A customer walks out of a Petco store in Clark, New Jersey.
Ron Antonelli | Bloomberg | Getty Images
Petco CEO Ron Coughlin said Wednesday that the specialty retailer has a key advantage in an uncertain environment: Americans are spending on pets, even when their budgets are tightening.
Speaking at an investor day in New York, he said the pet category was “resistant to economic downturns, resistant to inflation.”
Also, he said, more people have adopted pets during the pandemic as they moved into bigger homes with yards and spent more time working from home. He compared the momentum to a baby boom, saying the need for food, veterinary care and more will survive the global health crisis.
Petco wants to grab a bigger share of the growing market. He estimates the pet industry generated $72 billion in demand last year and said that will grow 7% by 2025 – with double-digit growth in high-end pet care. company. Competitors including Chewy and Walmart have also stepped up investment in the pet industry by launching new services ranging from virtual vet visits to pet insurance.
To stand out in a crowded field, Petco has beefed up its private label offerings, expanded veterinary care and other pet services, and wooed customers willing to splurge on everything from trendy clothes to fresh, organic food. as they treat dogs, cats, hamsters and others. pets as family members.
It had nearly 200 full-service veterinary hospitals at the end of the fiscal year and plans to increase that number to 900, chief operating officer Mike Nuzzo said Wednesday. It also encourages customers to get pet supplies and services at its stores through a subscription service called Vital Care, which offers unlimited veterinary exams and discounts on food and grooming, for $19.99. per month.
Thursday’s investor day marked Petco’s first since returning to the public market in early 2021. Shares of the brick-and-mortar retailer have risen about 7% since then.
Its shares fell about 1.6% on Thursday morning, amid a broader market slowdown.
Petco reiterated its earlier guidance for the year ahead at Investor Day. The company said it expects between 97 cents and $1.00 of adjusted earnings per share on net income of $6.15 billion to $6.25 billion.
That’s up from Petco’s $5.81 billion in net sales in the prior year. This growth is roughly in line with Wall Street expectations. Analysts expect 99 cents of adjusted earnings per share on revenue of $6.2 billion, according to Refinitiv.
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