Q1 2024 Petco Health and Wellness Company Inc Earnings Call Transcript
Key Points
- Petco Health and Wellness Co Inc (WOOF) made meaningful progress against its strategy to reposition the business for sustainable and profitable growth.
- The company restructured its executive leadership team to simplify decision-making and align focus on fewer and clearer priorities.
- Petco Health and Wellness Co Inc (WOOF) is on track to unlock $150 million in cost savings and productivity enhancements by the end of fiscal 2025.
- Services revenue grew by 10%, driven by ongoing strength in vet hospitals, mobile clinics, and grooming services.
- The company expects to be free cash flow positive for fiscal 2024, reflecting improved cost management and capital expenditure reductions.
- Net revenue for the quarter was $1.5 billion, a decrease of 2% year-over-year.
- Comparable sales were down 1%, with discretionary supplies and companion animal businesses experiencing continued softness, down 7% year-over-year.
- Gross profit was $579 million, down $26 million from the prior year, with a gross margin decline of 101 basis points.
- SG&A as a percentage of revenue increased from 37.1% to 38.9% year-over-year, driven by severance expenses, increased depreciation, and a one-time expense related to the disposition of PupBox.
- Adjusted EBITDA was $75.6 million, down 32% with an adjusted EBITDA margin rate of 4.9%, down 219 basis points year-over-year.
Good morning, and welcome to the Petco First Quarter 2024 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Benjamin Thiele-Long, Chief ESG and Chief Communications Officer. Please go ahead.
Good morning, and thank you for joining Petco's First Quarter 2024 Earnings Conference Call. In addition to the earnings release, there is a presentation available to download on our website at ir.petco.com summarizing our results. On the call with me today are Mike Mohan, Petco's Interim Chief Executive Officer; and Brian LaRose, Petco's Chief Financial Officer.
Before they begin, I'd like to remind everyone that on this call, we will make certain forward-looking statements, which are subject to a number of risks and uncertainties that could cause actual results to differ materially from such statements. These risks and uncertainties include those
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