Shares of Petco (WOOF) gained in after-hours trading after the company reported earnings for its second quarter of Fiscal Year 2024. Earnings per share came in at -$0.02, which was in line with estimates. In addition, sales decreased by 0.7% year-over-year, with revenue hitting $1.52 billion. This was also in line with expectations.
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Interestingly, investors could have anticipated the slight year-over-year decline in sales by simply looking at Petco’s website traffic. As the image below shows, the number of visitors fell during the most recent quarter. In fact, total estimated visits slipped by 6.48% when compared to the same quarter of last year.
Guidance for Q3 2024
Looking forward, management has provided the following guidance for Q3 2024:
- Revenue of $1.5 billion versus analysts’ estimates of $1.51 billion
- Adjusted EBITDA in the range of $76 million to $80 million
- Adjusted EPS in the range of -$0.03 to -$0.04 compared to analysts’ estimates of -$0.03
As we can see, the company’s outlook is basically as expected, which likely led to the after-hours move in the stock price.
Is WOOF Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on WOOF stock based on two Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 38% decline in its share price over the past year, the average WOOF price target of $2.79 per share implies 9.12% downside risk. However, it’s worth noting that estimates will likely change following today’s earnings report.
