• Net Revenue: Q4 net revenue increased by 6.1% to $1.7 billion; full year net revenue rose 3.6% to $6.3 billion.

• Net Loss: Q4 GAAP net loss of $22.6 million; full year net loss, including a goodwill impairment of $1.2 billion, totaled $1.3 billion.

• Adjusted EBITDA: Q4 Adjusted EBITDA decreased to $105.3 million; full year Adjusted EBITDA was $401.1 million.

• Adjusted Net Income: Q4 Adjusted Net Income fell to $6.1 million; full year Adjusted Net Income was $22.8 million.

• Guidance: No full year revenue or Adjusted EBITDA guidance provided; Q1 2024 outlook anticipates net revenue of approximately $1.5 billion.

• Warning! GuruFocus has detected 3 Warning Signs with WOOF.

On March 13, 2024, Petco Health and Wellness Co Inc (NASDAQ:WOOF) released its 8-K filing, detailing its financial performance for the fourth quarter and full year of 2023. The company, a comprehensive partner in pet health and wellness, operates more than 1,500 pet care centers and offers a wide range of pet wellness products and services.

Despite a challenging year, Petco reported a net revenue increase in both the fourth quarter and the full year, driven by growth in its consumables and services segments. However, this was offset by declines in the supplies and companion animal business. The company faced a significant net loss for the year, largely due to a substantial goodwill impairment charge.

Financial Performance Overview

In the fourth quarter, Petco's net revenue grew to $1.7 billion, a 6.1% increase compared to the previous year. This growth was supported by an 8.8% increase in the consumables business and a notable 17.4% rise in services and other business. However, the supplies and companion animal business saw a 1.4% decline. The GAAP net loss for the quarter was $22.6 million, a stark contrast to the net income of $32.7 million reported in the prior year. Adjusted Net Income for the quarter was $6.1 million, down from $52.8 million in the previous year, and Adjusted EBITDA stood at $105.3 million, compared to $157.9 million in the prior year.

For the full year 2023, Petco's net revenue increased by 3.6% to $6.3 billion. The consumables business grew by 7.1%, and the services and other business surged by 21.9%. Conversely, the supplies and companion animal business declined by 6.8%. The GAAP net loss for the year, which included a goodwill impairment of $1.2 billion, was $1.3 billion, compared to a net income of $90.8 million in the prior year. Adjusted Net Income for the year was $22.8 million, a decrease from $162.6 million in the prior year, and Adjusted EBITDA was $401.1 million, down from $530.8 million.