The company raised its full-year guidance for a key profitability metric.
Like a favorite cat, dog, or turtle, Petco Health and Wellness (WOOF 23.53%) stock was receiving a lot of love and cuddles from investors on Friday. That’s because they were awfully happy about the specialty retailer‘s second-quarter earnings, published just after market close the previous day. They sent the stock up almost 24% in price in reaction to the news.
A tasty treat for investors
This happened despite the fact that Petco’s net sales for the period actually declined on a year-over-year basis. They fell in excess of 2% to $1.5 billion, but that was entirely expected by management. It was also a slightly higher figure than that predicted by analysts, who collectively were modeling $1.49 billion.
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That dip was on the back of a 1.4% fall in comparable sales for the quarter.
Petco’s bottom line looked far better, as the company flipped to a generally accepted accounting principles (GAAP) net profit of almost $14 million, or $0.05 per share, from the nearly $25 million loss it suffered in the same quarter of 2024. Analysts had far more modest expectations, as the average estimate for profitability was only $0.01 per share.
In the earnings release, Petco quoted CEO Joel Anderson as saying that the first half of this year “established a solid foundation for our transformation as we continued to strengthen our economic model and improve retail operating fundamentals.”
A raise in EBITDA guidance
It was a beat-and-raise quarter for Petco, as it raised its guidance for non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) for the full year. For the entirety of 2025, it’s now forecasting this will range from $385 million to $395 million, on net sales down in the low-single-digit percentages from the 2024 tally.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.