SAN DIEGO - Petco Health and Wellness Company, Inc. (NASDAQ:WOOF), a leading health and wellness company, today reported a significant revenue beat for its fourth quarter of 2023, with net revenue reaching $1.7 billion, a 6.1% increase compared to the same quarter last year.
Following the earnings release, Petco's stock price rose by 5.4%.
This figure surpassed analyst expectations, which had forecasted revenue of $1.63 billion. The company's adjusted earnings per share (EPS) for the quarter was reported at $0.02, falling short of the analyst estimate of $0.04.
Despite a year-over-year decline in comparable sales of 0.9%, Petco's consumables business saw an 8.8% increase, and its services and other business jumped by 17.4%. However, these gains were partially offset by a 1.4% decrease in the supplies and companion animal business. The GAAP net loss for the quarter was $22.6 million, or -$0.08 per share, a stark contrast to the GAAP net income of $32.7 million, or $0.12 per share, reported in the previous year.
Looking ahead, Petco provided guidance for the first quarter of 2025, projecting an adjusted EPS of approximately -$0.06, which is below the consensus estimate of -$0.02. The company also anticipates Q1 2025 revenue to be around $1.5 billion, which falls short of the $1.55 billion consensus estimate.
Petco's CEO expressed cautious optimism, stating, "While we navigate through a period of economic uncertainty, we are pleased with our ability to drive revenue growth and maintain our position as a complete partner in pet health and wellness."
InvestingPro Insights
Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) has shown resilience with its recent revenue beat, but InvestingPro data and tips suggest that investors should be mindful of some underlying metrics and analyst sentiments. The company's market cap stands at a modest $687.33 million, reflecting the challenges it faces in a competitive industry.
One of the InvestingPro Tips indicates that 8 analysts have revised their earnings downwards for the upcoming period, signaling caution about the company's near-term profitability. This aligns with the company's guidance for Q1 2025, which projects an adjusted EPS below consensus estimates. Additionally, Petco is expected to see a drop in net income this year, emphasizing the importance of strategic cost management mentioned by the CEO.
From a valuation standpoint, Petco is trading at a negative P/E ratio of -0.56, suggesting that it has been incurring losses. The adjusted P/E ratio for the last twelve months as of Q3 2024 is -2.79, further underscoring the company's current lack of profitability.
Investors should also note the stock's performance, which has seen a significant decline over the past year, with a -73.31% return. This might be a point of concern or potential opportunity, depending on the investor's perspective and risk appetite.
For those interested in a deeper analysis, InvestingPro offers additional insights and tips for Petco. Currently, there are 9 more InvestingPro Tips available that could provide a more comprehensive understanding of the stock's potential. To explore these further and make more informed investment decisions, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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