30] - The company is actively managing tariff exposure, with owned brand inventory purchases from impacted countries representing about 7% of total merchandise costs [29][30] Q&A Session Summary Question: What are you seeing in pet adoption trends and how do these trends impact your full year outlook? - Management noted stable pet adoption trends and emphasized that 2025 is a self-help story for Petco, not reliant on external factors for financial improvements [34][35] Question: How are you ensuring guardrails to take permanent costs out while keeping the customer experience intact? - Management highlighted a change in mindset towards cost management, focusing on leveraging SG&A rather than just cutting costs [36][39] Question: Can you provide insights on the top line journey and the repositioning efforts? - Management indicated that while external observers may see limited progress, internally, they are identifying growth levers and implementing strategies for improvement [42][44] Question: Can you discuss gross margin performance and expectations for the full year? - Management expressed satisfaction with the gross margin performance in Q1 and reiterated the goal of expanding gross margins for the year [51][52] Question: How is the mix of revenue indicating consumer behavior? - Management noted that services continue to lead the business, driven by needs-based categories, while consumables showed expected softness [60][67] Question: What is the outlook on inflation and pricing? - Management stated that while they are monitoring inflation, they have not seen significant spikes and are focused on balancing customer needs with business health [83][84] Question: Have you identified price gaps and how are you addressing them? - Management confirmed that they are analyzing pricing at the SKU level and have identified opportunities to adjust prices to improve competitiveness [86][87]