Petco’s net revenue declines despite positive performance of vet and grooming services

Petco’s net revenues declined 1.7% to $1.52 billion (€1.4B) in the 3 months to 4 May 2024. During the same period last year, the American pet retailer posted $1.56 billion (€1.43B) in revenue. 

While the consumables and services business increased by 0.1% and 4.2%, respectively, the firm’s supplies and companion animal business dropped 6.8% against the same period in 2023. 

Consumables were supported by fresh frozen revenue (+11%), while vet (+10%) and the business’ strength in its vet hospitals, mobile clinics and grooming services boosted this positive trend. 

Comparable sales also declined 1.2% year-over-year (YoY) but increased by 4.1% compared to 2022.

The adjusted net income declined by 20% to $11.8 million (€10.8M) in the last 3 months. Gross profits fell 4% YoY to $578,660 (€534,884) from $604,482 (€558,752).

A renewed focus

Petco’s interim CEO Mike Mohan suggests a “renewed focus” to overcome the negative trend seen in the last quarter. 

“I’m confident that a renewed focus on retail fundamentals and effective delivery of cost transformation will restore profitability and amplify the competitive advantages of our differentiated approach within the pet category.”

Petco forecasts net revenue of $1.52 billion (€1.4B) in the following quarter. For FY 2024, the American pet retailer expects its net interest expense to be approximately $145 million (€133.7M) and capital expenditures of around $140 million (€129.1M).