Petco Stock Sinks on Earnings Disappointment

Shares of Petco plummeted more than 18% on Wednesday. The stock fell 28% at its intraday low, marking its largest intraday percent decrease on record, based on available data back to January 2021, according to Dow Jones Market Data.

Petco reported net revenue of $1.56 billion for the quarter, rising 5.4% from a year ago, primarily “driven by strength in the company’s consumables business” according to the release. The company did, however, note a slowdown in its supplies and companion animal business. Analysts surveyed by FactSet had forecast sales of $1.499 billion. 

Comparable sales growth for the quarter clocked in at 5.1% from a year prior, soaring past the 1.1% growth analysts had expected. 

The company, however, still maintained its guidance for the fiscal year. Petco expects full-year net revenue between $6.15 billion and $6.275 billion and adjusted per-share earnings between 40 cents and 48 cents. Analysts surveyed by FactSet are calling for full-year revenue of $6.246 billion and earnings of 43 cents a share.

“Like other retail sector peers, we saw a more cautious consumer beginning in the second half of the first quarter, resulting from banking uncertainty and lower tax refunds, which continues to weigh on discretionary,” said Brian LaRose, chief financial officer, on the earnings call Wednesday. He also noted that Petco maintained its current full-year guidance because it wants “to remain prudent in this environment.”

LaRose said he anticipates second-quarter earnings before interest, tax, depreciation and amortization, or Ebitda, to stay flat or rise slightly from the previous quarter. For the second half of the year, he still expects Ebitda to stay steady or climb from a year ago, taking into consideration the yearly ebbs and flows of supplies and companion animals.

Write to Emily Dattilo at [email protected]