Petco Health and Wellness (NYSE:WOOF) saw its stock slide more than 12% as American consumers spend less money on their pets.
The retailer, in its quarterly results, revealed a 9.4% decline in its supplies and companion animal segment, whilst reporting at group level a US$14.6 million loss for the three-month period.
Revenue nevertheless was up 3.4% overall, and at $1.53 billion was ahead of analyst forecasts of $1.52 billion.
Comparable store sales improved 3.2%, outpacing expectations of 2.3%.
Looking ahead, however, Petco aims to cut costs by $150 million and has downgraded guidance for the rest of 2023.
"With discretionary spending continuing to be pressured, we’re taking numerous strategic actions to strengthen our business,” said chief executive Ron Coughlin.
Petco now expects full-year revenue between $6.150 billion to $6.275 billion, shy of current market consensus which was pitched at $6.279 billion.
Full-year earnings are now forecast by the company between 24 to 30 cents, substantially lower than prevailing market estimates of 42 cents.
In New York, Petco stock was down just over 12% in premarket at $5.75 per share.