Petco Reports Strong Q2 Earnings Yet Faces Market Challenges
Petco Q2 Earnings: Beat on Profit, Cautious on Outlook
Petco Health and Wellness Company, Inc. (NASDAQ: WOOF) posted its second-quarter results with a clear headline: profitability outpaced expectations. Adjusted earnings landed in positive territory and topped Wall Street’s view. Even so, the stock slipped a bit in after-hours trading, a sign that investors are weighing the mix of a solid quarter against a more guarded near-term outlook.
Stock Reaction and Core Results
Right after the release, WOOF shares eased 0.65%, suggesting a wait-and-see mood. On the numbers, Petco delivered adjusted earnings per share of $0.06. Analysts had been braced for a $0.02 loss, so that swing into the black was notable. Revenue came in at $1.52 billion, exactly in line with expectations—no surprise there, but steady nonetheless.
Guidance for Q3: Tempered Expectations
Looking to the third quarter, management guided earnings per share to a range of -$0.03 to -$0.04. The midpoint trails the analysts’ average prediction of -$0.03 by a hair, signaling a careful stance as the company manages through the current environment. Petco also set third-quarter revenue guidance at about $1.5 billion, just below the $1.51 billion consensus. It’s a modest gap, yet enough to hint at some near-term pressures.
What’s Driving Sales: The Mix Matters
Comparable sales in Q2 edged up 0.3% year over year, and they were up 3.5% on a two-year basis. The gains weren’t uniform, though. Consumables—think food and treats—rose 1.5% year over year. Services and other revenue grew 3.1%, reflecting steady demand for in-store offerings. The drag came from supplies and companion animal, where sales fell 4.7%. That decline more than offset part of the growth elsewhere, underscoring how changes in category mix can move the overall result.
Leadership’s Take
CEO Joel Anderson put it plainly: “Our second quarter results demonstrate the ongoing work of our teams to strengthen our retail fundamentals and accelerate the path to improved profitability.” The emphasis is on blocking and tackling—retail basics, execution, and expense discipline—as the company works to turn better operations into better margins.
Full-Year Spending and Financing Plans
Despite near-term caution, Petco kept its full-year capital expenditure outlook intact at approximately $140 million. The company also expects about $145 million in net interest expense for the year. Holding those targets steady points to a consistent investment plan and a clear view of financing costs, even as quarterly trends ebb and flow.
Frequently Asked Questions
What were Petco's Q2 earnings for 2024?
Adjusted EPS was $0.06 in the second quarter of 2024, beating expectations that called for a $0.02 loss. In short, profits came in stronger than the Street anticipated.
How did Petco's stock react to the earnings report?
The shares dipped 0.65% in after-hours trading following the release. A beat on earnings and in-line revenue met a cautious outlook, and the stock reflected that mixed reading.
What is Petco’s revenue guidance for Q3?
Petco guided Q3 revenue to roughly $1.5 billion. It also expects earnings per share between -$0.03 and -$0.04, slightly below the -$0.03 consensus.
How did comparable sales perform for Petco?
Comparable sales rose 0.3% year over year in Q2 and were up 3.5% over two years. Growth in consumables and services helped, while supplies and companion animal weighed on the total.
What are Petco's financial outlooks for the full year?
Petco maintained about $140 million for full-year capital expenditures and anticipates roughly $145 million in net interest expense. The steady targets suggest a disciplined plan for spending and financing.
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