$WOOF Turnaround Seems Farfetch(ed)

The title of this post combines two popular retail stocks that continue to make investors say “woof.” Those are Petco and Farfetch. Let’s see why they’re back in focus. 👀

First is pet food retailer Petco Health & Wellness, which cut its full-year guidance after posting a third-quarter loss. ✂ī¸

Executives said they now expect full-year adjusted earnings per share of $0.08, down significantly from their summer guidance of $0.24 to $0.30 per share. Their EBITDA forecast also fell about 20% from a $460-$480 million range to $400 million. That’s despite the company expecting the same $6.15-$6.28 billion in revenues. 📊

CEO Ron Coughlin said the company is still navigating a challenging consumer environment. However, investors are running short on patience as the company’s turnaround looks less and less likely. Many are arguing that if it was unable to run a profitable, growing business when the environment was good, it’s unlikely they’ll be able to do so in a much more difficult one.

 $WOOF shares fell 29% to new all-time lows on this news. 👎

Petco, Chewy, and other pet-related retailers have struggled in a post-pandemic world. And many investors are looking elsewhere for opportunity. Even the online marketplace for pet care services, Rover Group, delivered paltry returns after being acquired by Blackstone for $2.3 billion. 💰

$ROVR shares rose 29% on the day, but its total return chart shows that it’s effectively returned nothing to investors who held on since its SPAC was established. Rough. 🙃

Nevertheless, we move on to luxury fashion and beauty product e-commerce company Farfetch, which is the second part of our title. 👜

The business and stock has struggled mightily since the pandemic, with investors hoping it would receive a lifeline soon. However, that hope was pulled away today after Cartier-owner Richemont said it does not see itself lending to or investing in the company further. It’s currently Farfetch’s top shareholder and was reportedly part of talks to help the company go private.

Additionally, the company surprised investors yesterday by saying it would not report third-quarter earnings as planned. Executives did not provide the market with a new date for investors to expect the report to be issued. 🤷

The combination of these announcements sent $FTCH shares plummeting another 54% to new all-time lows, as investors doubt its ability to turn the business around. 📉

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