Petco CEO Ron Coughlin resigns | Wilnesh News

Petko announced Wednesday that CEO Ron Coughlin is resigning and said board member and Best Buy executive R. Michael Mohan will take over as interim CEO. The company is looking for a permanent replacement.

Coughlin will serve as an advisor to the board of directors “to support the leadership transition.” Coughlin said in a statement that he is proud of the work he has done over the past five years.

“Experiencing a period of tremendous change and growth with our incredible partners is a once-in-a-lifetime opportunity,” said Coughlin. “I am proud of the differentiated business model we have built that provides the best possible service to pets, This sets the company up well for the future.”

Mohan has been a member of the company’s board of directors since March 2021. He previously served as lead independent director and will resign from that position after taking over as interim CEO. He is also the former chief operating officer and president of Best Buy.

Petco board member Cameron Breitner said in a statement: “Mike’s record of tremendous success in multiple areas of the retail industry, in-depth knowledge of Petco and strong operational skills make him the ideal choice to ensure Petco The ideal executive for a seamless transition moving forward.”

Petco also reported fourth-quarter earnings on Wednesday, and the results were broadly in line with expectations.

Here’s how the pet retailer performed compared to Wall Street expectations, according to a survey of analysts by LSEG (formerly Refinitiv):

• Earnings per share: 2 cents adjusted, 2 cents expected
• Revenue: $1.67 billion, $1.62 billion expected

The company reported a net loss of $22.6 million, or 8 cents per share, for the three months ended February 3. A year ago, the company reported net income of $32.7 million, or 12 cents per share. Excluding one-time items, Petco reported earnings of 2 cents per share.

Sales increased to US$1.67 billion, an increase of approximately 6% from US$1.58 billion in the same period last year.

The company’s shares rose 9% in pre-market trading on Wednesday following the CEO change and earnings announcement.

Coughlin’s decision to step down comes as Petco’s market value has declined over the past year, even as the company reported continued sales growth and comparable sales growth. Petco’s shares have fallen about 19% year to date as of Tuesday’s close, giving it a market capitalization of about $784 million, down from about $3 billion in February 2023.

The pet industry is under pressure and facing slowing demand after a pandemic-induced boom failed. During the coronavirus pandemic, a record number of families adopted pets and then needed supplies to support the animals, creating huge gains for retailers like Petco and Chewy.

However, new adoption has since slowed. Sales at Chewy and Petco last year were strong in stable categories like pet food and medicine, but demand for high-margin products like beds, leashes and toys was sluggish.

Since taking over as CEO in 2018, Coughlin has played an important role in Petco’s transformation into a health and wellness company. Under his guidance, the company stopped selling unhealthy pet foods, removed items like shock collars from its offerings, and began building its own pet food brands. Services and Veterinary Business.

In 2020, the company changed its name to Petco Health and Wellness Company. The next year, Coughlin led the company through its initial public offering.

Petco used its massive brick and mortar footprint to build veterinary clinics. Petco is currently one of the largest pet health providers in the United States, operating 282 full-service hospitals as of the end of last year.

According to Bloomberg News, pet healthcare and the high profits it brings are an important part of the overall pet market and have been driving spending growth in the United States. Although Petco’s services revenue grew 17% during the quarter, it only represented a small portion of the company’s total revenue. The returns on these investments will take time, and Wall Street is clearly growing impatient with Petco’s trajectory.

Mohan said in the statement: “I look forward to working with the leadership team and partners to continue to strengthen our business and improve profitability through operating discipline and execution to enhance growth, improve margins and generate cash to create shareholder value.” value.” “My focus will be on our people, our operations and our customer experience, working together to advance our strategy.”