Pomerantz Law Firm Announces the Filing of a Class Action Against Petco Health and Wellness Company, Inc. and Certain Officers - WOOF

NEW YORK, July 12, 2025 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Petco Health and Wellness Company, Inc. ("Petco" or the "Company") (NASDAQ: WOOF) and certain officers.  The class action, filed in the United States District Court for the Southern District of California, and docketed under 25-cv-01667, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Petco securities between January 14, 2021 and June 5, 2025, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.

If you are an investor who purchased or otherwise acquired Petco securities during the Class Period, you have until August 29, 2025 to ask the Court to appoint you as Lead Plaintiff for the class.  A copy of the Complaint can be obtained at www.pomerantzlaw.com.   To discuss this action, contact Danielle Peyton at [email protected] or 646-581-9980 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased. 

[Click here for information about joining the class action]

Petco is a specialty retailer that offers a variety of pet products, services, and solutions, including consumable and non-consumable products via physical and digital stores and in-store veterinary and grooming services.  One of Petco's key business metrics is comparable sales—also referred to as same-store sales or "comp"—which measures the change in period-over-period net sales from physical locations and digital sites that have been open for the applicable period.

In the wake of the COVID-19 pandemic, Petco consistently touted the benefits of pandemic-related tailwinds on its growth and profitability, including comparable sales growth, as a result of increased rates of pet adoption, while also touting the purported sustainability of these tailwinds post-pandemic.  Additionally, at all relevant times, Petco consistently touted its transformation from a general pet retailer into a more health-focused pet company—particularly its ability to capitalize on ongoing purported "pet humanization" and "premiumization" trends.  According to Petco, these trends were driven by an increase in younger, more health-conscious consumers becoming pet owners, who were purportedly more prone to treat pets more like humans than property and, accordingly, invest more in healthy, premium pet products.  Petco represented that it was uniquely positioned to capitalize on the foregoing trends and drive sustainable, profitable growth based on its purported differentiated business strategy centered around, inter alia, healthy, premium pet foods containing no artificial ingredients.

However, contrary to Petco's representations, as pandemic-related tailwinds eventually abated, the Company's sales and profitability metrics began to plummet.  Specifically, as early as mid-2023, the Company's financial performance took a notable turn for the worse.

Notwithstanding the foregoing, Defendants continued to represent that Petco's business model centered around, inter alia, healthy and/or premium pet food products remained a viable and sustainable business strategy.  For example, in March 2023, Petco issued financial guidance for its fiscal full year ("FY") 2023, including adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") of $520 million to $540 million and adjusted earnings per share ("EPS") of $0.40 to $0.48.  Despite the Company's worsening financial condition, Defendants reaffirmed this guidance in May 2023.

The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding Petco's business, operations, and prospects.  Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Petco's pandemic-related tailwinds were unsustainable, as was its business model of selling primarily premium and/or high-grade pet food; (ii) accordingly, the strength of Petco's differentiated product strategy was overstated; (iii) Defendants downplayed the true scope and severity of the foregoing issues, the magnitude of changes needed to rectify those issues, and the likely negative impacts of their mitigation strategy on Petco's comparable sales metric; (iv) accordingly, Defendants overstated Petco's ability to deliver sustainable, profitable growth; and (v) as a result, Defendants' public statements were materially false and misleading at all relevant times.

On August 24, 2023, Petco issued a press release announcing its financial results for the second quarter of its FY 2023.  Therein, the Company negatively revised its FY 2023 adjusted EBITDA guidance to a range of $460 million to $480 million—down significantly from its prior guidance of $520 million to $540 million—and adjusted EPS guidance to a range of $0.24 to $0.30—down significantly from its prior guidance of $0.40 to $0.48.  In explaining the negatively revised guidance, Company management cited a "shift in consumer spending and pressures on our discretionary business[.]"

On this news, Petco's stock price fell $1.35 per share, or 20.64%, to close at $5.19 per share on August 24, 2023.

On November 29, 2023, Petco issued a press release announcing its financial results for the third quarter of its FY 2023.  Therein, the Company again negatively revised its fiscal FY 2023 adjusted EBITDA guidance to approximately $400 million—down significantly from its prior guidance of $460 million to $480 million—and adjusted EPS guidance to approximately $0.08—down significantly from its prior guidance of $0.24 to $0.30.  In the same press release, Company management revealed that Petco had broadened its product offerings to include "value"—i.e., cheaper, lower-quality—pet food brands in an effort to improve sales.

On this news, Petco's stock price fell $1.11 per share, or 28.91%, to close at $2.73 per share on November 29, 2023.

On March 13, 2024, Petco issued a press release announcing that Defendant Ronald V. Coughlin, Jr. had stepped down as Petco's Chief Executive Officer, Chairman, and member of the Company's Board of Directors (the "Board").

The same day, Petco issued another press release announcing its financial results for its fiscal fourth quarter and FY 2023, reporting, inter alia, that "[c]omparable sales declined 0.9 percent year over year" in the quarter, as well as a "GAAP net loss of $1.3 billion, or $(4.78) per share, which includes goodwill impairment of $1.2B[.]"  On a subsequent investor conference call held the same day, Company management acknowledged that Petco's business model focused on premium products was, in fact, not sustainable as it could not weather ongoing consumer preference trends towards cheaper goods for their pets.

Following these disclosures, Petco's stock price fell $0.50 per share, or 19.53%, over the following two trading sessions, to close at $2.06 per share on March 14, 2024.

On April 9, 2024, Petco filed a current report on Form 8-K with the United States Securities and Exchange Commission, disclosing that the Company's Board "approved the termination of employment of Darren MacDonald, the Company's Chief Customer Officer, effective as of April 12, 2024[.]"

On this news, Petco's stock price fell $0.04 per share, or 2.12%, to close at $1.85 per share on April 10, 2024.

On May 28, 2024, Petco issued a press release announcing further "changes to [its] leadership team [to] accelerate Petco's initiatives to drive retail excellence as we execute on our operational reset," including the departures of the Company's Chief Operating and Chief Merchandising and Supply Chain Officers.

On this news, Petco's stock price fell $0.29 per share, or 8.48%, to close at $3.13 per share on May 29, 2024.

On February 18, 2025, Petco issued a press release announcing that its then-Chief Financial Officer, Defendant Brian LaRose, had stepped down from this role.

On this news, Petco's stock price fell $0.04 per share, or 1.27%, to close at $3.10 per share on February 19, 2025.

Then, on June 5, 2025, Petco issued a press release announcing its financial results for the first quarter of its FY 2025, including, inter alia, a 1.3% year-over-year decline in comparable sales—much larger than the 0.6% decline estimated by Wall Street.  Multiple analysts also expressed concerns with Petco's diminishing comparable sales and market share in the wake of Defendants' profitability-focused turnaround plan.

On this news, Petco's stock price fell $0.84 per share, or 23.2%, to close at $2.78 per share on June 6, 2025.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.

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CONTACT:

Danielle Peyton

Pomerantz LLP

[email protected]

646-581-9980 ext. 7980

SOURCE Pomerantz LLP