Shares of Petco Health and Wellness Company (WOOF -0.73%) were skyrocketing 29.6% higher as of 11:29 a.m. ET on Wednesday. The big gain came after the pet retailer announced its second-quarter results following the market close on Tuesday.
Petco reported net revenue in Q2 of $1.52 billion, down 0.5% year over year. The company posted a net loss based on generally accepted accounting principles (GAAP) of $24.8 million, or $0.09 per share. Its adjusted net loss was $5.9 million, or $0.02 per share, which was in line with the average analysts' estimate.
The company looks for net revenue in the third quarter of 2024 of around $1.5 billion, slightly below the consensus estimate of $1.51 billion. It expects an adjusted loss per share of between $0.03 and $0.04. Analysts project an adjusted loss of $0.03 per share in Q3.
Why is Petco stock skyrocketing?
You might be wondering why Petco stock is skyrocketing after delivering mixed Q2 results and providing Q3 guidance that fell a little short of expectations. The short answer is that investors liked what they heard in the company's earnings call.
New CEO Joel Anderson committed to improving profitability. He told analysts on the conference call that the management team has "put together a great strategy on how to return this company to great fundamentals around EBITDA [earnings before interest, taxes, depreciation, and amortization] performance." Anderson mentioned several components of this strategy, including exercising more discipline in merchandising and improving vendor partnerships.
Is Petco stock a good pick to buy?
Aggressive investors who like turnaround plays could find Petco stock an attractive pick. Anderson brings a strong background to the table with his experience as CEO of Five Below and Walmart's internet business. If he leads the company in executing well on its profitability strategy, the stock should continue its recent momentum.
