Petco CEO Ron Coughlin has announced his departure from the company, and he will be replaced by R. Michael Mohan, an executive from Best Buy, as the interim chief executive. Coughlin will continue to support the leadership transition by serving as an advisor to the board. In a statement, Coughlin expressed pride in the work he has done over the past five years, stating that working with their partners during a period of significant change and growth has been an incredible opportunity.
Mohan, who has been on Petco’s board since March 2021, brings a highly successful track record in the retail industry and deep knowledge of Petco to his new role. He is a former chief operating officer and president of Best Buy, which makes him well-suited to ensure a seamless transition for Petco as it moves forward. Petco board member Cameron Breitner praised Mohan’s operational skills and stated that he is the ideal executive for this interim position.
Petco also reported its fiscal fourth-quarter results, which were in line with expectations. The company reported earnings per share of 2 cents, matching analysts’ expectations, and revenue of $1.67 billion, slightly higher than the expected $1.62 billion. However, Petco reported a net loss of $22.6 million for the quarter, compared to net income of $32.7 million in the same period last year. Sales rose by 6% to $1.67 billion.
Following the announcement of the CEO change and earnings report, Petco’s shares rose by as much as 9% in premarket trading. This positive response reflects investor confidence in the company’s ability to navigate through the challenges it has faced.
Coughlin’s decision to step down comes at a time when Petco’s market cap has declined over the past year despite consistent sales growth and comparable sales gains. The pet industry experienced a slowdown in demand after the initial surge in pet adoptions during the Covid-19 pandemic. While Petco and other retailers benefited from increased sales of pet supplies, the demand for high-margin items like beds, leashes, and toys has been sluggish.
During his tenure as CEO, Coughlin played a key role in transforming Petco into a health and wellness company. He eliminated the sale of unhealthy pet food, removed controversial products from the company’s offerings, and focused on expanding its services and veterinary business. Under his leadership, Petco became one of the largest pet health providers in the nation, operating 282 full-service hospitals.
The services business revenue of Petco saw a 17% jump during the quarter, but it still represents a small portion of the company’s overall revenue. The company’s investment in expanding its veterinary clinics has taken time to pay off, which has led to impatience among investors.
Mohan expressed his commitment to advancing Petco’s strategy and driving profitability through operational discipline and execution. He emphasized the importance of focusing on people, operations, and customer experience to achieve these goals.
As Petco continues its search for a permanent CEO, the company will rely on Mohan’s leadership to guide it through this transitional period. With his experience in the retail industry and knowledge of Petco, Mohan is well-positioned to steer the company towards future success.
