SAN DIEGO — New leadership at Petco Health and Wellness Company, Inc. has brought a positive outlook to the company’s financial future despite flat growth over the past year and second quarter. The company shared its second quarter financial performance for 2024 on Sept. 10.
The pet retailer announced the appointment of Joel D. Anderson to the role of chief executive officer, effective July 29, after Ron Coughlin stepped down from the role in March. R. Michael Mohan served as interim CEO until Anderson was brought on board.
“I could not be more excited to lead Petco during this pivotal time for our company,” Anderson said during the Sept. 10 earnings call. “On behalf of the board, I’d like to thank Mike Mohan for stepping in as interim CEO. His passion for our business, his focus on strengthening our retail fundamentals and his work to realign our cost structure has set us on a path for improved profitability — we will continue to build on this going forward.”
In the second quarter of 2024, Petco delivered net revenue of $1.52 billion, down 0.5% over the prior year. Comparable sales increased 0.3% year-over-year and increased 3.5% on a two-year basis. The company also reported an adjusted EBITDA of $83.5 million compared to $112.6 million in the prior year.
Despite the flat financials results, Anderson expressed excitement about his new role and the future of the company.
“There are three things about Petco that excite me,” he said during the earnings call. “No. 1 — our integrated store and digital footprint, which if positioned effectively can create an incredible customer experience brought to life across multiple channels. No. 2 — delivering a differentiated offering that can bring and make Petco a destination for pets and pet parents. No. 3 — our breadth of services offered including our vet platform. This is our biggest competitive distinction from online only and mass players and has the potential to power our business as a significant long term growth driver.”
Brian LaRose, chief financial officer for Petco, shared the projection for the third quarter of an expected revenue of approximately $1.5 billion and adjusted EBITDA of between $76 million and $80 million.
“The entire Petco team is focused on controlling what we can do to deliver structural improvements to our underlining financials and work toward clear and achievable targets on the path to sustained and profitable growth,” LaRose said. “The first half of this year has brought meaningful change in the way we operate our business and combined with Joel’s energy and expertise I’m confident we have set the right foundation for sustained progress for the full year and beyond.”
Anderson shared the company’s four key initiatives:
- Returning to retail fundamentals
- Meeting and exceeding customer expectations
- Capturing market share through improved basket
- Delivering meaningful improvement to the bottom line through a disciplined approach to costs.
“Our second quarter results demonstrate the ongoing work of our teams to strengthen our retail fundamentals and accelerate the path to improved profitability,” Anderson said. “I could not be more excited to lead Petco at this pivotal time. Looking ahead, I see tremendous opportunities for us to significantly improve our operating and financial performance and better leverage Petco’s strengths to capture greater share, deliver sustained profitability, and create value for shareholders.”
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