A customer exits a Petco store in Clark, New Jersey.
Ron Antonelli | Bloomberg | beautiful pictures
Petco Chief Executive Officer Ron Coughlin on Wednesday said the specialty retailer has a key advantage in an uncertain environment: Americans spend on pets, even as their budgets tighten.
At an investor day in New York City, he said the pet portfolio “is resilient to the recession, to the inflationary.”
Plus, he said, more and more people are adopting pets during the pandemic, as they move into larger homes with yards and spend more time working from home. He compares this dynamic to baby booms, saying the need for food, veterinary care and more will outlast the global health crisis.
Petco wants to capture a larger share of the growing market. It estimates that the pet industry drove demand by $72 billion last year and says it will grow 7% by 2025 — with double-digit growth in premium pet care. Competitors, including Tough and Walmarthas also increased investment in the pet industry by launching new services from virtual vet visit arrive pet insurance.
To stand out in a crowded field, Petco has beefed up its private label offerings, expanded its veterinary and other pet care offerings, and attracted customers willing to shop for everything from clothing Fashion comes to fresh and organic foods as they treat dogs, cats, hamsters and other pets like family members.
It had nearly 200 full-service veterinary hospitals by the end of the fiscal year and plans to grow that number to 900, Chief Executive Officer Mike Nuzzo said Wednesday. It also encourages customers to purchase pet supplies and services from its stores through a subscription service called Vital Care, which offers unlimited vet visits and reduced pet food prices. meals and grooming services, for $19.99 per month.
Thursday’s Investor Day marks the first time Petco has been established since back 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 downturn.
Petco reiterated its previous forecast for next year at the investor day. The company said it expects between 97 cents and $1.00 in adjusted earnings per share on net sales of $6.15 billion to $6.25 billion.
That represents an increase from Petco’s $5.81 billion in net sales in the previous fiscal year. That growth roughly matched Wall Street’s expectations. Analysts expect adjusted earnings per share of 99 cents on revenue of $6.2 billion, according to Refinitiv.
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