Why Petco Stock Is Soaring Today

Actions of Petco Health and Wellness Company (WEFT 36.52%) have soared 29.6% since 11:29 a.m. ET Wednesday. The big gain came after the pet retailer announced its second-quarter results after the market closed on Tuesday.

Petco reported Q2 net income of $1.52 billion, down 0.5% year over year. The company posted a net loss based on generally accepted accounting principles (GAAP) of $24.8 million, or $0.09 per share. Adjusted net loss was $5.9 million, or $0.02 per share, which was in line with analysts’ average estimate.

The company is looking for third-quarter 2024 net income of about $1.5 billion, slightly below the consensus estimate of $1.51 billion. It expects adjusted loss per share between $0.03 and $0.04. Analysts project an adjusted loss of $0.03 per share in Q3.

Why Is Petco Stock Soaring?

You might be wondering why Petco stock is soaring after delivering mixed Q2 results and Q3 guidance that came in slightly below expectations. The short answer is that investors liked what they heard in the company’s earnings call.

New CEO Joel Anderson pledged to improve profitability. He told analysts on the conference call that the management team has “put together an excellent strategy on how to get this company back to excellent footing in terms of EBITDA (earnings before interest, taxes, depreciation and amortization) performance.” “. Anderson mentioned several components of this strategy, including exercising more discipline in merchandising and improving supplier partnerships.

Is Petco stock a good choice to buy?

Aggressive investors who like turnaround plays may find Petco stock an attractive pick. Anderson brings a strong background to the table with his experience as CEO of Five below and Walmarthis internet business. If he leads the company in the right execution of its profitability strategy, the stock should continue its recent momentum.