Petco Health and Wellness Company, Inc. said CEO Ron Coughlin stepped down from his role after a quarter of moderate sales growth. He held the position since 2018, when he joined the pet retailer from HP Inc.

Petco tapped a global executive search firm to help find a new CEO, the retailer said March 13. In the meantime, R. Michael Mohan will serve as interim CEO. Mohan joined Petco’s Board of Directors in March 2021 and took on the role of Lead Independent Director in July 2021. He was previously president and chief operating officer of Best Buy.

“Petco is a powerful brand with an unparalleled offering that meets every need for pets, providing necessary products and services for these family members each day to support their health and wellness,” Mohan said in a written statement. “I have a deep belief in our purpose, and I look forward to working with the leadership team and our partners to continue strengthening our business, driving profitability through operational discipline and execution that will improve growth, drive margin and generate cash to create shareholder value. My focus will be on our people, our operations and our customer experience, working together to advance our strategy.”    

Coughlin will step down from the board and serve as an advisor during the leadership transition. Mohan will step down from his Lead Independent Director role and his position on the audit committee.

Petco is No. 92 in the Top 1000, which is Digital Commerce 360’s database ranking North America’s largest online retailers by their annual web sales. In the Top 1000, Digital Commerce 360 categorizes Petco as a Specialty retailer.

Petco Q4 results

Petco reported that net revenue increased 6.1% to $1.67 billion in its fiscal fourth quarter ended Feb. 3, 2024. However, comparable sales declined 0.9% year over year. The company reported a net loss of $22.6 million, compared to a loss of $32.7 million in the year-ago period.

For the full fiscal year, net revenue grew 3.6% to $6.26 billion. Comparable sales also increased, up 1.8%. Meanwhile, Petco reported a net loss of $1.28 billion for 2023. That compares to net income of $89.9 million in fiscal 2022. 

Petco’s interim CEO outlines problems

“I recognize we have not been executing the way we need to, in a number of areas, to deliver on our full potential,” Mohan said in a call with investors and analysts. “Most critically, we have not adapted quickly enough to recent changes in consumer preferences. First, we did not anticipate the magnitude of the shift to value in both our consumables and discretionary business. And second, we did not expect customers to pull back as quickly as they have, and for this duration, when spending on discretionary items.”

These factors led Petco customers to look for alternative options at its competitors, causing Petco to lose market share. That then impacted profitability, leading to a net loss in 2023 after posting positive results in 2022, Mohan said. 

“Our work here has already begun, with the reintroduction of value brands, in our consumable business, and adjusting our discretionary offering to provide more balanced price points,” Mohan said. He added that Petco will also focus on improving retail and online customer experiences and creating more effective marketing.

Petco earnings

For the fourth quarter ended Feb. 3, Petco reported:

• Net revenue increased 6.1% to $1.67 billion.
• Net loss was $22.6 million, compared to a loss of $32.7 million in the year-ago period.
• Comparable sales declined 0.9%.

For the fiscal year ended Feb. 3, Petco reported:

• Net revenue grew 3.6% to $6.26 billion. 
• Net loss was $1.28 billion, compared to net income of $89.9 million in fiscal 2022. 
• Comparable sales increased 1.8%.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. 

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