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.
