Q2 2024 Petco Health and Wellness Company Inc Earnings Call Transcript
Key Points
- Petco Health and Wellness Co Inc (WOOF) reported net revenue of $1.52 billion for Q2 2024, with comparable sales up 30 basis points year over year.
- Services and other revenue grew by 3%, with services specifically up 10%, driven by strength in vet hospitals, mobile clinics, and grooming.
- The company has a strong liquidity position with $655 million, including $128 million in cash and cash equivalents and $528 million available on its revolving credit facility.
- Petco Health and Wellness Co Inc (WOOF) is focused on improving profitability through a disciplined approach to costs, including merchandising, operational efficiencies, and marketing recalibration.
- The company is committed to delivering meaningful near-term improvements to cash flow and enhanced EBITDA performance, with a target of $150 million in run-rate savings by the end of 2025.
- Net revenue was down 50 basis points year over year, indicating a slight decline in overall sales.
- Gross profit decreased by 210 basis points from the prior year, with gross margin down 60 basis points, driven by softness in discretionary categories.
- SG&A as a percentage of revenue increased by 80 basis points year over year, primarily due to planned one-time investments in store labor.
- Adjusted EBITDA for Q2 2024 was $83.5 million, with an adjusted EBITDA margin rate of 5.5%, reflecting a decline from the prior year.
- Adjusted EPS was negative $0.02 compared to $0.06 per share in the prior year, indicating a decline in profitability.
Good day, and welcome to the Petco second-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. Please go ahead.
Good afternoon, and thank you for joining Petco's second-quarter 2024 earnings conference call. In addition, on today's call, we'll refer to certain non-GAAP financial measures. Reconciliations of those measures can be found in our earnings release, presentation, and SEC filings. And finally, during the Q&A portion of today's call, we ask that you please keep to one question and one follow-up.
With that, let me turn it over to Joel.
Good afternoon, everyone, and thank you for joining us today. I could not be more excited to lead Petco to this pivotal time for the company and
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