Petco stock climbs higher on Q1 earnings, full-year guidance

Shares of Petco (WOOF) are trading higher Friday, after the company reported better-than-expected first-quarter results coupled with upbeat guidance on Wednesday, May 22. The pet health chain's strong financial performance has been further boosted by its anticipated return to positive free cash flow within the year.

Yahoo Finance's Julie Hyman and Jared Blikre break down the details.

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This post was written by Angel Smith

Video transcript

Let's talk about Petco shares getting a lift, the Pet Health and Wellness company posting a better than expected.

First quarter, Petco also expected to be free cash flow positive for fiscal 2024.

But what's interesting here is the company came out with this earnings report on Wednesday and the shares just keep going up here.

Um They're now up by about 12% year to date and there are, there is still a relatively high short, short interest in this company as a percentage of float, but it has gone down according to S3 partners, it's about 12% of float right now, but that might be partly responsible for this continued squeeze higher.

Yes.

And we've seen a number of stocks that have gotten crushed over the last few years really exhibit some strength.

You know, there is the meme phenomenon and Wolf arguably could be considered maybe one of a Memeish stock.

Uh If we go to the Wi Fi Interactive, I'll show you what happened year to date.

And here you can see with today they finally climb into the green.

I'll show you a line chart, you can see it a little bit better when I put a max chart on though, you can see still down 86%.

And that's why I'm saying after this route here, uh what happens, you know, if there's a 50 100% rally after a 90% drop.

Well, you're still about 80% down something along those lines.

I do have some commentary here.

Um This is from Evercore Pet Cos Petco first quarter results easily top these muted expectations.

But the real treat got that real treat was management's expectations for positive free cash flow in 2024.

So for a stock that's been beaten down and arguably has a harder time with higher interest rates, which is what we're talking about.

That positive free cash flow means a lot.

Yes, and it means a lot to the stock price today seemingly as well.