Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) Q3 2024 Results Conference Call December 5, 2024 4:30 PM ET

Company Participants

Lisa Stark - Senior Director of Communications
Joel Anderson - CEO
Brian LaRose - CFO

Conference Call Participants

Kaumil Gajrawala - Jefferies
Steven Shemesh - RBC Capital
Michael Lasser - UBS
Julio Marquez - Guggenheim
Lauren Ng - Morgan Stanley
Kendall Toscano - Bank of America

Operator

Good afternoon, and welcome to the Petco Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded.

I would now like to turn the conference over to Lisa Stark, Senior Director of Communications. Please go ahead.

Lisa Stark

Good afternoon, and thank you for joining Petco's Third Quarter 2024 Earnings Conference Call. In addition to the earnings release, there is a presentation available to download on our website at ir.petco.com, summarizing our results. On the call with me today are Joel Anderson, Petco's Chief Executive Officer; and Brian LaRose, Petco's Chief Financial Officer.

Before they begin, I'd like to remind everyone that on this call, we will make certain forward-looking statements which are subject to a number of risks and uncertainties that could cause actual results to differ materially from such statements. These risks and uncertainties include those set out in our earnings materials and SEC filings.

In addition, on today's call, we will refer to certain non-GAAP financial measures. Reconciliations of these measures can be found in our earnings release, presentation and SEC filings.

And finally, during the Q&A portion of today's call, we ask that you please keep to one question and one follow-up.

With that, let me turn it over to Joel.

Joel Anderson

Thank you, Lisa. Good afternoon, everyone, and thank you for joining us today. Our third quarter results came in slightly ahead of our expectations as we more effectively navigated a dynamic consumer environment and the actions we are taking to strengthen our retail fundamentals and drive cost out are beginning to take hold.

Revenue was $1.51 billion, up 1%, driven by consumables and services. Gross margin expanded 130 basis points to 38.1% and driven by progress on product cost management and improvements in services margin. Adjusted EBITDA was $81.2 million. While there is much more work to do, our improving results increase our conviction that we are on the right path as we position Petco to win. Throughout the quarter, I spent a significant amount of time meeting with teammates across the organization. I'm working alongside our associates and our pet care centers to visiting our distribution centers to hosting small group listening sessions at our support centers.