Petco stock jumps after Reddit post despite disappointing quarterly figures

Despite weak quarterly figures, Petco's stock experienced an unexpected price surge following a post on Reddit.

9/13/2024, 9:11 AM
Eulerpool News Sep 13, 2024, 9:11 AM

The US pet supplies retailer Petco presented a disappointing second-quarter report this week. Both the company's revenues and profits fell short of market expectations. However, surprisingly, the stock recovered by nearly 33 percent to $4.08 on Wednesday – a development attributed to a post by the meme stock king Keith Gill, known as "Roaring Kitty," on Reddit.

Petco reported a loss of $0.09 per share in the second quarter, while revenue fell to $1.52 billion – slightly below the previous year's figure of $1.53 billion. Particularly disappointing was the weak performance in the core segment of accessories and pets, which shrank by 4.7 percent. At the same time, revenues in the consumables segment rose by 1.5 percent and in services by 3.1 percent. The negative business figures were also reflected in the forecasts for the current quarter: Petco expects an adjusted loss of up to $0.04 per share, exceeding market expectations.

Despite these weak numbers, the stock experienced an unexpected surge on Wednesday. The reason was a post by Keith Gill on Reddit, where he made a pun referencing Petco: "Woof is going wild. Who's with me?". This cryptic message was enough to capture the attention of many investors, similar to what Gill had done with GameStop in 2021.

**Petco CEO Joel Anderson Explained in a Conference Call on Wednesday That the Company Aims to Strengthen Cost Discipline and Improve Cash Flow. However, the Surge in the Stock Price is Likely Attributed More to the Meme Stock Movement Than the Management's Statements.**

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