On September 10, 2024, Petco Health and Wellness Co Inc (WOOF, Financial) released its 8-K filing for the second quarter of 2024. Petco Health and Wellness Co Inc is a pet health and wellness company focused on improving the lives of pets, pet parents, and its partners with approximately 1,423 pet care centers offering pet care products such as puppy food, treats, nutrition, and supplies through retail outlets and online platforms. The company generates revenue from the sale of products and services such as dog and cat food, supplies, and companion animals, among others.
Performance Overview
In Q2 2024, Petco Health and Wellness Co Inc (WOOF, Financial) reported net revenue of $1.52 billion, a slight decrease of 0.5% year-over-year. This figure fell short of the analyst estimate of $1.508.62 billion. The company's GAAP net loss widened to $24.8 million, or $(0.09) per share, compared to a GAAP net loss of $14.6 million, or $(0.05) per share, in the prior year. This also missed the analyst estimate of $(0.05) per share.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Revenue | $1.52 billion | $1.53 billion | -0.5% |
| GAAP Net Loss | $(24.8) million | $(14.6) million | 70% |
| Adjusted EBITDA | $83.5 million | $112.6 million | -25.8% |
| Operating Cash Flow | $69.4 million | $96.6 million | -28.2% |
| Free Cash Flow | $42.0 million | $44.6 million | -5.8% |
Challenges and Achievements
Petco Health and Wellness Co Inc (WOOF, Financial) faced a challenging quarter with a slight decline in net revenue and a significant increase in GAAP net loss. The company's consumables business saw a 1.5% increase, and services and other business grew by 3.1%. However, these gains were offset by a 4.7% decline in the supplies and companion animal business.
"Our second quarter results demonstrate the ongoing work of our teams to strengthen our retail fundamentals and accelerate the path to improved profitability," said Joel Anderson, Petco’s Chief Executive Officer. "I could not be more excited to lead Petco at this pivotal time. Looking ahead, I see tremendous opportunities for us to significantly improve our operating and financial performance and better leverage Petco’s strengths to capture greater share, deliver sustained profitability, and create value for shareholders."
Income Statement Highlights
Petco Health and Wellness Co Inc (WOOF, Financial) reported a gross profit of $580.7 million, down 2% from the previous year. Selling, general, and administrative expenses increased by 2% to $578.3 million, leading to an operating income of $2.5 million, a significant drop from $24.0 million in the prior year.
Balance Sheet and Cash Flow
As of August 3, 2024, Petco Health and Wellness Co Inc (WOOF, Financial) had total assets of $5.28 billion, slightly down from $5.36 billion as of February 3, 2024. The company's cash and cash equivalents stood at $127.6 million. Operating cash flow for the quarter was $69.4 million, down from $96.6 million in the prior year, while free cash flow was $42.0 million, compared to $44.6 million in the previous year.
Outlook
For Fiscal Q3 2024, Petco Health and Wellness Co Inc (WOOF, Financial) expects net revenue of approximately $1.5 billion, adjusted EBITDA between $76 million and $80 million, and adjusted EPS between $(0.03) and $(0.04). The company reaffirmed its full-year guidance for net interest expense and capital expenditures.
For more detailed financial information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Petco Health and Wellness Co Inc for further details.
