Petco’s Q3 Revenue Tops $1. 5B – San Diego Business Journal
Petco Health and Wellness Co. Inc., the San Diego-based pet supply retailer and services supplier, is giving both its customers and investors something to bark about.
Late last month (Nov. 30), the company posted net income of $19. 9 million on net revenue of $1. 5 billion for its third quarter, which ended Oct. 29. Petco also generated $109. 4 mil of operating cash flow in Q3, an increase of 27% year over year.
Petco (NASDAQ: WOOF) said its upbeat third quarter results reflect continued business and customer growth and operational execution – as well as further successful investment in the company’s strategic development initiatives.
On Wall Street, investors cheered WOOF’s Q3 results, sending the particular stock higher by more than 16% the day after the report was released.
Driving Operational Excellence
Petco says that as part of its broad-based strength, the company maintains focus on driving operational excellence while investing for long-term, profitable growth. The company during the quarter also announced collaborations with Nationwide Insurance and Homes and Villas by Marriott Bonvoy.
The company also has a new partnership with Stella & Chewy’s that will bring the brand’s raw and natural food products to Petco pet care centers, petco. com and the Petco app starting in January 2023.
Petco attributed its strong third-quarter performance to the resilient nature of the pet category in the market, which has had the ability to remain strong through economic ups and downs.
In announcing the latest results in November, Petco Chairman and CEO Ron Coughlin also credited “the competitive advantages inherent in our model” and the “incredible execution” of Petco team members.
“Pet parents continue to prioritize the health and wellness of their pets with Petco, from our high-quality food, vet care and services, in order to membership programs like Vital Care which act as drivers of value and loyalty, ” Coughlin said. “We stay committed to redefining the industry through our differentiated offering and innovative partnerships, demonstrating typically the attractiveness of our one-of-a-kind ecosystem and powered by the most passionate team in retail. ”
Active Customer Growth
The company said that comparable sales grew 4. 1% year over year and 19. 6% on a two-year basis, resulting in its 16th consecutive quarter of comparable product sales growth. It also reported 15 consecutive quarters of active customer growth.
Management hosted an earnings conference call on Nov. 30 to discuss the company’s financial results. In the call, Petco reported other Q3 highlights, including:
Continued top-line strength, with net revenue growth of 4%, comparable sales growth of 4% year-over-year and 20% on a two-year basis;
Total services growth of 14% year-over-year and 38% on a two-year basis driven by ongoing momentum in veterinarian visits and grooming;
Digital sales up 10% year-over-year and 42% on a two-year basis.
The report shared with investors also noted a 56% growth in recurring customer revenue, 400, 000 members in its Vital Care program and about 1 . 7 , 000, 000 grooming and Nutrition Perks members. Vital Care subscription members are among Petco’s highest spending customers.
The report reaffirmed full year 2022 guidance for net revenue of $5. 975 billion to $6. 05 billion.
Other related company highlights reported during the third quarter include:
Through the independent nonprofit Petco Love (formerly known as the Petco Foundation), the organization supports thousands of animal welfare groups across the country, and reports that the group helped save more than 98, 000 pet lives and reunited a lot more than 13, 000 pets with their families via “Petco Love Lost” during the quarter. Petco Love also “delivered against our 1 million free vaccine commitment in partnership with Merck, and recommitted to another 1 million, ” the report stated.
Through in-store adoption events, Petco has helped find homes for more than 6. 6 thousand animals. In 2023 Petco plans to launch this Yummy Memorial Pet Cancer Fund to help support Petco partners unable to afford costly treatment for pets with cancer. In May 2019, Petco stopped selling food and treats containing artificial colors, flavors and preservatives for dogs and cats.
The company currently operates more than 1, 500 pet care centers across the U. S., Mexico plus Puerto Rico, offering merchandise, companion animals, grooming, training, on-site veterinary hospitals in addition to mobile veterinary clinics.
Founded in 1965, today Petco describes itself as “a health and wellness company focused on improving the lives associated with pets, pet parents and even our own Petco partners. ”
Petco Health and Wellness Co. Inc.
CEO: Ron Coughlin
HEADQUARTERS: Rancho Bernardo, San Diego
BUSINESS: Full service business supporting dog care and wellness
REVENUE: $5. 8 billion (2021)
STOCK: WOOF (NASDAQ)
EMPLOYEES: 27, 000
WEBSITE: Petco. com
SOCIAL IMPACT: Petco Partners celebrated Latin Heritage Month, Disability Awareness Month, together with Halloween across its support centers, distribution centers and additionally pet care centers.
NOTABLE: Company to launch Yummy Memorial Pet Malignancy Fund to help support Petco partners unable to afford expensive treatment for pets along with cancer.