Stock Story -
What Happened: Shares of pet-focused retailer Petco (NASDAQ:WOOF) jumped 29.9% in the morning session after the company reported first quarter results that blew past analysts' EPS expectations. Next quarter's revenue, adjusted EBITDA, and earnings guidance were roughly in line with Wall Street's estimates, showing that the company remains on track with no surprises. Zooming out, this was a solid quarter that should please shareholders.
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What is the market telling us: Petco's shares are somewhat volatile and over the last year have had 48 moves greater than 5%. But moves this big are very rare even for Petco and that is indicating to us that this news had a significant impact on the market's perception of the business.
The previous big move we wrote about was 7 days ago, when the stock gained 22.4% on the news that the company announced the appointment of Glenn Murphy as Executive Chairman of the Board of Directors. He is also expected to lead the Board of Directors' ongoing search for a permanent Chief Executive Officer. Following the appointment, Murphy purchased 1,470,589 shares of Petco's Class A common stock for approximately $2.5 million.
Petco is down 9.3% since the beginning of the year, and at $2.86 per share it is trading 71.9% below its 52-week high of $10.18 from May 2023. Investors who bought $1,000 worth of Petco's shares at the IPO in January 2021 would now be looking at an investment worth $97.45.
