Petco Health and Wellness Company Inc. is confident that shoppers will keep spending on their pets even amid inflation and other economic challenges.
The specialty pet retailer unveiled its longer-term financial framework, as well as its strategic and capital priorities, in the warm-up to its annual Investor Day. Long-term, Petco expects revenue growth in the high single digits and adjusted net income growth in the low single digits. Petco is also reaffirming its fiscal year 2022 guidance, including net revenue of $6.15 - $6.25 billion and adjusted earnings per share of $0.97 - $1.
The company is also testing what it calls "small town rural" store concepts in key strategic locations and driving brand awareness and penetration in low-share markets.
Other new and existing strategic initiatives Petco is undertaking in 2022 to drive growth include:
Unifying an integrated future loyalty program under its Vital Care paid subscription program, with the goals of migrating customers to subscription, saving money for customers, driving share of wallet for Petco, and expanding Petco's market position;
Building a differentiated merchandise offering through key vendor relationships and continuing to scale owned brands, including Reddy;
Scaling personalization capabilities by leveraging its pet database, seeking to deepen engagement and loyalty;
Investing to build a customer-centric, flexible fulfillment network by enhancing the company's physical footprint and digital capabilities;
Driving access to new, high-value customers through partnerships with other brands, such as Lowe’s.
Petco's strategy for long-term value creation Petco believes it can enable sustainable, profitable growth through strategies including:
Deepening its pet health & wellness ecosystem in a $119 billion category the company identifies as large and growing;
Leveraging Petco's national pet care center network to enable differentiated fulfillment capabilities to meet customer needs regardless of how they choose to shop; and,
Growing competitive advantages, including the recently launched Vital Care 2.0 membership subscription program, thereby deepening its data insights.
"Petco is on one of the steepest growth trajectories in all of retail, supported by our position as the only fully integrated provider of pet health and wellness across products, veterinary and services, digital, and in brick and mortar channels," said Ron Coughlin, chairman and CEO of Petco. "We are defining the future of pet parenting in an incredibly high-growth and economically resilient category. Our ecosystem is built to capture the market opportunity and positions us as a leader of what we call Retail 3.0. As we build on last year's incredible performance, we're emerging stronger and more confident that our strategic moats position us to compete and win."
Founded in 1965 and headquartered in San Diego, Petco Health and Wellness Company Inc. operates more than 1,500 Petco locations across the U.S., Mexico and Puerto Rico, including a network of nearly 200 in-store veterinary hospitals.