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Petco Health and Wellness Company, Inc. WOOF delivered fourth-quarter fiscal 2024 results, where the top line met the Zacks Consensus Estimate and the bottom line lagged the same. This fully integrated health and wellness company of pets registered year-over-year declines in net sales and earnings.
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WOOF’s Quarterly Performance: Key Insights
The Zacks Rank #3 (Hold) company posted break-even earnings per share in the fourth quarter of fiscal 2024, down from adjusted earnings of 2 cents in the year-ago quarter. Also, the metric lagged the Zacks Consensus Estimate of adjusted earnings of 2 cents.
Net sales of $1,552.1 billion dipped 7.3% year over year. This includes the negative impacts of the absence of the 53rd week in fiscal 2023. Comparable sales (comps) increased 0.5% year over year. The Zacks Consensus Estimate for comps growth was pegged at 0.9% in the quarter under review.
Petco Health and Wellness Company, Inc. Price, Consensus and EPS Surprise
Petco Health and Wellness Company, Inc. price-consensus-eps-surprise-chart | Petco Health and Wellness Company, Inc. Quote
Insight Into Petco's Margins & Expenses
Gross profit decreased 2.8% year over year to $589.3 million. We note that the gross margin increased 180 basis points (bps) to 38% from the prior-year period.
Selling, general and administrative expenses decreased 5.7% to $571.8 million. As a percentage of net sales, selling, general and administrative expenses deleveraged 60 bps to 36.8% in the fourth quarter of fiscal 2024.
Adjusted EBITDA came in at $96.1 million compared with $105.3 million in the year-ago period. We note that the adjusted EBITDA margin contracted 10 bps to 6.2% in the fiscal fourth quarter.
WOOF’s Financial Snapshot: Cash, Debt & Equity Overview
Petco ended the quarter with cash and cash equivalents of $165.8 million, and a total stockholders’ equity of $1.11 billion. As of Feb 1, 2025, the operating cash flow was $177.7 million, down from $215.7 million in the prior year. The free cash flow totaled $49.7 million at the end of the fiscal fourth quarter.
WOOF Stock Past Three-Month Performance
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Petco’s FY25 Outlook
For fiscal 2025, net sales are expected to decline year over year in the low-single-digit percentage. Adjusted EBITDA is projected between $375 million and $390 million. Capital expenditure is expected between $130 million and $140 million. The company also expects 20-30 net real estate closures during the year.
For the first quarter of fiscal 2025, net sales are projected to decline year over year in the low-single-digit percentage. Adjusted EBITDA is expected between $82 million and $83 million.
This pet wellness retailer’s shares have lost 36.3% in the past three months compared with the industry’s 9.7% decline.