Petco Health + Wellness Company, Inc. Reports Fourth Quarter and Full Year 2024 Financial Results
Petco Health and Wellness Company (WOOF) reported its Q4 and full year 2024 financial results, showing mixed performance. Q4 2024 saw net revenue decline 7.3% to $1.6 billion, though comparable sales increased 0.5%. The quarter resulted in a GAAP net loss of $13.8 million, improved from $22.6 million loss last year.
Full year 2024 performance included: net revenue decrease of 2.2% to $6.1 billion, comparable sales growth of 0.3%, and gross profit decline of 1.3% to $2.3 billion. The company reported a GAAP net loss of $101.8 million, compared to $1.3 billion loss last year which included a $1.2 billion goodwill impairment charge. Operating cash flow was $177.7 million with Free Cash Flow of $49.7 million.
CEO Joel Anderson expressed confidence in the company's new leadership team and projected double-digit adjusted EBITDA improvement in 2025.
Petco Health and Wellness Company (WOOF) ha riportato i risultati finanziari del Q4 e dell'intero anno 2024, mostrando una performance mista. Nel Q4 2024, i ricavi netti sono diminuiti del 7,3% a $1,6 miliardi, anche se le vendite comparabili sono aumentate dello 0,5%. Il trimestre ha registrato una perdita netta GAAP di $13,8 milioni, migliorata rispetto alla perdita di $22,6 milioni dell'anno scorso.
Le performance dell'anno intero 2024 hanno incluso: una diminuzione dei ricavi netti del 2,2% a $6,1 miliardi, una crescita delle vendite comparabili dello 0,3% e una diminuzione del profitto lordo dell'1,3% a $2,3 miliardi. L'azienda ha riportato una perdita netta GAAP di $101,8 milioni, rispetto a una perdita di $1,3 miliardi dell'anno scorso, che includeva un addebito di impairment di goodwill di $1,2 miliardi. Il flusso di cassa operativo è stato di $177,7 milioni con un flusso di cassa libero di $49,7 milioni.
Il CEO Joel Anderson ha espresso fiducia nel nuovo team di leadership dell'azienda e ha previsto un miglioramento dell'EBITDA rettificato a doppia cifra nel 2025.
Petco Health and Wellness Company (WOOF) informó sus resultados financieros del Q4 y del año completo 2024, mostrando un rendimiento mixto. En el Q4 2024, los ingresos netos cayeron un 7.3% a $1.6 mil millones, aunque las ventas comparables aumentaron un 0.5%. El trimestre resultó en una pérdida neta GAAP de $13.8 millones, mejorando respecto a la pérdida de $22.6 millones del año pasado.
El rendimiento del año completo 2024 incluyó: una disminución de los ingresos netos del 2.2% a $6.1 mil millones, un crecimiento de las ventas comparables del 0.3% y una disminución del beneficio bruto del 1.3% a $2.3 mil millones. La compañía reportó una pérdida neta GAAP de $101.8 millones, en comparación con una pérdida de $1.3 mil millones el año pasado, que incluía un cargo por deterioro de goodwill de $1.2 mil millones. El flujo de caja operativo fue de $177.7 millones con un flujo de caja libre de $49.7 millones.
El CEO Joel Anderson expresó confianza en el nuevo equipo de liderazgo de la compañía y proyectó una mejora del EBITDA ajustado de dos dígitos en 2025.
펫코 건강 및 웰니스 회사 (WOOF)는 2024년 4분기 및 전체 연도 재무 결과를 보고하며 혼합된 성과를 나타냈습니다. 2024년 4분기에는 순매출이 7.3% 감소하여 16억 달러에 이르렀지만, 비교 가능한 매출은 0.5% 증가했습니다. 이번 분기는 GAAP 기준으로 1,380만 달러의 순손실을 기록했으며, 이는 작년의 2,260만 달러 손실에서 개선된 수치입니다.
2024년 전체 연도 성과는 다음과 같습니다: 순매출이 2.2% 감소하여 61억 달러, 비교 가능한 매출이 0.3% 성장, 총 이익이 1.3% 감소하여 23억 달러에 이르렀습니다. 회사는 GAAP 기준으로 1억 1,800만 달러의 순손실을 보고했으며, 이는 지난해 13억 달러의 손실에 비해 개선된 수치입니다. 작년에는 12억 달러의 goodwill 손상 차감이 포함되었습니다. 운영 현금 흐름은 1억 7,770만 달러이며, 자유 현금 흐름은 4,970만 달러입니다.
CEO 조엘 앤더슨은 회사의 새로운 리더십 팀에 대한 신뢰를 표명하며 2025년에는 조정된 EBITDA가 두 자릿수 개선될 것이라고 예상했습니다.
Petco Health and Wellness Company (WOOF) a annoncé ses résultats financiers pour le 4ème trimestre et l'année entière 2024, affichant des performances mixtes. Au 4ème trimestre 2024, le chiffre d'affaires net a diminué de 7,3 % pour atteindre 1,6 milliard de dollars, bien que les ventes comparables aient augmenté de 0,5 %. Ce trimestre a abouti à une perte nette GAAP de 13,8 millions de dollars, améliorée par rapport à une perte de 22,6 millions de dollars l'année précédente.
Les performances de l'année entière 2024 comprenaient : une diminution du chiffre d'affaires net de 2,2 % à 6,1 milliards de dollars, une croissance des ventes comparables de 0,3 % et une baisse du bénéfice brut de 1,3 % à 2,3 milliards de dollars. L'entreprise a enregistré une perte nette GAAP de 101,8 millions de dollars, contre une perte de 1,3 milliard de dollars l'année précédente, qui comprenait une charge de dépréciation de goodwill de 1,2 milliard de dollars. Le flux de trésorerie d'exploitation était de 177,7 millions de dollars avec un flux de trésorerie libre de 49,7 millions de dollars.
Le PDG Joel Anderson a exprimé sa confiance dans la nouvelle équipe de direction de l'entreprise et a projeté une amélioration de l'EBITDA ajusté à deux chiffres en 2025.
Petco Health and Wellness Company (WOOF) hat seine finanziellen Ergebnisse für das 4. Quartal und das gesamte Jahr 2024 bekannt gegeben, die eine gemischte Leistung zeigen. Im 4. Quartal 2024 sanken die Nettoumsätze um 7,3% auf 1,6 Milliarden Dollar, während die vergleichbaren Verkäufe um 0,5% zunahmen. Das Quartal endete mit einem GAAP-Nettoverlust von 13,8 Millionen Dollar, eine Verbesserung gegenüber dem Verlust von 22,6 Millionen Dollar im Vorjahr.
Die Leistung des gesamten Jahres 2024 umfasste: einen Rückgang der Nettoumsätze um 2,2% auf 6,1 Milliarden Dollar, ein Wachstum der vergleichbaren Verkäufe um 0,3% und einen Rückgang des Bruttogewinns um 1,3% auf 2,3 Milliarden Dollar. Das Unternehmen meldete einen GAAP-Nettoverlust von 101,8 Millionen Dollar, verglichen mit einem Verlust von 1,3 Milliarden Dollar im Vorjahr, der einen goodwill-bezogenen Wertminderungsaufwand von 1,2 Milliarden Dollar beinhaltete. Der operative Cashflow betrug 177,7 Millionen Dollar mit einem freien Cashflow von 49,7 Millionen Dollar.
CEO Joel Anderson äußerte Vertrauen in das neue Führungsteam des Unternehmens und prognostizierte eine Verbesserung des bereinigten EBITDA im zweistelligen Bereich für 2025.
- Comparable sales increased 0.5% in Q4 and 0.3% for full year 2024
- Free Cash Flow improved to $49.7M from -$9.9M last year
- Q4 net loss improved to $13.8M from $22.6M last year
- Projected double-digit adjusted EBITDA growth for 2025
- Q4 net revenue declined 7.3% to $1.6B
- Full year net revenue decreased 2.2% to $6.1B
- Gross profit declined 1.3% to $2.3B for full year
- Operating cash flow decreased to $177.7M from $215.7M
- Adjusted EBITDA declined to $336.5M from $401.1M
Insights
Petco's Q4 and FY2024 results present a mixed financial picture with both concerning trends and signs of potential stabilization. While the 7.3% drop in quarterly revenue and 2.2% annual revenue decline reflect ongoing challenges, the slight increase in comparable sales (0.5% in Q4, 0.3% annually) signals that core operations may be finding some footing.
The company's profitability metrics show persistent pressure with Q4 adjusted EBITDA falling to $96.1 million from $105.3 million and annual adjusted EBITDA dropping to $336.5 million from $401.1 million - a substantial 16.1% decline. However, the narrowed GAAP net loss ($13.8 million in Q4 vs $22.6 million prior year) and significantly improved annual loss position ($101.8 million vs $1.3 billion) demonstrate progress in cost management.
Most encouragingly, Petco generated positive free cash flow of $49.7 million for the year, a marked improvement from the prior year's negative $9.9 million. This cash flow turnaround provides critical financial flexibility as the company navigates its transformation under new CEO Joel Anderson.
The forward guidance for double-digit adjusted EBITDA growth in 2025 suggests management expects their operational improvements to accelerate, though investors should note this comes after a significantly depressed 2024 performance. The market cap of $691.9 million against annual revenue of $6.1 billion indicates investors remain skeptical about Petco's ability to translate its size into sustainable profitability.
Petco's latest results reveal a company in transition working to overcome fundamental retail challenges. The 0.5% comparable sales growth in Q4 represents a slight improvement but falls well below inflation rates, indicating continued real-term customer spending contraction. The 7.3% revenue decline partly reflects the calendar shift (53rd week in prior year), but still points to underlying weaknesses in driving total sales growth.
The company's reference to "retail operating excellence" under new CEO Joel Anderson suggests a shift toward store-level execution improvements and margin management rather than purely pursuing top-line growth. This strategic pivot makes sense given Anderson's background and the challenging pet retail environment where competition from mass merchants and e-commerce continues to intensify.
The improving free cash flow position ($49.7 million) likely stems from inventory optimization and capital expenditure discipline - essential steps for a retailer with Petco's scale. This cash generation capability provides breathing room for implementing the necessary operational changes.
Looking ahead, the promised double-digit adjusted EBITDA growth in 2025 will require substantial improvements in either gross margin (which declined 202 basis points in 2024) or significant SG&A reductions. The company's omnichannel capabilities and services strategy will be critical in differentiating from pure-play competitors, but execution remains the key challenge as indicated by the cautiously optimistic but measured tone in the earnings release.
Expects Double-Digit Adjusted EBITDA Growth in 2025*
Q4 2024 Overview
- Net revenue of
$1.6 billion 7.3% year over year inclusive of the negative impact from the loss of the 53rd week in 2023 - Comparable sales increased
0.5% year over year - Gross profit of
$589.3 million 2.8% year over year compared to$606.3 million - GAAP net loss of
$13.8 million $22.6 million - Adjusted EBITDA1 of
$96.1 million $105.3 million
Full Year 2024 Overview
- Net revenue of
$6.1 billion 2.2% year over year inclusive of the negative impact from the loss of the 53rd week in 2023 - Comparable sales increased
0.3% year over year - Gross profit of
$2.3 billion 1.3% year over year compared to$2.4 billion - GAAP net loss of
$101.8 million $1.3 billion $1.2 billion - Adjusted EBITDA1 of
$336.5 million $401.1 million - Operating cash flow of
$177.7 million $215.7 million - Free Cash Flow1 of
$49.7 million ( last year$9.9) million
"Our results in the fourth quarter demonstrate the progress we've made to return Petco to retail operating excellence," said Joel Anderson, Petco's Chief Executive Officer. "While there is more work ahead, I am confident our new leadership team is well-positioned to build on this early momentum, deliver double-digit adjusted EBITDA improvement in 2025 and set the business up for sustainable profitable growth."
Full Year 2025 Guidance
FY 2025 Guidance* | |
Net revenue | Down low single digits year over year |
Adjusted EBITDA | |
Net interest expense | |
Capital expenditures | |
Depreciation & amortization | |
Real estate | ~20-30 net closures |
First Quarter 2025 Guidance
Q1 2025 Guidance* | |
Net revenue | Down low single digits year over year |
Adjusted EBITDA |
*Assumptions in the guidance include that economic conditions, currency rates and the tax and regulatory landscape remain generally consistent. Adjusted EBITDA is a non-GAAP financial measure and has not been reconciled to the most comparable GAAP outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management's control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide outlook for the comparable GAAP measures. Forward-looking estimates of Adjusted EBITDA are made in a manner consistent with the relevant definitions and assumptions noted herein and in our filings with the Securities and Exchange Commission.
(1) | Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures. |
Earnings Conference Call Webcast Information:
Management will host an earnings conference call on March 26, 2025 at approximately 4:30 PM Eastern Time to discuss the company's financial results. The conference call will be accessible through a live webcast. Interested investors and other individuals can access the webcast, earnings release, and earnings presentation via the company's investor relations page at ir.petco.com. A replay of the webcast will be archived on the company's investor relations page through April 9, 2025 until approximately 5:00 PM Eastern Time.
About Petco, The Health + Wellness Co.:
Founded in 1965, Petco is a category-defining health and wellness company focused on improving the lives of pets, pet parents and our own Petco partners. We've consistently set new standards in pet care while delivering comprehensive pet wellness products, services and solutions, and creating communities that deepen the pet-pet parent bond. We operate more than 1,500 pet care centers across the
Forward-Looking Statements:
This earnings release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not statements of historical fact, including, but not limited to, statements regarding our Q1 and full year 2025 guidance, operational reset of our business, our competitive positioning, profitability, cost action plans and associated cost-savings. Such forward-looking statements can generally be identified by the use of forward-looking terms such as "believes," "expects," "may," "intends," "will," "shall," "should," "anticipates," "opportunity," "illustrative," or the negative thereof or other variations thereon or comparable terminology. Although Petco believes that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct or that any forward-looking results will occur or be realized. Nothing contained in this earnings release is, or should be relied upon as, a promise or representation or warranty as to any future matter, including any matter in respect of the operations or business or financial condition of Petco. All forward-looking statements are based on current expectations and assumptions about future events that may or may not be correct or necessarily take place and that are by their nature subject to significant uncertainties and contingencies, many of which are outside the control of Petco. Forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results or events to differ materially from the potential results or events discussed in the forward-looking statements, including, without limitation, those identified in this earnings release as well as the following: (i) increased competition (including from multi-channel retailers, mass and grocery retailers, and e-Commerce providers); (ii) reduced consumer demand for our products and/or services; (iii) our reliance on key vendors; (iv) our ability to attract and retain qualified employees; (v) risks arising from statutory, regulatory and/or legal developments; (vi) macroeconomic pressures in the markets in which we operate, including inflation, prevailing interest rates and the impact of tariffs; (vii) failure to effectively manage our costs; (viii) our reliance on our information technology systems; (ix) our ability to prevent or effectively respond to a data privacy or security breach; (x) our ability to effectively manage or integrate strategic ventures, alliances or acquisitions and realize the anticipated benefits of such transactions; (xi) economic or regulatory developments that might affect our ability to provide attractive promotional financing; (xii) business interruptions and other supply chain issues; (xiii) catastrophic events, political tensions, conflicts and wars (such as the ongoing conflicts in
Petco cautions that the foregoing list of risks, uncertainties and other factors is not complete, and forward-looking statements speak only as of the date they are made. Petco undertakes no duty to update publicly any such forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.
PETCO HEALTH AND WELLNESS COMPANY, INC. | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
(Unaudited and subject to reclassification) | ||||||||||||
13 Weeks | 14 Weeks | 52 Weeks | 53 Weeks | |||||||||
February 1, | February 3, | Percent | February 1, | February 3, | Percent | |||||||
Net sales: | ||||||||||||
Products | $ 1,310,217 | $ 1,420,713 | (8 %) | $ 5,116,891 | $ 5,273,710 | (3 %) | ||||||
Services and other | 241,913 | 253,763 | (5 %) | 999,571 | 981,574 | 2 % | ||||||
Total net sales | 1,552,130 | 1,674,476 | (7 %) | 6,116,462 | 6,255,284 | (2 %) | ||||||
Cost of sales: | ||||||||||||
Products | 811,204 | 903,156 | (10 %) | 3,173,269 | 3,269,628 | (3 %) | ||||||
Services and other | 151,666 | 164,972 | (8 %) | 618,791 | 631,821 | (2 %) | ||||||
Total cost of sales | 962,870 | 1,068,128 | (10 %) | 3,792,060 | 3,901,449 | (3 %) | ||||||
Gross profit | 589,260 | 606,348 | (3 %) | 2,324,402 | 2,353,835 | (1 %) | ||||||
Selling, general and administrative expenses | 571,872 | 606,182 | (6 %) | 2,317,351 | 2,311,625 | 0 % | ||||||
Goodwill impairment | — | — | N/M | — | 1,222,524 | (100 %) | ||||||
Operating income (loss) | 17,388 | 166 | 10,375 % | 7,051 | (1,180,314) | N/M | ||||||
Interest income | (1,278) | (326) | 292 % | (3,714) | (3,405) | 9 % | ||||||
Interest expense | 34,111 | 39,658 | (14 %) | 143,531 | 150,909 | (5 %) | ||||||
Loss on extinguishment and modification of debt | — | — | N/M | — | 920 | (100 %) | ||||||
Other non-operating loss (income) | 1,000 | — | N/M | (4,800) | (4,727) | 2 % | ||||||
Loss before income taxes and income from | (16,445) | (39,166) | (58 %) | (127,966) | (1,324,011) | (90 %) | ||||||
Income tax expense (benefit) | 2,504 | (10,435) | N/M | (7,481) | (27,613) | (73 %) | ||||||
Income from equity method investees | (5,112) | (6,156) | (17 %) | (18,669) | (16,188) | 15 % | ||||||
Net loss attributable to Class A and B-1 common | $ (13,837) | $ (22,575) | (39 %) | $ (101,816) | $ (1,280,210) | (92 %) | ||||||
Net loss per Class A and B-1 common share: | ||||||||||||
Basic | $ (0.05) | $ (0.08) | (40 %) | $ (0.37) | $ (4.78) | (92 %) | ||||||
Diluted | $ (0.05) | $ (0.08) | (40 %) | $ (0.37) | $ (4.78) | (92 %) | ||||||
Weighted average shares used in computing net loss per Class A | ||||||||||||
Basic | 276,305 | 268,615 | 3 % | 273,410 | 267,549 | 2 % | ||||||
Diluted | 276,305 | 268,615 | 3 % | 273,410 | 267,549 | 2 % | ||||||
PETCO HEALTH AND WELLNESS COMPANY, INC. | ||||
CONSOLIDATED BALANCE SHEETS | ||||
(In thousands, except per share amounts) | ||||
(Unaudited and subject to reclassification) | ||||
February 1, | February 3, | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 165,756 | $ 125,428 | ||
Receivables, less allowance for credit losses1 | 40,425 | 44,369 | ||
Merchandise inventories, net | 653,329 | 684,502 | ||
Prepaid expenses | 53,515 | 58,615 | ||
Other current assets | 60,594 | 38,830 | ||
Total current assets | 973,619 | 951,744 | ||
Fixed assets, net | 725,438 | 816,367 | ||
Operating lease right-of-use assets | 1,302,346 | 1,384,050 | ||
Goodwill | 980,064 | 980,297 | ||
Trade name | 1,025,000 | 1,025,000 | ||
Other long-term assets | 187,963 | 205,694 | ||
Total assets | $ 5,194,430 | $ 5,363,152 | ||
LIABILITIES AND EQUITY | ||||
Current liabilities: | ||||
Accounts payable and book overdrafts | $ 492,878 | $ 485,131 | ||
Accrued salaries and employee benefits | 157,460 | 101,265 | ||
Accrued expenses and other liabilities | 177,079 | 200,278 | ||
Current portion of operating lease liabilities | 306,400 | 310,507 | ||
Current portion of long-term debt and other lease liabilities | 5,346 | 15,962 | ||
Total current liabilities | 1,139,163 | 1,113,143 | ||
Senior secured credit facilities, net, excluding current portion | 1,578,091 | 1,576,223 | ||
Operating lease liabilities, excluding current portion | 1,037,206 | 1,116,615 | ||
Deferred taxes, net | 217,712 | 251,629 | ||
Other long-term liabilities | 108,628 | 121,113 | ||
Total liabilities | 4,080,800 | 4,178,723 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Class A common stock2 | 239 | 231 | ||
Class B-1 common stock3 | 38 | 38 | ||
Class B-2 common stock4 | — | — | ||
Preferred stock5 | — | — | ||
Additional paid-in-capital | 2,280,495 | 2,229,582 | ||
Accumulated deficit | (1,149,059) | (1,047,243) | ||
Accumulated other comprehensive (loss) income | (18,083) | 1,821 | ||
Total stockholders' equity | 1,113,630 | 1,184,429 | ||
Total liabilities and stockholders' equity | $ 5,194,430 | $ 5,363,152 | ||
¹ Allowances for credit losses are | ||||
² Class A common stock, | ||||
³ Class B-1 common stock, | ||||
⁴ Class B-2 common stock, | ||||
⁵ Preferred stock, |
PETCO HEALTH AND WELLNESS COMPANY, INC. | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(In thousands) | ||||
(Unaudited and subject to reclassification) | ||||
52 Weeks | 53 Weeks | |||
February 1, | February 3, | |||
Cash flows from operating activities: | ||||
Net loss | $ (101,816) | |||
Adjustments to reconcile net loss to net cash provided by | ||||
Depreciation and amortization | 199,727 | 200,782 | ||
Amortization of debt discounts and issuance costs | 4,896 | 4,972 | ||
Provision for deferred taxes | (30,492) | (53,549) | ||
Equity-based compensation expense | 50,212 | 81,859 | ||
Impairments, write-offs and losses on sale of fixed and other assets | 8,790 | 2,833 | ||
Loss on extinguishment and modification of debt | — | 920 | ||
Income from equity method investees | (18,669) | (16,188) | ||
Amounts reclassified out of accumulated other comprehensive loss | (3,146) | (488) | ||
Goodwill impairment | — | 1,222,524 | ||
Non-cash operating lease costs | 414,396 | 429,056 | ||
Other non-operating loss (income) | (4,800) | (4,727) | ||
Changes in assets and liabilities: | ||||
Receivables | 4,178 | 5,211 | ||
Merchandise inventories | 30,767 | (32,072) | ||
Prepaid expenses and other assets | (3,960) | (8,009) | ||
Accounts payable and book overdrafts | 8,484 | 103,919 | ||
Accrued salaries and employee benefits | 56,981 | 11,347 | ||
Accrued expenses and other liabilities | (12,455) | (8,495) | ||
Operating lease liabilities | (418,219) | (446,981) | ||
Other long-term liabilities | (7,201) | 3,015 | ||
Net cash provided by operating activities | 177,673 | 215,719 | ||
Cash flows from investing activities: | ||||
Cash paid for fixed assets | (127,990) | (225,598) | ||
Cash paid for acquisitions, net of cash acquired | (629) | (6,725) | ||
Cash paid for investments | (457) | — | ||
Proceeds from investment | 998 | 24,878 | ||
Proceeds from sale of assets | 1,369 | — | ||
Cash received from partial surrender of officers' life insurance | 2,806 | — | ||
Net cash used in investing activities | (123,903) | (207,445) | ||
Cash flows from financing activities: | ||||
Borrowings under long-term debt agreements | 201,000 | 273,000 | ||
Repayments of long-term debt | (201,000) | (348,000) | ||
Debt refinancing costs | (3,028) | — | ||
Payments for finance lease liabilities | (5,707) | (5,925) | ||
Proceeds from employee stock purchase plan and stock option exercises | 3,770 | 4,223 | ||
Tax withholdings on stock-based awards | (6,289) | (8,650) | ||
Proceeds from issuance of common stock | 2,500 | — | ||
Net cash used in financing activities | (8,754) | (85,352) | ||
Net decrease in cash, cash equivalents and restricted cash | 45,016 | (77,078) | ||
Cash, cash equivalents and restricted cash at beginning of period | 136,649 | 213,727 | ||
Cash, cash equivalents and restricted cash at end of period | $ 181,665 | $ 136,649 | ||
NON-GAAP FINANCIAL MEASURES
The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.
The tables below reflect the calculation of Adjusted EBITDA as applicable, for the thirteen and fifty-two weeks ended February 1, 2025 compared to the fourteen and fifty-three weeks ended February 3, 2024, respectively.
Adjusted EBITDA
Adjusted EBITDA is considered a non-GAAP financial measure under the Securities and Exchange Commission's (SEC) rules because it excludes certain amounts included in net income calculated in accordance with GAAP. Management believes that Adjusted EBITDA is a meaningful measure to share with investors because it facilitates comparison of the current period performance with that of the comparable prior period. In addition, Adjusted EBITDA affords investors a view of what management considers to be Petco's core operating performance as well as the ability to make a more informed assessment of such operating performance as compared with that of the prior period. Please see the company's Annual Report on Form 10-K for the fiscal year ended February 3, 2024 filed with the SEC on April 3, 2024 for additional information on Adjusted EBITDA.
(dollars in thousands) | 13 Weeks | 14 Weeks | 52 Weeks | 53 Weeks | ||||
Reconciliation of Net Loss Attributable to Class A and B-1 | February 1, | February 3, | February 1, | February 3, | ||||
Net loss attributable to Class A and B-1 common stockholders | $ (13,837) | $ (22,575) | $ (101,816) | $ (1,280,210) | ||||
Add (deduct): | ||||||||
Interest expense, net | 32,833 | 39,332 | 139,817 | 147,504 | ||||
Income tax expense (benefit) | 2,504 | (10,435) | (7,481) | (27,613) | ||||
Depreciation and amortization | 50,313 | 52,189 | 199,727 | 200,782 | ||||
Income from equity method investees | (5,112) | (6,156) | (18,669) | (16,188) | ||||
Loss on debt extinguishment and modification | — | — | — | 920 | ||||
Goodwill impairment | — | — | — | 1,222,524 | ||||
Losses on sale of assets, impairments and write-offs | 341 | 631 | 8,790 | 2,833 | ||||
Equity-based compensation expense | 9,507 | 17,428 | 50,212 | 81,859 | ||||
Other non-operating loss (income) | 1,000 | — | (4,800) | (4,727) | ||||
11,233 | 11,759 | 41,615 | 38,226 | |||||
Acquisition and divestiture-related integration costs (2) | — | — | 3,719 | — | ||||
Other costs (3) | 7,341 | 23,167 | 25,412 | 35,193 | ||||
Adjusted EBITDA | $ 96,123 | $ 105,340 | $ 336,526 | $ 401,103 | ||||
Net sales | $ 1,552,130 | $ 1,674,476 | $ 6,116,462 | $ 6,255,284 | ||||
Net margin (4) | (0.9 %) | (1.3 %) | (1.7 %) | (20.5 %) | ||||
Adjusted EBITDA Margin | 6.2 % | 6.3 % | 5.5 % | 6.4 % |
Free Cash Flow
Free Cash Flow is a non-GAAP financial measure that is calculated as net cash provided by operating activities less cash paid for fixed assets. Management believes that Free Cash Flow, which measures the ability to generate additional cash from business operations, is an important financial measure for use in evaluating the company's financial performance.
The table below reflects the calculation of Free Cash Flow for the fifty-two weeks ended February 1, 2025 compared to the fifty-three weeks ended February 3, 2024.
(in thousands) | 52 Weeks | 53 Weeks | ||
February 1, | February 3, | |||
Net cash provided by operating activities | $ 177,673 | $ 215,719 | ||
Cash paid for fixed assets | (127,990) | (225,598) | ||
Free Cash Flow | $ 49,683 | $ (9,879) |
Non-GAAP Financial Measures Footnotes
(1) | Mexico Joint Venture EBITDA represents 50 percent of the entity's operating results for all periods, as adjusted to reflect the results on a basis comparable to Adjusted EBITDA. In the financial statements, this joint venture is accounted for as an equity method investment and reported net of depreciation and income taxes because such a presentation would not reflect the adjustments made in the calculation of Adjusted EBITDA, we include the 50 percent interest in the company's |
13 Weeks | 14 Weeks | 52 Weeks | 53 Weeks | |||||
(in thousands) | February 1, | February 3, | February 1, | February 3, | ||||
Net income | $ 10,224 | $ 12,311 | $ 37,559 | $ 32,375 | ||||
Depreciation | 6,536 | 7,070 | 27,360 | 26,141 | ||||
Income tax expense | 5,014 | 2,541 | 16,010 | 11,449 | ||||
Foreign currency loss | 176 | 557 | 169 | 1,520 | ||||
Interest expense, net | 516 | 1,039 | 2,131 | 4,966 | ||||
EBITDA | $ 22,466 | $ 23,518 | $ 83,229 | $ 76,451 | ||||
$ 11,233 | $ 11,759 | $ 41,615 | $ 38,226 |
(2) | Acquisition and divestiture-related integration costs include direct costs resulting from acquiring, integrating, or divesting businesses. These include third-party professional and legal fees, losses on sales of divestitures, and other integration-related costs that would not have otherwise been incurred as part of the company's operations. |
(3) | Other costs include, as incurred: restructuring costs and restructuring-related severance costs; legal reserves associated with significant, non-ordinary course legal or regulatory matters; and costs related to certain significant strategic transactions. |
(4) | We define net margin as net loss attributable to Class A and B-1 common stockholders divided by net sales and Adjusted EBITDA margin as Adjusted EBITDA divided by net sales. |
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SOURCE Petco - Investor Relations
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