Q3 2024 Petco Health and Wellness Company Inc Earnings Call Transcript
Key Points
- Petco Health and Wellness Co Inc (WOOF) reported revenue of $1.51 billion, up 1% year-over-year, driven by growth in consumables and services.
- Gross margin expanded by 130 basis points to 38.1%, attributed to improvements in product cost management and services margin.
- Services revenue increased by 9%, with strong performance in vet hospitals and Vetco mobile clinics.
- The company has implemented new processes for product resets and pricing strategies to remain competitive and drive financial outcomes.
- Petco Health and Wellness Co Inc (WOOF) is focusing on driving efficiencies across the business, including renegotiating vendor contracts and improving supply chain operations.
- Supplies and companion animal categories remained soft, with a 3% decline, although there was a sequential improvement.
- Adjusted EPS was negative $0.02, compared to negative $0.05 in the prior year, indicating ongoing challenges in achieving profitability.
- SG&A expenses increased by 2% year-over-year, driven by planned increases in store labor costs.
- Free cash flow was negative $10 million, although it showed improvement year-over-year.
- The company is in a 'self-help' mode, focusing on internal improvements rather than relying on market growth to drive performance.
Good afternoon and welcome to the Petco third quarter, 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Lisa Stark, Senior Director of Communications. Please go ahead.
Good afternoon and thank you for joining Petco's third quarter, 2024 earnings conference call. In addition to the earnings release, there is a presentation available to download on our website at ir.petco.com, summarizing our results. On the call with me today are Joel Anderson, Petco's Chief Executive Officer; and Brian Larose, Petco's Chief Financial Officer.
Before they begin, I'd like to remind everyone that on this call, we will make certain forward-looking statements which are subject to a number of risks and uncertainties that could cause actual results to differ materially from such statements. These risks and uncertainties include those set out in our earnings materials and SEC filings. In
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