Petco Gains After Q3 Revenue Beat; Inks Partnership With Stella & Chewy's

Petco Gains After Q3 Revenue Beat; Inks Partnership With Stella & Chewy's
  • Petco Health And Wellness Company Inc WOOF reported third-quarter FY22 sales growth of 4% year-on-year to $1.50 billion, beating the consensus of $1.49 billion.
  • Comparable sales grew 4.1% Y/Y and 19.6% on a two-year basis.
  • Gross profit rose 0.5% Y/Y to $597.7 million with a margin of 39.8%.
  • Selling, general and administrative expenses increased 3% to $549.6 million.
  • Operating margin was 3.2%, and operating income for the quarter decreased 22% to $48.1 million.
  • Adjusted EPS was $0.16, in line with the consensus.
  • Adjusted EBITDA decreased 0.7% to $137.5 million with an adjusted EBITDA margin of 9.2%.
  • The company held $148.7 million in cash and equivalents as of October 29, 2022. The company generated $109.4 million of operating cash flow in Q3, up 27% year over year.
  • "Our Q3 results demonstrate the resilience of the pet category through economic cycles, the competitive advantages inherent in our model, and the Petco team's incredible execution," said Petco CEO Ron Coughlin. 
  • In addition, Petco entered a partnership with Stella & Chewy's that will bring the brand's raw and natural food products to Petco pet care centers, and the Petco app in January 2023. 
  • Outlook: Petco Health maintained its FY22 sales outlook of $5.975 billion - $6.05 billion versus the consensus of $6.01 billion.
  • The company lowered FY22 adjusted EPS from $0.77 - $0.81 to $0.75 - $0.79 versus the estimate of $0.77.
  • Price Action: WOOF shares are trading higher by 14.12% at $10.83 in premarket on the last check Wednesday.
  • Photo Via Company

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