Petco Health+ Wellness Company, Inc. Reports Strong Fourth Quarter and Full-Year 2020 Results, Issues 2021 Guidance
The company delivered fourth quarter comparable sales growth of 17 percent and net revenue growth of 16 percent, marking the ninth consecutive quarter of growth for Petco. A $17.5 million loss on the extinguishment of debt related to the company’s initial public offering contributed to a net loss of $6.2 million or $0.03 per share, an improvement of 14 percent and 17 percent, respectively. Adjusted Net Income1 increased 103 percent from prior year to $37 million or $0.17 per share, while fourth quarter Adjusted EBITDA1 increased 13 percent to $148.6 million from prior year.
Fiscal year 2020 revenue increased 11 percent from prior year to $4.9 billion. A net loss of $26.5 million or $0.13 per share improved 72 percent and 73 percent, respectively and was also inclusive of a $17.5 million loss on the extinguishment of debt related to the company’s initial public offering. That 11 percent growth translated to a 14 percent improvement in Adjusted EBITDA1 to $484.3 million, as well as a $68 million improvement in Adjusted Net Income1 to $58.1 million or $0.28 per share, reflecting the strength of Petco’s multi-channel pet care ecosystem.
“On the heels of a successful IPO in January, we closed the year with a strong fourth quarter and that momentum has carried into 2021,” said Ron Coughlin, Chairman and Chief Executive Officer of Petco. “Our comprehensive petcare ecosystem focused on health and wellness, coupled with our digitally-led, multichannel experience is resonating with pet parents and generating significant competitive advantages that are evident in our performance. Our category continues to grow powered by the millions of incremental new pets in households, which is creating an annuity for years to come. Whether it is eliminating products with artificial ingredients3, rapidly expanding vet clinics, training, grooming or customer-first fulfillment options like same-day delivery, we’re expanding the ways we take care of beloved pets and stepping up to meet increased demand making Petco well positioned for long-term growth.”
In addition, Petco reduced total debt by 49 percent to $1.7 billion and Net Debt1 by 50 percent to $1.5 billion using the proceeds from the company’s initial public offering, the recapitalization of a portion of debt outstanding at the time of the initial public offering and Free Cash Flow1 generation. Net Debt1 reduction and Adjusted EBITDA1 improvement led to a decrease of 4.2x in Petco’s Net Debt1 to Adjusted EBITDA1 ratio to 3.2x. On March 4, Petco announced the successful completion of the company’s debt refinancing transaction which extended the maturity dates of the company’s term loan to 2028 and revolving credit facility to 2026.
For more information, visit the company’s official website.