- Comparable sales grew 3.8 percent year over year and
23.5 percent on a two-year basis, resulting in fifteenth
consecutive quarter of comparable sales growth
- Net revenue of $1.48
billion increased 3.2 percent year over year
- Delivered net income of $13.5
million and Adjusted EBITDA1 of $142.0 million
- Earnings per share of $0.05, a
decline of $0.23 from prior year;
Adjusted Earnings Per Share1 of $0.19, a decline of $0.06 from prior year
- Updates full year guidance, with net revenue of $5.975 billion to $6.05
billion; Adjusted EBITDA1 of $580.0 million to $595.0
million and Adjusted Earnings Per Share1 between
$0.77 and $0.81
SAN
DIEGO, Aug. 24, 2022 /PRNewswire/ -- Petco Health
and Wellness Company, Inc. (Nasdaq: WOOF), a complete partner in
pet health and wellness, today announced its second quarter 2022
financial results.
In the second quarter of 2022, Petco delivered net revenue of
$1.48 billion, up 3.2 percent versus
prior year. Net income was $13.5
million or $0.05 per share
compared to $75.1 million or
$0.28 per share in the prior year.
Adjusted Net Income1 was $49.7
million or $0.19 per share,
compared to $67.5 million or
$0.25 per share in the prior
year.
"Q2 marks our 15th consecutive growth quarter, demonstrating
that Petco's business and customers continue to grow, driven by the
strength of our unique end-to-end health and wellness pet
ecosystem," said Petco CEO Ron
Coughlin. "Despite economic volatility, the pet category
remains resilient and our 29,000 Petco Partners remain focused on
improving the lives of countless pets and pet parents, working
together and tangibly executing against our strategic priorities -
including further expansion of our vet network and capabilities,
continued mix shift towards premium products, the addition of over
a hundred experiential fresh and frozen pantries in Pet Care
Centers, and double-digit growth in recurring and loyalty
customers."
Fiscal Q2 2022 Operating
Results:
Comparisons are second
quarter of 2022 ended July 30, 2022
versus second quarter of 2021 ended July
31, 2021 unless otherwise noted
Second quarter results reflect continued business and customer
growth, and operational execution, while delivering on the promise
of purpose driven performance.
- Net revenue increased 3.2 percent to $1.48 billion driven by comparable sales growth
of 3.8 percent
- Net income decreased $61.7
million to $13.5 million or
$0.05 per share, which was primarily
impacted by a $55.4 million non-cash
change in the fair value of one of the company's investments and
$10.9 million of integration-related
costs incurred related to the buyout of the company's veterinary
joint venture, Thrive
- Adjusted Net Income1 decreased $17.8 million to $49.7
million or $0.19 per
share
- Adjusted EBITDA1 decreased $13.1 million to $142.0
million
Fiscal 2022 Guidance:
Petco has updated its full year 2022 financial guidance.
For the full year, Petco now expects net revenue of $5.975 billion to $6.05
billion, with Adjusted EBITDA1 of
$580.0 million to $595.0 million. It expects between $250 million and $275
million of capital expenditures, and Adjusted Earnings Per
Share1 between $0.77
and $0.81. Full details can be found
in the schedules below.
(1)
|
Adjusted EBITDA,
Adjusted Net Income, Adjusted EPS and Trailing Twelve Month
Adjusted EBITDA are non-GAAP financial measures. See "Non-GAAP
Financial Measures" for additional information on non-GAAP
financial measures and a reconciliation to the most comparable GAAP
measures.
|
Earnings Conference Call Webcast Information:
Management will host an earnings conference call on August 24, 2022 at 8:30 AM
Eastern Time to discuss the
company's financial results.
The conference call will be accessible through
live webcast. Interested investors and other
individuals can access the webcast, earnings release, earnings
presentation, and infographic via the company's investor
relations page at ir.petco.com. A replay of the webcast will
be archived on the company's investor relations page through
September 7, 2022 at approximately
5:00 PM Eastern Time.
About Petco, The
Health + Wellness Co.:
Founded in 1965, Petco is a category-defining health and
wellness company focused on improving the lives of pets, pet
parents and our own Petco partners. We've consistently set new
standards in pet care while delivering comprehensive pet
wellness products, services and solutions, and creating communities
that deepen the pet-pet parent bond. We operate more than 1,500 pet
care centers across the U.S., Mexico and Puerto
Rico, which offer merchandise, companion animals, grooming,
training and a growing network of on-site veterinary hospitals and
mobile veterinary clinics. Our complete pet health and wellness
ecosystem is accessible through our pet care centers and digitally
at petco.com and on the Petco app. In tandem with
Petco Love (formerly the Petco Foundation), an independent
nonprofit organization, we work with and support thousands of local
animal welfare groups across the country and, through in-store
adoption events, we've helped find homes for more than 6.6 million
animals.
Forward-Looking Statements:
This earnings release contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995 as contained in Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, concerning expectations, beliefs plans, objectives,
goals, strategies, future events or performance and underlying
assumptions and other statements that are not statements of
historical fact, including statements regarding our fiscal year
2022 guidance. Such forward-looking statements can generally be
identified by the use of forward-looking terms such as "believes,"
"expects," "may," "intends," "will," "shall," "should,"
"anticipates," "opportunity," "illustrative", or the negative
thereof or other variations thereon or comparable terminology.
Although Petco believes that the expectations and assumptions
reflected in these statements are reasonable, there can be no
assurance that these expectations will prove to be correct or that
any forward-looking results will occur or be realized. Nothing
contained in this earnings release is, or should be relied upon as,
a promise or representation or warranty as to any future
matter, including any matter in respect of the operations or
business or financial condition of Petco. All forward-looking
statements are based on expectations and assumptions about future
events that may or may not be correct or necessarily take place and
that are by their nature subject to significant uncertainties and
contingencies, many of which are outside the control of Petco.
Forward-looking statements are subject to a number of risks,
uncertainties and other factors that could cause actual results or
events to differ materially from the potential results or events
discussed in the forward-looking statements, including, without
limitation, those identified in this earnings release as well as
the following: (i) increased competition (including from
multi-channel retailers and e-Commerce providers); (ii) reduced
consumer demand for our products and/or services; (iii) our
reliance on key vendors; (iv) our ability to attract and retain
qualified employees; (v) risks arising from statutory, regulatory
and/or legal developments; (vi) macroeconomic pressures in the
markets in which we operate including inflation; (vii) failure to
effectively manage our costs; (viii) our reliance on our
information technology systems; (ix) our ability to prevent or
effectively respond to a privacy or security breach; (x) our
ability to effectively manage or integrate strategic ventures,
alliances or acquisitions and realize the anticipated benefits of
such transactions; (xi) economic or regulatory developments that
might affect our ability to provide attractive promotional
financing; (xii) business interruptions and other supply chain
issues; (xiii) catastrophic events, political tensions, conflicts
and wars (such as the ongoing conflict in Ukraine), health crises, and pandemics,
including the potential effects that the ongoing COVID-19 pandemic
and/or corresponding macroeconomic uncertainty could have on our
financial position, results of operations and cash flows; (xiv) our
ability to maintain positive brand perception and recognition; (xv)
product safety and quality concerns; (xvi) changes to labor or
employment laws or regulations; (xvii) our ability to effectively
manage our real estate portfolio; (xviii) constraints in the
capital markets or our vendor credit terms; (xix) changes in our
credit ratings; and (xx) the other risks, uncertainties and other
factors identified under "Risk Factors" and elsewhere in Petco's
Securities and Exchange Commission filings. The occurrence of any
such factors could significantly alter the results set forth in
these statements.
Petco cautions that the foregoing list of risks, uncertainties
and other factors is not complete, and
forward-looking statements speak only as of the date they are
made. Petco undertakes no duty to update publicly any such
forward-looking statement, whether as a result of new information,
future events or otherwise, except as may be required by applicable
law, regulation or other competent legal authority.
PETCO HEALTH AND
WELLNESS COMPANY, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except
per share amounts)
|
(Unaudited and subject
to reclassification)
|
|
|
|
|
|
|
|
|
|
|
13 Weeks
Ended
|
|
|
|
July 30,
2022
|
|
July 31,
2021
|
|
Percent
Change
|
|
Net
sales
|
|
$
1,480,797
|
|
$
1,434,534
|
|
3 %
|
|
Cost of
sales
|
|
886,320
|
|
835,124
|
|
6 %
|
|
Gross
profit
|
|
594,477
|
|
599,410
|
|
(1 %)
|
|
Selling, general and
administrative expenses
|
|
544,472
|
|
525,942
|
|
4 %
|
|
Operating
income
|
|
50,005
|
|
73,468
|
|
(32 %)
|
|
Interest
income
|
|
(137)
|
|
(13)
|
|
954 %
|
|
Interest
expense
|
|
21,820
|
|
19,206
|
|
14 %
|
|
Other non-operating
loss (income)
|
|
10,259
|
|
(45,162)
|
|
N/M
|
|
Income before income
taxes and income from
equity method investees
|
|
18,063
|
|
99,437
|
|
(82 %)
|
|
Income tax
expense
|
|
6,638
|
|
27,011
|
|
(75 %)
|
|
Income from equity
method investees
|
|
(2,031)
|
|
(2,429)
|
|
(16 %)
|
|
Net
income
|
|
13,456
|
|
74,855
|
|
(82 %)
|
|
Net loss attributable
to noncontrolling interest
|
|
—
|
|
(256)
|
|
(100 %)
|
|
Net income
attributable to Class A and B-1 common
stockholders
|
|
$
13,456
|
|
$
75,111
|
|
(82 %)
|
|
|
|
|
|
|
|
|
|
Net income per Class
A and B-1 common share:
|
|
|
|
|
|
|
|
Basic
|
|
$
0.05
|
|
$
0.28
|
|
(82 %)
|
|
Diluted
|
|
$
0.05
|
|
$
0.28
|
|
(82 %)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in computing net income per Class A
and B-1 common share:
|
|
|
|
|
|
|
|
Basic
|
|
265,431
|
|
264,216
|
|
0 %
|
|
Diluted
|
|
265,835
|
|
265,217
|
|
0 %
|
|
PETCO HEALTH AND
WELLNESS COMPANY, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(In thousands, except
per share amounts)
|
(Unaudited and subject
to reclassification)
|
|
|
|
|
|
July 30,
2022
|
|
January
29,
2022
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
125,187
|
|
$
211,602
|
Receivables, less
allowance for credit losses1
|
|
44,762
|
|
55,618
|
Merchandise
inventories, net
|
|
723,336
|
|
675,111
|
Prepaid
expenses
|
|
53,955
|
|
42,355
|
Other current
assets
|
|
66,589
|
|
86,091
|
Total current
assets
|
|
1,013,829
|
|
1,070,777
|
Fixed assets
|
|
1,872,567
|
|
1,745,691
|
Less accumulated
depreciation
|
|
(1,101,442)
|
|
(1,018,769)
|
Fixed assets,
net
|
|
771,125
|
|
726,922
|
Operating lease
right-of-use assets
|
|
1,378,947
|
|
1,338,465
|
Goodwill
|
|
2,186,829
|
|
2,183,991
|
Trade name
|
|
1,025,000
|
|
1,025,000
|
Other long-term
assets
|
|
166,702
|
|
152,786
|
Total assets
|
|
$ 6,542,432
|
|
$ 6,497,941
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
book overdrafts
|
|
$
416,603
|
|
$
403,976
|
Accrued salaries and
employee benefits
|
|
104,222
|
|
150,630
|
Accrued expenses and
other liabilities
|
|
220,247
|
|
210,872
|
Current portion of
operating lease liabilities
|
|
272,089
|
|
265,897
|
Current portion of
long-term debt and other lease liabilities
|
|
22,251
|
|
21,764
|
Total current
liabilities
|
|
1,035,412
|
|
1,053,139
|
Senior secured credit
facilities, net, excluding current portion
|
|
1,634,346
|
|
1,640,390
|
Operating lease
liabilities, excluding current portion
|
|
1,135,627
|
|
1,096,133
|
Deferred taxes,
net
|
|
326,739
|
|
318,355
|
Other long-term
liabilities
|
|
131,162
|
|
134,105
|
Total
liabilities
|
|
4,263,286
|
|
4,242,122
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Class A common
stock2
|
|
228
|
|
227
|
Class B-1 common
stock3
|
|
38
|
|
38
|
Class B-2 common
stock4
|
|
—
|
|
—
|
Preferred
stock5
|
|
—
|
|
—
|
Additional
paid-in-capital
|
|
2,103,176
|
|
2,133,821
|
Retained
earnings
|
|
180,315
|
|
142,166
|
Accumulated other
comprehensive loss
|
|
(4,611)
|
|
(2,238)
|
Total stockholders'
equity
|
|
2,279,146
|
|
2,274,014
|
Noncontrolling
interest
|
|
—
|
|
(18,195)
|
Total equity
|
|
2,279,146
|
|
2,255,819
|
Total liabilities and
equity
|
|
$ 6,542,432
|
|
$ 6,497,941
|
|
|
|
|
|
(1)
|
Allowances for credit
losses are $1,393 and $931, respectively
|
(2)
|
Class A common stock,
$0.001 par value: Authorized - 1.0 billion shares; Issued and
outstanding - 227.9 million and 227.2 million shares,
respectively
|
(3)
|
Class B-1 common stock,
$0.001 par value: Authorized - 75.0 million shares; Issued and
outstanding - 37.8 million shares
|
(4)
|
Class B-2 common stock,
$0.000001 par value: Authorized - 75.0 million shares; Issued and
outstanding - 37.8 million shares
|
(5)
|
Preferred stock, $0.001
par value: Authorized - 25.0 million shares; Issued and outstanding
– none
|
PETCO HEALTH AND
WELLNESS COMPANY, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited and subject
to reclassification)
|
|
|
|
|
|
|
|
26 Weeks
Ended
|
|
|
July 30,
2022
|
|
July 31,
2021
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$ 37,258
|
|
$
81,004
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
95,570
|
|
82,845
|
Amortization of debt
discounts and issuance costs
|
|
2,456
|
|
3,369
|
Provision for deferred
taxes
|
|
9,216
|
|
12,691
|
Equity-based
compensation
|
|
25,117
|
|
23,110
|
Impairments, write-offs
and losses on sale of fixed and other assets
|
|
1,369
|
|
2,690
|
Loss on extinguishment
and modification of debt
|
|
—
|
|
20,838
|
Income from equity
method investees
|
|
(5,194)
|
|
(4,854)
|
Non-cash operating
lease costs
|
|
210,946
|
|
210,490
|
Other non-operating
loss (income)
|
|
9,945
|
|
(45,162)
|
Changes in assets and
liabilities:
|
|
|
|
|
Receivables
|
|
10,856
|
|
1,937
|
Merchandise
inventories
|
|
(48,225)
|
|
(89,784)
|
Prepaid expenses and
other assets
|
|
(21,932)
|
|
3,294
|
Accounts payable and
book overdrafts
|
|
12,626
|
|
74,466
|
Accrued salaries and
employee benefits
|
|
(37,345)
|
|
(6,017)
|
Accrued expenses and
other liabilities
|
|
5,148
|
|
51,145
|
Operating lease
liabilities
|
|
(205,884)
|
|
(220,655)
|
Other long-term
liabilities
|
|
(1,839)
|
|
997
|
Net cash provided by
operating activities
|
|
100,088
|
|
202,404
|
Cash flows from
investing activities:
|
|
|
|
|
Cash paid for fixed
assets
|
|
(136,190)
|
|
(99,883)
|
Cash paid for
acquisitions, net of cash acquired
|
|
(2,888)
|
|
(2,807)
|
Cash paid for interest
in veterinary joint venture
|
|
(35,000)
|
|
—
|
Proceeds from sale of
assets
|
|
2,127
|
|
105
|
Net cash used in
investing activities
|
|
(171,951)
|
|
(102,585)
|
Cash flows from
financing activities:
|
|
|
|
|
Borrowings under
long-term debt agreements
|
|
4,000
|
|
1,700,000
|
Repayments of long-term
debt
|
|
(12,500)
|
|
(1,682,361)
|
Debt refinancing costs
and original issue discount
|
|
—
|
|
(24,665)
|
Payments for finance
lease liabilities
|
|
(2,964)
|
|
(2,044)
|
Proceeds from employee
stock purchase plan
|
|
2,591
|
|
1,721
|
Tax withholdings on
stock-based awards
|
|
(13,461)
|
|
—
|
Payment of offering
costs
|
|
—
|
|
(3,844)
|
Net cash used in
financing activities
|
|
(22,334)
|
|
(11,193)
|
|
|
|
|
|
Net (decrease) increase
in cash, cash equivalents and restricted cash
|
|
(94,197)
|
|
88,626
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
221,890
|
|
119,540
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$
127,693
|
|
$ 208,166
|
NON-GAAP FINANCIAL MEASURES
The following information provides definitions and
reconciliations of the non-GAAP financial measures presented in
this earnings release to the most directly comparable financial
measures calculated and presented in accordance with generally
accepted accounting principles (GAAP). The company has provided
this non-GAAP financial information, which is not calculated or
presented in accordance with GAAP, as information supplemental and
in addition to the financial measures presented in this earnings
release that are calculated and presented in accordance with GAAP.
Such non-GAAP financial measures should not be considered superior
to, as a substitute for or alternative to, and should be considered
in conjunction with, the GAAP financial measures presented in this
earnings release. The non-GAAP financial measures in this earnings
release may differ from similarly titled measures used by other
companies.
Adjusted EBITDA and Trailing Twelve Month Adjusted
EBITDA
Adjusted EBITDA, including Trailing Twelve Month Adjusted
EBITDA, is considered a non-GAAP financial measure under the
Securities and Exchange Commission's (SEC) rules because it
excludes certain amounts included in net income calculated in
accordance with GAAP. Management believes that Adjusted EBITDA is a
meaningful measure to share with investors because it facilitates
comparison of the current period performance with that of the
comparable prior period. In addition, Adjusted EBITDA affords
investors a view of what management considers to be Petco's core
operating performance as well as the ability to make a more
informed assessment of such operating performance as compared with
that of the prior period.
Please see the company's Annual Report on Form 10-K for the
fiscal year ended January 29, 2022
filed with the SEC on March 24, 2022
for additional information on Adjusted EBITDA. The tables below
reflect the calculation of Adjusted
EBITDA for the thirteen weeks and trailing twelve
months ended July 30, 2022 compared to the thirteen
weeks and trailing twelve months ended July
31, 2021, respectively, as well as the twelve-month period
ended January 29, 2022.
(dollars in
thousands)
|
|
13 Weeks
Ended
|
Reconciliation of
Net Income Attributable to Class A and B-1
Common Stockholders to Adjusted EBITDA
|
|
July 30,
2022
|
|
July 31,
2021
|
Net income
attributable to Class A and B-1 common stockholders
|
|
$
13,456
|
|
$
75,111
|
Add
(deduct):
|
|
|
|
|
Interest expense,
net
|
|
21,683
|
|
19,193
|
Income tax
expense
|
|
6,638
|
|
27,011
|
Depreciation and
amortization
|
|
48,603
|
|
41,238
|
Income from equity
method investees
|
|
(2,031)
|
|
(2,429)
|
Asset impairments and
write offs
|
|
1,207
|
|
1,743
|
Equity-based
compensation
|
|
12,895
|
|
11,506
|
Other non-operating
loss (income)
|
|
10,259
|
|
(45,162)
|
Mexico joint venture
EBITDA (1)
|
|
6,501
|
|
5,856
|
Store pre-opening
expenses
|
|
3,803
|
|
3,488
|
Store closing
expenses
|
|
881
|
|
962
|
Non-cash
occupancy-related costs (2)
|
|
2,286
|
|
2,885
|
Acquisition-related
integration costs (3)
|
|
10,859
|
|
—
|
Other costs
(4)
|
|
4,915
|
|
13,671
|
Adjusted
EBITDA
|
|
$
141,955
|
|
$
155,073
|
Net sales
|
|
$ 1,480,797
|
|
$ 1,434,534
|
Net margin
(5)
|
|
0.9 %
|
|
5.2 %
|
Adjusted EBITDA
Margin
|
|
9.6 %
|
|
10.8 %
|
(dollars in
thousands)
|
|
Trailing Twelve
Months
|
Reconciliation of
Net Income Attributable to Class A and B-1
Common Stockholders to Adjusted EBITDA
|
|
July 30,
2022
|
|
January 29,
2022
|
|
July 31,
2021
|
Net income
attributable to Class A and B-1 common stockholders
|
|
$
119,895
|
|
$
164,417
|
|
$
79,915
|
Add
(deduct):
|
|
|
|
|
|
|
Interest expense,
net
|
|
78,932
|
|
77,335
|
|
143,113
|
Income tax
expense
|
|
40,422
|
|
53,473
|
|
31,950
|
Depreciation and
amortization
|
|
185,156
|
|
172,431
|
|
171,643
|
Income from equity
method investees
|
|
(11,224)
|
|
(10,883)
|
|
(10,259)
|
Loss on debt
extinguishment and modification
|
|
—
|
|
20,838
|
|
38,387
|
Asset impairments and
write offs
|
|
9,597
|
|
10,918
|
|
12,035
|
Equity-based
compensation
|
|
51,272
|
|
49,265
|
|
31,408
|
Other non-operating
loss (income)
|
|
20,609
|
|
(34,497)
|
|
(45,162)
|
Mexico joint venture
EBITDA (1)
|
|
28,254
|
|
26,837
|
|
23,434
|
Store pre-opening
expenses
|
|
14,410
|
|
14,765
|
|
13,360
|
Store closing
expenses
|
|
5,704
|
|
5,028
|
|
6,211
|
Non-cash
occupancy-related costs (2)
|
|
8,570
|
|
8,114
|
|
10,095
|
Acquisition-related
integration costs (3)
|
|
13,095
|
|
—
|
|
—
|
Other costs
(4)
|
|
20,473
|
|
33,437
|
|
41,389
|
Adjusted
EBITDA
|
|
$
585,165
|
|
$
591,478
|
|
$
547,519
|
Net sales
|
|
$
5,914,409
|
|
$
5,807,149
|
|
$
5,447,238
|
Net margin
(5)
|
|
2.0 %
|
|
2.8 %
|
|
1.5 %
|
Adjusted EBITDA
Margin
|
|
9.9 %
|
|
10.2 %
|
|
10.1 %
|
Adjusted Net Income and Adjusted EPS
Adjusted Net Income and Adjusted diluted earnings per share
attributable to Petco common stockholders (Adjusted EPS) are
considered non-GAAP financial measures under the SEC's rules
because they exclude certain amounts included in the net income
attributable to Petco common stockholders and diluted earnings per
share attributable to Petco common stockholders calculated in
accordance with GAAP. Management believes that Adjusted Net
Income and Adjusted EPS are meaningful measures to share with
investors because they facilitate comparison of the current period
performance with that of the comparable prior period. In addition,
Adjusted Net Income and Adjusted EPS afford investors a view of
what management considers to be Petco's core earnings performance
as well as the ability to make a more informed assessment of such
earnings performance with that of the prior period.
The tables below reflect the calculation of Adjusted Net Income
and Adjusted EPS for the thirteen weeks ended July 30, 2022 compared to the thirteen weeks
ended July 31, 2021.
(in thousands,
except per share amounts)
|
|
13 Weeks
Ended
|
Reconciliation of
Diluted EPS to Adjusted EPS
|
|
July 30,
2022
|
|
July 31,
2021
|
|
|
Amount
|
|
Per
share
|
|
Amount
|
|
Per
share
|
Net income
attributable to common stockholders / diluted EPS
|
|
$
13,456
|
|
$
0.05
|
|
$
75,111
|
|
$
0.28
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
6,638
|
|
0.02
|
|
27,011
|
|
0.10
|
Asset impairments and
write offs
|
|
1,207
|
|
0.01
|
|
1,743
|
|
0.01
|
Equity-based
compensation
|
|
12,895
|
|
0.05
|
|
11,506
|
|
0.04
|
Other non-operating
loss (income)
|
|
10,259
|
|
0.04
|
|
(45,162)
|
|
(0.17)
|
Store pre-opening
expenses
|
|
3,803
|
|
0.01
|
|
3,488
|
|
0.01
|
Store closing
expenses
|
|
881
|
|
0.00
|
|
962
|
|
0.01
|
Non-cash
occupancy-related costs (2)
|
|
2,286
|
|
0.01
|
|
2,885
|
|
0.01
|
Acquisition-related
integration costs (3)
|
|
10,859
|
|
0.04
|
|
—
|
|
—
|
Other costs
(4)
|
|
4,915
|
|
0.02
|
|
13,671
|
|
0.05
|
Adjusted pre-tax income
/ diluted earnings per share
|
|
$ 67,199
|
|
$
0.25
|
|
$ 91,215
|
|
$
0.34
|
Income tax expense at
26% normalized tax rate
|
|
17,472
|
|
0.06
|
|
23,716
|
|
0.09
|
Adjusted Net Income
/ Adjusted EPS
|
|
$
49,727
|
|
$
0.19
|
|
$
67,499
|
|
$
0.25
|
Fiscal 2022 Guidance
Metric
|
Prior Guidance
|
Revised Guidance
|
Net Revenue
|
$6.15 - $6.25
billion
|
$5.975 - $6.05
billion
|
Adjusted EBITDA
|
$630 - $645
million
|
$580
– $595
million
|
Adjusted EPS
|
$0.97 -
$1.00
|
$0.77 -
$0.81
|
Capital Expenditures
|
$275 - $325
million
|
$250 - $275
million
|
Assumptions in the previously stated guidance include that
economic conditions, currency rates and the tax and regulatory
landscape remain generally consistent. Adjusted EPS guidance
assumes approximately $90
million of interest expense, a 26 percent tax
rate and a 267 million weighted average diluted
share count. Adjusted EBITDA and Adjusted EPS are
non-GAAP financial measures and have not been reconciled to the
most comparable GAAP outlook because it is not possible to do so
without unreasonable efforts due to the uncertainty and potential
variability of reconciling items, which are dependent on future
events and often outside of management's control and which could be
significant. Because such items cannot be reasonably predicted with
the level of precision required, we are unable to provide outlook
for the comparable GAAP measures. Forward-looking estimates of
Adjusted EBITDA and Adjusted EPS are made in a manner consistent
with the relevant definitions and assumptions noted herein.
Adjusted EBITDA, Adjusted Net Income and Adjusted EPS
Footnotes
(1)
|
Mexico Joint Venture
EBITDA represents 50 percent of the entity's operating results for
all periods, as adjusted to reflect the results on a basis
comparable to Adjusted EBITDA. In the financial statements, this
joint venture is accounted for as an equity method investment and
reported net of depreciation and income taxes. Because such a
presentation would not reflect the adjustments made in the
calculation of Adjusted EBITDA, we include the 50 percent interest
in the company's Mexico joint venture on an Adjusted EBITDA basis
to ensure consistency. The table below presents a reconciliation of
Mexico joint venture net income to Mexico joint venture
EBITDA.
|
|
|
|
|
13 Weeks
Ended
|
(in
thousands)
|
|
July 30,
2022
|
|
July 31,
2021
|
Net income
|
|
$
4,064
|
|
$
4,864
|
Depreciation
|
|
4,711
|
|
3,401
|
Income tax
expense
|
|
2,390
|
|
2,631
|
Foreign currency loss
(gain)
|
|
444
|
|
(342)
|
Interest expense,
net
|
|
1,392
|
|
1,158
|
EBITDA
|
|
$ 13,001
|
|
$ 11,712
|
50% of
EBITDA
|
|
$
6,501
|
|
$
5,856
|
|
|
(2)
|
Non-cash
occupancy-related costs include the difference between cash and
straight-line rent for all periods.
|
|
|
(3)
|
Acquisition/integration
costs include direct costs resulting from acquiring and integrating
businesses. These include third-party professional and legal fees
and other integration-related costs that would not have otherwise
been incurred as part of the company's operations. For the thirteen
weeks ended July 30, 2022, approximately $6.7 million of Thrive
integration costs were recorded in cost of sales and $4.1 million
of integration costs were recorded in selling, general and
administrative expenses.
|
(4)
|
Other costs include:
severance; legal reserves and related fees; one-time consulting and
other costs associated with our strategic transformation
initiatives; discontinuation and liquidation costs; and costs
related to our initial public offering and refinancing.
|
|
|
(5)
|
We define net margin as
net income attributable to Class A and B-1 common stockholders
divided by net sales and Adjusted EBITDA margin as Adjusted EBITDA
divided by net sales.
|
WOOF-F
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SOURCE Petco - Investor Relations