Petco (NASDAQ: WOOF) is currently down 12% year over year, amounting to a total 24% loss since the company went public back in January 2021. The drop isn’t particularly surprising given the 2021 climate in which retailers had to survive; despite pets becoming increasingly popular over lockdown periods. As the pandemic bubble starts to thin out, management is seeking to reassure investors that Petco is not just firmly situated in the pet and wellness market, but that the company has plenty of room to grow; with the vision to accommodate it.
Yesterday, the company announced updated full-year guidance for 2022. Management reaffirmed revenue of $6.15B to $6.25B against a $6.3B consensus. EPS is predicted at $0.97 to $1.00, again slightly missing the consensus of $1.02. Whilst it may appear that Petco is slightly lagging with its FY affirmation; it’s refreshing to see that growing macro concerns shouldn’t affect outlook too much. Just yesterday, popular retailer Nike held back on issuing FY guidance on the basis of global uncertainty.
Ahead of today’s investor day, Petco CEO Ron Coughlin issued a powerful statement, claiming the company is one of the ‘steepest growth trajectories in all of retail’. This could well be true, especially given the multi-level integration that makes Petco the industry powerhouse that it is today. Operating across pet health and wellness products, veterinary and in-person services, digital and physical spaces, Petco’s moat allows for a firm grip on the market.
Coughlin made further reference to scaling current services through providing unparalleled, specialized care services, as well as a further revenue rebuff through the recently launched Vital Care 2.0 membership subscription. Market exclusivity appears to be the main backbone of Petco’s future growth plan, an angle that tends to breed loyal consumers. Reassuring guidance is also welcomed at a time of global economic uncertainty, at a time when retailers are feeling surmounting pressure.
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Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.