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Petco Health and Wellness Co. delivered net revenue of $1.48 billion in the second quarter of 2022, up 3.2 percent versus prior year, company officials reported. The company’s second quarter ended July 30.

Petco added 325,000 net new customers in the quarter, Ron Coughlin, CEO of the San Diego-based company, reported during the company’s earnings call with investors on Aug. 22.

Recurring customer revenue grew by 54 percent year-over-year, driven by repeat delivery, insurance, top box and Vital Care members, Coughlin added. Total active Vital Care customers reached 282,000 in the quarter, he reported.

“The value of loyalty membership is significant, especially when combining Vital Care with our existing 1.6 million Grooming and Nutrition Perks members, we continue to increase visits and spend by almost 50 percent and 40 percent, respectively, year-over-year,” Coughlin said during the call.

“Demand for services has proved resilient delivering 13 percent year-over-year growth, translating to a robust 62 percent growth on a two-year basis, driven by strength in both grooming and our veterinary business,” he continued. “Services are such a differentiator versus online and max competitors and pet parents, who see the value in our training, veterinary services and grooming. They also act as a feeder for Petco into a broader health and wellness ecosystem, including OTC solutions, Rx food, Rx medicines and insurance. Specifically, our veterinary services, a strategic long-term growth driver and competitive moat for Petco.”

Fiscal Q2 2022 Operating Results:

Comparisons are second quarter of 2022 ended July 30 versus second quarter of 2021 ended July 31, 2021 unless otherwise noted.

Second quarter results reflect continued business and customer growth, and operational execution, while delivering on the promise of purpose driven performance, officials said.

  • Net revenue increased 3.2 percent to $1.48 billion driven by comparable sales growth of 3.8 percent
  • Net income decreased $61.7 million to $13.5 million or $0.05 per share, which was primarily impacted by a $55.4 million non-cash change in the fair value of one of the company’s investments and $10.9 million of integration-related costs incurred related to the buyout of the company’s veterinary joint venture, Thrive
  • Adjusted Net Income decreased $17.8 million to $49.7 million or $0.19 per share
  • Adjusted EBITDA decreased $13.1 million to $142.0 million

“Q2 marks our 15th consecutive growth quarter, demonstrating that Petco’s business and customers continue to grow, driven by the strength of our unique end-to-end health and wellness pet ecosystem,” Coughlin said in a statement. “Despite economic volatility, the pet category remains resilient and our 29,000 Petco partners remain focused on improving the lives of countless pets and pet parents, working together and tangibly executing against our strategic priorities—including further expansion of our vet network and capabilities, continued mix shift towards premium products, the addition of over a hundred experiential fresh and frozen pantries in pet care centers, and double-digit growth in recurring and loyalty customers.”

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