Petco Health and Wellness Company (NASDAQ:WOOF) tracked lower in early trading on Thursday after the company posted a mixed Q2 earnings report and set disappointing guidance.
The pet retailer generated sales growth of 3.4% to $1.53B during the quarter, led by solid gains from the company’s consumables business (+6.8% year-over-year) and services/other business (+30.6%), which was partially offset by a decline with the supplies/companion animal business (-9.4%). Comparable sales were up 3.2% for the quarter vs. +2.3% consensus.
CEO Ron Coughlin said with discretionary spending continuing to be pressured, the company is taking numerous strategic actions to strengthen its business, including initiatives to unlock a targeted $150M in cost savings and productivity enhancements by the end of fiscal 2025.
Adjusted EBITDA was $112.6M in Q2 vs. to $133.5M a year ago. Adjusted net income decreased to $16.3M or $0.06 per share. Free cash flow decreased to $44.6M from -$27.7M a year ago.
Looking ahead, Petco (WOOF) sees full-year revenue of $6.15B to $6.28B vs. $6.29B consensus and adjusted EPS of $0.24 to $0.30 vs. $0.42 consensus and the prior range of $0.40 to $0.48. Capital expenditures of $155M to $225M are anticipated as well.
Shares of Petco Health & Wellness (WOOF) fell 11.31% in premarket action to $5.80 vs. the 52-week trading range of $6.34 to $15.85.
Petco slides after setting profit guidance below expectations
