Petco reports flat quarter amid rising losses

Petco reported $1.52 billion (€1.37B) in net revenue for the second quarter of 2024, ending August 3, marking a 0.5% decline from $1.53 billion (€1.38B) during the same period last year.

Gross profits also fell 2%, dropping to $580 million (€525.4M) from $593 million (€537.1M) in Q2 2023.

Additionally, the retailer’s net losses widened significantly from $14.6 million (€13.2M) in Q2 2023 to $24.8 million (€22.4M) this quarter.

Adjusted net income decreased to $5.9 million (€5.3M), compared to $16.3 million (€14.7M) during the same period last year.

Looking ahead, Petco plans to strengthen its “operating and financial performance and create value for shareholders.”

Revenue breakdown

Petco’s consumables segment grew by 1.5% year-on-year (YoY) to $745 million (€674.7M), largely driven by a 17% increase in sales of fresh frozen products.

Similarly, services and other businesses saw a 3.1% YoY increase, contributing $260 million (€235.4M) to total revenue. Notable growth was observed in Vetco Mobile and Vet Hospitals, each achieving around a 20% YoY increase.

However, these gains were offset by declines in other areas. The supplies and companion animal category experienced a 4.7% decline, falling to $519 million (€470M) from $544.5 million (€493.1M) last year. The decrease is attributed to soft discretionary spending.

Financial forecast

For Q3 2024, Petco expects approximately $1.5 billion (€1.35B) in revenue, slightly up from the $1.49 billion (€1.35B) reported in Q3 2023.

The company anticipates positive free cash flow for the full year and forecasts net interest expenses of around $145 million (€131.3M) and capital expenditures of approximately $140 million (€126.7M).