Petco Health and Wellness Co. announced that it lowered revenue forecasts as consumers buy fewer animals and supplies, The Wall Street Journal reported on Wednesday.
The retailer, which went public in 2021, said that sales of supplies and small pets fell 9% in the second quarter, with other items such as food, cat litter and grooming continuing to rise by double digits due to a pandemic-related pet frenzy.
That translates to total second-quarter sales growth of just 3%, down from 4.3% in the first quarter of 2022.
As a result, Petco dropped its expected revenue this year from a range of $6.15 billion to $6.25 billion to between $5.98 billion and $6.05 billion. Meanwhile, it lowered the per-share profit view from nearly $1 to between 77 cents and 81 cents.
"We're in a different space than we were 90 days ago, and we believe that our guidance reflects what we currently see in the market," said Brian LaRose, Petco's chief financial officer.
CEO Ronald Coughlin noted that a rise in demand had caused a substantial strain on supply chains. According to the American Society for the Prevention of Cruelty to Animals, more than 23 million households adopted a new pet during the pandemic.
"There is not one of our vendors that planned for the millions of new pets that happened in 2021, and there continues to be more adoptions versus pre-pandemic into this year," Coughlin said.
Petco held a profit of $13.5 million for the quarter ending in July, a more than $60 million drop from a year prior. The company stated that a large portion of the decline is the result of costs relating to its buying out the veterinary company Thrive.
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