Shoppers wait in a line outside a Petco pet store in Hollywood, California, on April 23, 2020 during the novel coronavirus pandemic.
Robyn Beck | AFP | Getty Images
Shares of Petco Health and Wellness Company fell more than 3% despite first-quarter earnings that beat Wall Street’s expectations and an increased forecast.
Here’s what the company reported for the fiscal first quarter ended May 1, according to Refinitiv consensus estimates:
- Earnings per share: 17 cents adjusted vs. 9 cents expected
- Revenue: $1.4 billion vs. $1.27 billion expected
In the quarter, Petco reported net income of $7.56 million, or 3 cents per share, compared with a loss of $31.2 million, or 15 cents a share, a year ago.
Excluding items, the company earned 17 cents per share. Analysts polled by Refinitiv had expected earnings of 9 cents per share.
Total revenue grew by 27% to $1.41 billion from $1.11 billion a year ago, also outpacing estimates of $1.27 billion.
Petco’s same-store sales rose 28% from a year ago.
The retailer expects revenue this year to be between $5.48 billion and $5.58 billion, up from a prior forecast of $5.25 billion to $5.35 billion.
Its outlook for earnings was lifted to a range of 73 cents to 76 cents per share, from a previous forecast of 63 cents to 66 cents per share.
This is the company’s second earnings report after going public again in January.
The pet retailer experienced growth during the pandemic thanks to 3.3 million pet adoptions in 2020, Petco’s CEO Ron Coughlin said in a “Squawk on the Street” interview in March. The company anticipates it will continue to benefit from this growth in the coming years as consumers take care of their newly adopted pets.
The shift in people moving from cities to the suburbs also could help fuel growth as the company expects its 1,500 stores will give it a competitive advantage over online retailers like Chewy.
Petco is also developing its online business. Its digital sales rose 90% in the fourth quarter.
To meet demand at the beginning of the pandemic, the company tripled the number of ship-from-store locations and partnered with DoorDash in December to offer same-day deliveries.
This story is developing and will be updated.
Correction: Petco beat Wall Street’s earnings expectations.