WOOF

Petco($WOOF) CEO Bets $4.7M of Own Money Amid Stock Plunge and Bankruptcy Concerns

04/01/2025 23:21

Petco Health and Wellness Company's CEO Joel Anderson has made a substantial insider purchase, acquiring approximately 1.58 million shares worth about $4.7 million in late March. According to SEC filings, Anderson purchased around 736,547 shares at an average price of $2.91 per share on March 28, followed by an additional 849,541 shares at an average price of $3.03 on March 31. This represents his strongest vote of confidence since taking the helm as Petco's CEO in July 2024. Shares of $WOOF had already shown upward momentum before the disclosure of these purchases, surging 31.5% from $2.44 to $3.21 on March 27, before settling at $3.05 on March 31. This movement appears to be connected to the company's quarterly earnings announcement. The timing of Anderson's purchases is particularly noteworthy, coming immediately after Petco reported its fiscal 2025 fourth-quarter results on March 27. This suggests the CEO has strong conviction in the company's future trajectory. In that earnings report, Petco posted adjusted earnings of 2 cents per share, though revenue declined 7.3% year-over-year to $1.55 billion. Petco operates approximately 1,500 stores across the United States as a pet health and wellness products retailer, with a market capitalization of around $930 million, placing it in the small-cap category. The company raised $864 million in its third IPO in January 2021, but since then, its stock has plummeted nearly 90% from its IPO price. In October 2023, CreditRiskMonitor even raised concerns that Petco was approaching a potential Chapter 11 bankruptcy filing. Against this challenging backdrop, Joel Anderson, former CEO of Five Below, was appointed as Petco's CEO in July 2024. Anderson spent over a decade as Five Below's CEO, driving the company's growth, and previously served as a senior executive at Walmart. His decision to commit significant personal capital to Petco just eight months after taking the position has caught market attention. The pet industry has seen slowing growth in recent years following the post-COVID boom, and Petco faces fierce competition from online rivals like Amazon and Chewy. In July 2024, news broke that stock influencer Keith Gill, known as 'Roaring Kitty,' had acquired a 6.6% stake in competitor Chewy, sending ripples through the industry. Despite these challenges, Petco has shown some signs of improvement in recent results. While revenue declined, the company posted adjusted earnings of 2 cents per share for the quarter ending January 31, 2025, exceeding analysts' expectations of 1 cent. The average analyst view on the stock is 'hold,' with a median price target of $4.00, suggesting approximately 30% upside potential from the current price. However, this target is not significantly higher than the early-March price levels around $3. While the CEO's substantial purchase is likely to positively impact the stock in the short term, Petco still faces fundamental challenges—intensifying online competition, reduced consumer spending, and high debt levels. Nevertheless, Anderson's move signals a potential turning point for the company, and investors will be closely watching Petco's turnaround strategy and execution in the coming months.

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