- Momentum continued into first quarter with comparable sales
growth of 5.1 percent year over year and 33.5 percent on a two-year
basis, on top of record comparable sales a year ago
- Delivered fourteenth consecutive quarter of comparable sales
growth
- Revenue growth of 4.3 percent, net income growth of 227
percent and strong Adjusted EBITDA1 growth of 5.4
percent
- Earnings per share of $0.09,
up $0.06 or 226 percent from prior
year; Adjusted Earnings Per Share1 of $0.17 consistent with prior year
- Maintained full year guidance, with revenue of $6.15 billion to $6.25
billion; Adjusted EBITDA1 between $630 million and $645
million, and Adjusted Earnings Per Share1 between
$0.97 and $1.00
SAN
DIEGO, May 24, 2022 /PRNewswire/ -- Petco Health
and Wellness Company, Inc. (Nasdaq: WOOF), a complete partner in
pet health and wellness, today announced its first quarter 2022
financial results, which reflected increases in both comparable
sales and profitability, on top of record comparable sales a year
ago.
In the first quarter of 2022, Petco delivered net revenue of
$1.48 billion, up 4.3 percent versus
prior year. Net income improved by $17.1
million from prior year to $24.7
million or $0.09 per share.
Adjusted Net Income1 increased $1.7 million to $46.1
million or $0.17 per share,
consistent with prior year.
"Petco's strong Q1 results were driven by our incredible team's
'no excuses' execution approach, a pet category that continues to
surge, and the power of our one-of-a-kind end to end offering that
now includes over 200 fully owned veterinary hospitals," said
Ron Coughlin, CEO of Petco. "This is
our 14th consecutive growth quarter and we are confident
that continued category momentum – combined with our differentiated
services, merchandise and advantaged Retail 3.0 omnichannel
capabilities – positions us to continue delivering growth."
Fiscal Q1 2022 Operating Results:
Comparisons are first quarter of 2022 ended April 30, 2022 versus first quarter of 2021 ended
May 1, 2021 unless otherwise
noted
First quarter results demonstrated continued operational
excellence, while simultaneously delivering on the promise of
purpose driven performance.
- Net revenue increased 4.3 percent to $1.48 billion driven by comparable sales growth
of 5.1 percent
- Net income increased $17.1
million to $24.7 million or
$0.09 per share
- Adjusted Net Income1 increased $1.7 million to $46.1
million or $0.17 per
share
- Adjusted EBITDA1 increased $6.8 million to $132.6
million
|
(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.
|
Fiscal 2022 Guidance:
Petco has maintained its full year 2022 financial guidance as
previously stated, and as set out in the schedules below.
Earnings Conference Call Webcast Information:
Management will host an earnings conference call on May 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
June 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 6.5 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, our growth plans, and execution on our
transformation initiatives. 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
|
|
|
|
April 30,
2022
|
|
May 1,
2021
|
|
Percent
Change
|
|
Net
sales
|
|
$ 1,475,991
|
|
$
1,414,994
|
|
4%
|
|
Cost of
sales
|
|
868,317
|
|
818,009
|
|
6%
|
|
Gross
profit
|
|
607,674
|
|
596,985
|
|
2%
|
|
Selling, general and
administrative expenses
|
|
557,735
|
|
549,236
|
|
2%
|
|
Operating
income
|
|
49,939
|
|
47,749
|
|
5%
|
|
Interest
income
|
|
(20)
|
|
(21)
|
|
(5%)
|
|
Interest
expense
|
|
19,634
|
|
20,529
|
|
(4%)
|
|
Loss on extinguishment
and modification of debt
|
|
—
|
|
20,838
|
|
(100%)
|
|
Other non-operating
income
|
|
(314)
|
|
—
|
|
N/M
|
|
Income before income
taxes and income from
equity method investees
|
|
30,639
|
|
6,403
|
|
379%
|
|
Income tax
expense
|
|
10,000
|
|
2,679
|
|
273%
|
|
Income from equity
method investees
|
|
(3,163)
|
|
(2,425)
|
|
30%
|
|
Net
income
|
|
23,802
|
|
6,149
|
|
287%
|
|
Net loss attributable
to noncontrolling interest
|
|
(891)
|
|
(1,411)
|
|
(37%)
|
|
Net income
attributable to Class A and B-1 common
stockholders
|
|
$
24,693
|
|
$
7,560
|
|
227%
|
|
|
|
|
|
|
|
|
|
Net income per Class
A and B-1 common share:
|
|
|
|
|
|
|
|
Basic
|
|
$
0.09
|
|
$
0.03
|
|
226%
|
|
Diluted
|
|
$
0.09
|
|
$
0.03
|
|
226%
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in computing net income per Class A
and B-1 common share:
|
|
|
|
|
|
|
|
Basic
|
|
265,050
|
|
264,215
|
|
0%
|
|
Diluted
|
|
265,701
|
|
265,028
|
|
0%
|
|
PETCO HEALTH AND
WELLNESS COMPANY, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(In thousands, except
per share amounts)
|
(Unaudited and subject
to reclassification)
|
|
|
|
|
|
April 30,
2022
|
|
January
29,
2022
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
190,893
|
|
$
211,602
|
Receivables, less
allowance for credit losses1
|
|
42,221
|
|
55,618
|
Merchandise
inventories, net
|
|
682,040
|
|
675,111
|
Prepaid
expenses
|
|
52,129
|
|
42,355
|
Other current
assets
|
|
81,602
|
|
86,091
|
Total current
assets
|
|
1,048,885
|
|
1,070,777
|
Fixed assets
|
|
1,792,202
|
|
1,745,691
|
Less accumulated
depreciation
|
|
(1,056,858)
|
|
(1,018,769)
|
Fixed assets,
net
|
|
735,344
|
|
726,922
|
Operating lease
right-of-use assets
|
|
1,356,879
|
|
1,338,465
|
Goodwill
|
|
2,183,991
|
|
2,183,991
|
Trade name
|
|
1,025,000
|
|
1,025,000
|
Other long-term
assets
|
|
155,688
|
|
152,786
|
Total assets
|
|
$
6,505,787
|
|
$
6,497,941
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
book overdrafts
|
|
$
392,662
|
|
$
403,976
|
Accrued salaries and
employee benefits
|
|
125,616
|
|
150,630
|
Accrued expenses and
other liabilities
|
|
213,396
|
|
210,872
|
Current portion of
operating lease liabilities
|
|
258,349
|
|
265,897
|
Current portion of
long-term debt and other lease liabilities
|
|
21,789
|
|
21,764
|
Total current
liabilities
|
|
1,011,812
|
|
1,053,139
|
Senior secured credit
facilities, net, excluding current portion
|
|
1,637,365
|
|
1,640,390
|
Operating lease
liabilities, excluding current portion
|
|
1,114,268
|
|
1,096,133
|
Deferred taxes,
net
|
|
322,626
|
|
318,355
|
Other long-term
liabilities
|
|
132,009
|
|
134,105
|
Total
liabilities
|
|
4,218,080
|
|
4,242,122
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Class A common
stock2
|
|
227
|
|
227
|
Class B-1 common
stock3
|
|
38
|
|
38
|
Class B-2 common
stock4
|
|
—
|
|
—
|
Preferred
stock5
|
|
—
|
|
—
|
Additional
paid-in-capital
|
|
2,143,505
|
|
2,133,821
|
Retained
earnings
|
|
166,859
|
|
142,166
|
Accumulated other
comprehensive loss
|
|
(3,836)
|
|
(2,238)
|
Total stockholders'
equity
|
|
2,306,793
|
|
2,274,014
|
Noncontrolling
interest
|
|
(19,086)
|
|
(18,195)
|
Total equity
|
|
2,287,707
|
|
2,255,819
|
Total liabilities and
equity
|
|
$
6,505,787
|
|
$
6,497,941
|
|
|
(1)
|
Allowances for credit
losses are $1,114 and $931, respectively
|
(2)
|
Class A common stock,
$0.001 par value: Authorized - 1.0 billion shares; Issued and
outstanding - 227.5 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)
|
|
|
|
|
|
|
|
13 Weeks
Ended
|
|
|
April 30,
2022
|
|
May 1,
2021
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$ 23,802
|
|
$
6,149
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
46,967
|
|
41,607
|
Amortization of debt
discounts and issuance costs
|
|
1,224
|
|
2,165
|
Provision for deferred
taxes
|
|
4,832
|
|
1,708
|
Equity-based
compensation
|
|
12,222
|
|
11,604
|
Impairments, write-offs
and losses on sale of fixed and other assets
|
|
162
|
|
947
|
Loss on extinguishment
and modification of debt
|
|
—
|
|
20,838
|
Income from equity
method investees
|
|
(3,163)
|
|
(2,425)
|
Non-cash operating
lease costs
|
|
105,249
|
|
105,188
|
Other non-operating
income
|
|
(314)
|
|
—
|
Changes in assets and
liabilities:
|
|
|
|
|
Receivables
|
|
13,397
|
|
3,748
|
Merchandise
inventories
|
|
(6,930)
|
|
(36,008)
|
Prepaid expenses and
other assets
|
|
(9,896)
|
|
(9,140)
|
Accounts payable and
book overdrafts
|
|
(11,314)
|
|
20,119
|
Accrued salaries and
employee benefits
|
|
(16,478)
|
|
(2,483)
|
Accrued expenses and
other liabilities
|
|
11,290
|
|
66,120
|
Operating lease
liabilities
|
|
(112,272)
|
|
(116,994)
|
Other long-term
liabilities
|
|
(1,259)
|
|
1,859
|
Net cash provided by
operating activities
|
|
57,519
|
|
115,002
|
Cash flows from
investing activities:
|
|
|
|
|
Cash paid for fixed
assets
|
|
(65,910)
|
|
(47,351)
|
Net cash used in
investing activities
|
|
(65,910)
|
|
(47,351)
|
Cash flows from
financing activities:
|
|
|
|
|
Borrowings under
long-term debt agreements
|
|
—
|
|
1,700,000
|
Repayments of long-term
debt
|
|
(4,250)
|
|
(1,678,111)
|
Debt refinancing
costs
|
|
—
|
|
(24,665)
|
Payments for finance
lease liabilities
|
|
(1,022)
|
|
(593)
|
Proceeds from employee
stock purchase plan and stock option exercises
|
|
1,453
|
|
—
|
Tax withholdings on
stock-based awards
|
|
(11,441)
|
|
—
|
Payment of offering
costs
|
|
—
|
|
(3,844)
|
Net cash used in
financing activities
|
|
(15,260)
|
|
(7,213)
|
|
|
|
|
|
Net (decrease) increase
in cash, cash equivalents and restricted cash
|
|
(23,651)
|
|
60,438
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
221,890
|
|
119,540
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$
198,239
|
|
$
179,978
|
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 and
trailing twelve months ended April 30,
2022 compared to the thirteen and trailing twelve months
ended May 1, 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
|
|
April 30,
2022
|
|
May 1,
2021
|
Net income
attributable to Class A and B-1 common stockholders
|
|
$
24,693
|
|
$
7,560
|
Add
(deduct):
|
|
|
|
|
Interest expense,
net
|
|
19,614
|
|
20,508
|
Income tax
expense
|
|
10,000
|
|
2,679
|
Depreciation and
amortization
|
|
46,967
|
|
41,607
|
Income from equity
method investees
|
|
(3,163)
|
|
(2,425)
|
Loss on debt
extinguishment and modification
|
|
—
|
|
20,838
|
Asset impairments and
write offs
|
|
162
|
|
947
|
Equity-based
compensation
|
|
12,222
|
|
11,604
|
Other non-operating
income
|
|
(314)
|
|
—
|
Mexico joint venture
EBITDA (1)
|
|
6,778
|
|
6,006
|
Store pre-opening
expenses
|
|
3,359
|
|
4,029
|
Store closing
expenses
|
|
1,860
|
|
1,103
|
Non-cash
occupancy-related costs (2)
|
|
2,194
|
|
1,139
|
Acquisition-related
integration costs (3)
|
|
2,236
|
|
—
|
Other costs
(4)
|
|
5,943
|
|
10,151
|
Adjusted
EBITDA
|
|
$
132,551
|
|
$
125,746
|
Net sales
|
|
$
1,475,991
|
|
$
1,414,994
|
Net margin
(5)
|
|
1.7%
|
|
0.5%
|
Adjusted EBITDA
Margin
|
|
9.0%
|
|
8.9%
|
(dollars in
thousands)
|
|
Trailing Twelve
Months
|
Reconciliation of
Net Income Attributable to Class A and B-1
Common Stockholders to Adjusted EBITDA
|
|
April 30,
2022
|
|
January 29,
2022
|
|
May 1,
2021
|
Net income
attributable to Class A and B-1 common stockholders
|
|
$
181,550
|
|
$
164,417
|
|
$
12,245
|
Add
(deduct):
|
|
|
|
|
|
|
Interest expense,
net
|
|
76,442
|
|
77,335
|
|
178,314
|
Income tax
expense
|
|
60,795
|
|
53,473
|
|
9,897
|
Depreciation and
amortization
|
|
177,791
|
|
172,431
|
|
172,876
|
Income from equity
method investees
|
|
(11,622)
|
|
(10,883)
|
|
(8,575)
|
Loss on debt
extinguishment and modification
|
|
—
|
|
20,838
|
|
38,387
|
Asset impairments and
write offs
|
|
10,133
|
|
10,918
|
|
13,144
|
Equity-based
compensation
|
|
49,883
|
|
49,265
|
|
22,214
|
Other non-operating
income
|
|
(34,812)
|
|
(34,497)
|
|
—
|
Mexico joint venture
EBITDA (1)
|
|
27,609
|
|
26,837
|
|
21,061
|
Store pre-opening
expenses
|
|
14,095
|
|
14,765
|
|
11,349
|
Store closing
expenses
|
|
5,785
|
|
5,028
|
|
7,858
|
Non-cash
occupancy-related costs (2)
|
|
9,169
|
|
8,114
|
|
13,179
|
Acquisition-related
integration costs (3)
|
|
2,236
|
|
—
|
|
—
|
Other costs
(4)
|
|
29,229
|
|
33,437
|
|
31,309
|
Adjusted
EBITDA
|
|
$
598,283
|
|
$
591,478
|
|
$
523,258
|
Net sales
|
|
$
5,868,146
|
|
$
5,807,149
|
|
$
5,221,675
|
Net margin
(5)
|
|
3.1%
|
|
2.8%
|
|
0.2%
|
Adjusted EBITDA
Margin
|
|
10.2%
|
|
10.2%
|
|
10.0%
|
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 April 30, 2022 compared to the thirteen weeks
ended May 1, 2021.
(in thousands,
except per share amounts)
|
|
13 Weeks
Ended
|
Reconciliation of
Diluted EPS to Adjusted EPS
|
|
April 30,
2022
|
|
May 1,
2021
|
|
|
Amount
|
|
Per
share
|
|
Amount
|
|
Per
share
|
Net income
attributable to common stockholders / diluted EPS
|
|
$
24,693
|
|
$
0.09
|
|
$
7,560
|
|
$
0.03
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
10,000
|
|
0.04
|
|
2,679
|
|
0.01
|
Loss on debt
extinguishment and modification
|
|
—
|
|
—
|
|
20,838
|
|
0.08
|
Asset impairments and
write offs
|
|
162
|
|
0.00
|
|
947
|
|
0.00
|
Equity-based
compensation
|
|
12,222
|
|
0.04
|
|
11,604
|
|
0.04
|
Other non-operating
income
|
|
(314)
|
|
(0.00)
|
|
—
|
|
—
|
Store pre-opening
expenses
|
|
3,359
|
|
0.01
|
|
4,029
|
|
0.02
|
Store closing
expenses
|
|
1,860
|
|
0.01
|
|
1,103
|
|
0.00
|
Non-cash
occupancy-related costs (2)
|
|
2,194
|
|
0.01
|
|
1,139
|
|
0.01
|
Acquisition-related
integration costs (3)
|
|
2,236
|
|
0.01
|
|
—
|
|
—
|
Other costs
(4)
|
|
5,943
|
|
0.02
|
|
10,151
|
|
0.04
|
Adjusted pre-tax income
/ diluted earnings per share
|
|
$ 62,355
|
|
$
0.23
|
|
$ 60,050
|
|
$
0.23
|
Income tax expense at
26% normalized tax rate
|
|
16,212
|
|
0.06
|
|
15,613
|
|
0.06
|
Adjusted Net Income
/ Adjusted EPS
|
|
$
46,143
|
|
$
0.17
|
|
$
44,437
|
|
$
0.17
|
Fiscal 2022 Guidance
Metric
|
Current
Guidance
|
Net
Revenue
|
$6.15 - $6.25
billion
|
Adjusted
EBITDA3
|
$630 - $645
million
|
Adjusted
EPS3
|
$0.97 -
$1.00
|
Capital Expenditures
|
$275 - $325 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 $76 million of
interest expense, a 26 percent tax rate and a 267 million weighted
average diluted share count. We have not reconciled Adjusted EBITDA
and Adjusted EPS outlook 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)
|
|
April 30,
2022
|
|
May 1,
2021
|
Net income
|
|
$
5,133
|
|
$
4,849
|
Depreciation
|
|
4,294
|
|
3,400
|
Income tax
expense
|
|
2,997
|
|
2,780
|
Foreign currency
gain
|
|
(64)
|
|
(145)
|
Interest expense,
net
|
|
1,196
|
|
1,128
|
EBITDA
|
|
$ 13,556
|
|
$ 12,012
|
50% of
EBITDA
|
|
$
6,778
|
|
$
6,006
|
(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.
|
(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 Health and Wellness Company, Inc.