Shares of Petco Health & Wellness hit an all-time low as the company reported a loss for the third consecutive quarter and revised its earnings guidance downwards for the second time this year.
Declining Sales Impact Stock
During the trading day, Petco’s stock fell by 32% to reach a record low of $2.63. With a year-to-date decrease of over 72%, the company’s shares have taken a significant hit.
Factors Contributing to Loss
Petco’s loss in the third quarter can be primarily attributed to a decline in sales. Additionally, the company recorded a noncash goodwill impairment charge of $1.2 billion related to goodwill initially recorded in 2015. This charge is a result of the decline in the company’s stock price.
Adjusted Earnings Outlook Revised
Furthermore, Petco has lowered its adjusted earnings outlook for 2023. The previous guidance ranging from 24 cents to 30 cents per share has been reduced to a projected estimate of 8 cents per share. This revision reflects the ongoing challenges faced by CEO Ron Coughlin and his team.
Petco acknowledges that it continues to navigate through a difficult consumer environment. Nonetheless, the company is taking strategic actions to enhance its performance.