Shares of Petco Health and Wellness Company (NASDAQ:WOOF) experienced a significant drop of nearly 14% in early Thursday trading following the company’s downward revision of its full-year profit expectations.
The company has now revised its adjusted earnings per share (EPS) outlook for the entire fiscal year of 2024 to be within the range of 24 cents to 30 cents. This revised forecast reflects a considerable reduction from the previous range, which had been set at 40 cents to 48 cents.
Despite this adjustment in earnings expectations, the net revenue projection for the full year remains relatively stable, with an anticipated range of $6.15 billion to $6.28 billion. This figure, however, slightly falls short of the estimated revenue of $6.31 billion.
Turning to the results for the second quarter, the company reported an adjusted EPS of 6 cents on revenue totaling $1.53 billion. These figures are notably aligned with the consensus estimates, which had predicted earnings of 6 cents on revenue amounting to $1.52 billion.
In terms of comparable sales growth, Petco managed to achieve an impressive +3.2%, surpassing the anticipated growth of 2.3%.
CEO Ron Coughlin commented on the situation, stating, “We continue to focus on execution through an uncertain environment, delivering our 19th consecutive quarter of comp sales growth, with ongoing strength in consumables and services, particularly in vet.”
This announcement of lowered earnings expectations has subsequently resulted in a 14% decline in Petco’s share price, illustrating the impact of the revision on investor sentiment.