woof-10q_20210731.htm
false Q2 0001826470 --01-29 true true true true P2Y us-gaap:OtherCurrentAssetsMember us-gaap:OtherCurrentAssetsMember 0001826470 2021-01-31 2021-07-31 xbrli:shares 0001826470 us-gaap:CommonClassAMember 2021-08-25 0001826470 woof:CommonClassBOneMember 2021-08-25 0001826470 woof:CommonClassBTwoMember 2021-08-25 iso4217:USD 0001826470 2021-07-31 0001826470 2021-01-30 0001826470 us-gaap:CommonClassAMember 2021-07-31 0001826470 us-gaap:CommonClassAMember 2021-01-30 0001826470 woof:CommonClassBOneMember 2021-07-31 0001826470 woof:CommonClassBOneMember 2021-01-30 0001826470 woof:CommonClassBTwoMember 2021-01-30 iso4217:USD xbrli:shares 0001826470 woof:CommonClassBTwoMember 2021-07-31 0001826470 2021-05-02 2021-07-31 0001826470 2020-05-03 2020-08-01 0001826470 2020-02-02 2020-08-01 0001826470 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-01-30 0001826470 us-gaap:CommonStockMember woof:CommonClassBOneMember 2021-01-30 0001826470 us-gaap:CommonStockMember woof:CommonClassBTwoMember 2021-01-30 0001826470 us-gaap:CommonStockMember 2021-01-30 0001826470 us-gaap:AdditionalPaidInCapitalMember 2021-01-30 0001826470 us-gaap:RetainedEarningsMember 2021-01-30 0001826470 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-30 0001826470 us-gaap:ParentMember 2021-01-30 0001826470 us-gaap:NoncontrollingInterestMember 2021-01-30 0001826470 us-gaap:AdditionalPaidInCapitalMember 2021-01-31 2021-05-01 0001826470 us-gaap:ParentMember 2021-01-31 2021-05-01 0001826470 2021-01-31 2021-05-01 0001826470 us-gaap:RetainedEarningsMember 2021-01-31 2021-05-01 0001826470 us-gaap:NoncontrollingInterestMember 2021-01-31 2021-05-01 0001826470 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-31 2021-05-01 0001826470 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-01-31 2021-05-01 0001826470 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-05-01 0001826470 us-gaap:CommonStockMember woof:CommonClassBOneMember 2021-05-01 0001826470 us-gaap:CommonStockMember woof:CommonClassBTwoMember 2021-05-01 0001826470 us-gaap:CommonStockMember 2021-05-01 0001826470 us-gaap:AdditionalPaidInCapitalMember 2021-05-01 0001826470 us-gaap:RetainedEarningsMember 2021-05-01 0001826470 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-05-01 0001826470 us-gaap:ParentMember 2021-05-01 0001826470 us-gaap:NoncontrollingInterestMember 2021-05-01 0001826470 2021-05-01 0001826470 us-gaap:AdditionalPaidInCapitalMember 2021-05-02 2021-07-31 0001826470 us-gaap:ParentMember 2021-05-02 2021-07-31 0001826470 us-gaap:RetainedEarningsMember 2021-05-02 2021-07-31 0001826470 us-gaap:NoncontrollingInterestMember 2021-05-02 2021-07-31 0001826470 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-05-02 2021-07-31 0001826470 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-05-02 2021-07-31 0001826470 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-07-31 0001826470 us-gaap:CommonStockMember woof:CommonClassBOneMember 2021-07-31 0001826470 us-gaap:CommonStockMember woof:CommonClassBTwoMember 2021-07-31 0001826470 us-gaap:CommonStockMember 2021-07-31 0001826470 us-gaap:AdditionalPaidInCapitalMember 2021-07-31 0001826470 us-gaap:RetainedEarningsMember 2021-07-31 0001826470 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-07-31 0001826470 us-gaap:ParentMember 2021-07-31 0001826470 us-gaap:NoncontrollingInterestMember 2021-07-31 0001826470 woof:MembersInterestMember 2020-02-01 0001826470 us-gaap:RetainedEarningsMember 2020-02-01 0001826470 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-02-01 0001826470 us-gaap:ParentMember 2020-02-01 0001826470 us-gaap:NoncontrollingInterestMember 2020-02-01 0001826470 2020-02-01 0001826470 woof:MembersInterestMember 2020-02-02 2020-05-02 0001826470 us-gaap:ParentMember 2020-02-02 2020-05-02 0001826470 2020-02-02 2020-05-02 0001826470 us-gaap:RetainedEarningsMember 2020-02-02 2020-05-02 0001826470 us-gaap:NoncontrollingInterestMember 2020-02-02 2020-05-02 0001826470 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-02-02 2020-05-02 0001826470 woof:MembersInterestMember 2020-05-02 0001826470 us-gaap:RetainedEarningsMember 2020-05-02 0001826470 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-05-02 0001826470 us-gaap:ParentMember 2020-05-02 0001826470 us-gaap:NoncontrollingInterestMember 2020-05-02 0001826470 2020-05-02 0001826470 woof:MembersInterestMember 2020-05-03 2020-08-01 0001826470 us-gaap:ParentMember 2020-05-03 2020-08-01 0001826470 us-gaap:RetainedEarningsMember 2020-05-03 2020-08-01 0001826470 us-gaap:NoncontrollingInterestMember 2020-05-03 2020-08-01 0001826470 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-05-03 2020-08-01 0001826470 woof:MembersInterestMember 2020-08-01 0001826470 us-gaap:RetainedEarningsMember 2020-08-01 0001826470 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-08-01 0001826470 us-gaap:ParentMember 2020-08-01 0001826470 us-gaap:NoncontrollingInterestMember 2020-08-01 0001826470 2020-08-01 woof:Segment 0001826470 us-gaap:CommonClassAMember 2021-01-19 2021-01-19 0001826470 us-gaap:CommonClassAMember 2021-01-19 0001826470 us-gaap:CommonClassAMember woof:ScoobyAggregatorLPMember 2021-06-01 2021-06-30 0001826470 us-gaap:CommonClassAMember woof:ScoobyAggregatorLPMember 2021-06-30 0001826470 us-gaap:AccountingStandardsUpdate201613Member 2021-07-31 0001826470 us-gaap:AccountingStandardsUpdate201815Member 2021-07-31 0001826470 woof:ConsumablesMember 2021-05-02 2021-07-31 0001826470 woof:ConsumablesMember 2020-05-03 2020-08-01 0001826470 woof:ConsumablesMember 2021-01-31 2021-07-31 0001826470 woof:ConsumablesMember 2020-02-02 2020-08-01 0001826470 woof:SuppliesAndCompanionAnimalsMember 2021-05-02 2021-07-31 0001826470 woof:SuppliesAndCompanionAnimalsMember 2020-05-03 2020-08-01 0001826470 woof:SuppliesAndCompanionAnimalsMember 2021-01-31 2021-07-31 0001826470 woof:SuppliesAndCompanionAnimalsMember 2020-02-02 2020-08-01 0001826470 woof:ServicesAndOtherMember 2021-05-02 2021-07-31 0001826470 woof:ServicesAndOtherMember 2020-05-03 2020-08-01 0001826470 woof:ServicesAndOtherMember 2021-01-31 2021-07-31 0001826470 woof:ServicesAndOtherMember 2020-02-02 2020-08-01 0001826470 woof:FirstLienTermLoanMember 2021-03-04 2021-03-04 0001826470 us-gaap:RevolvingCreditFacilityMember 2021-03-04 2021-03-04 0001826470 woof:FirstLienTermLoanMember 2021-03-04 0001826470 us-gaap:RevolvingCreditFacilityMember 2021-03-04 0001826470 woof:SeniorSecuredTermLoanFacilityMember 2021-01-29 2021-01-30 0001826470 woof:SeniorSecuredAssetBasedRevolvingCreditFacilityMember 2021-01-29 2021-01-30 0001826470 woof:SeniorSecuredTermLoanFacilityMember 2021-01-19 2021-01-19 xbrli:pure 0001826470 woof:FirstLienTermLoanMember us-gaap:BaseRateMember 2021-03-04 2021-03-04 0001826470 woof:FirstLienTermLoanMember us-gaap:LondonInterbankOfferedRateLiborSwapRateMember 2021-03-04 2021-03-04 0001826470 woof:FirstLienTermLoanMember us-gaap:BaseRateMember 2021-03-04 0001826470 woof:FirstLienTermLoanMember us-gaap:LondonInterbankOfferedRateLiborSwapRateMember 2021-03-04 0001826470 woof:SeniorSecuredTermLoanFacilityMember 2021-03-04 2021-03-04 0001826470 woof:FirstLienTermLoanMember 2021-07-31 0001826470 woof:SeniorSecuredTermLoanFacilityMember 2021-01-30 0001826470 woof:FirstLienTermLoanMember us-gaap:FairValueInputsLevel2Member 2021-07-31 0001826470 woof:SeniorSecuredTermLoanFacilityMember us-gaap:FairValueInputsLevel2Member 2021-01-30 0001826470 us-gaap:RevolvingCreditFacilityMember 2021-07-31 0001826470 woof:SeniorSecuredAssetBasedRevolvingCreditFacilityMember 2021-01-30 0001826470 us-gaap:RevolvingCreditFacilityMember 2021-01-31 2021-07-31 0001826470 us-gaap:BaseRateMember us-gaap:RevolvingCreditFacilityMember 2021-01-31 2021-07-31 0001826470 us-gaap:LondonInterbankOfferedRateLIBORMember us-gaap:RevolvingCreditFacilityMember 2021-01-31 2021-07-31 0001826470 us-gaap:LondonInterbankOfferedRateLIBORMember woof:LesserThanThirtyThreePointThreePercentageOfLineCapMember us-gaap:RevolvingCreditFacilityMember 2021-01-31 2021-07-31 0001826470 us-gaap:BaseRateMember woof:LesserThanThirtyThreePointThreePercentageOfLineCapMember us-gaap:RevolvingCreditFacilityMember 2021-01-31 2021-07-31 0001826470 us-gaap:LondonInterbankOfferedRateLIBORMember woof:LesserThanSixtySixPointSevenPercentageButGreaterThanOrEqualToThirtyThreePointOfLineCapMember us-gaap:RevolvingCreditFacilityMember 2021-01-31 2021-07-31 0001826470 us-gaap:BaseRateMember woof:LesserThanSixtySixPointSevenPercentageButGreaterThanOrEqualToThirtyThreePointOfLineCapMember us-gaap:RevolvingCreditFacilityMember 2021-01-31 2021-07-31 0001826470 us-gaap:LondonInterbankOfferedRateLIBORMember woof:GreaterThanOrEqualToSixtySixPointSevenPercentageOfLineCapMember us-gaap:RevolvingCreditFacilityMember 2021-01-31 2021-07-31 0001826470 us-gaap:BaseRateMember woof:GreaterThanOrEqualToSixtySixPointSevenPercentageOfLineCapMember us-gaap:RevolvingCreditFacilityMember 2021-01-31 2021-07-31 0001826470 woof:LesserThanThirtyThreePointThreePercentageOfLineCapMember srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2021-01-31 2021-07-31 0001826470 woof:LesserThanSixtySixPointSevenPercentageButGreaterThanOrEqualToThirtyThreePointOfLineCapMember srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2021-01-31 2021-07-31 0001826470 woof:LesserThanSixtySixPointSevenPercentageButGreaterThanOrEqualToThirtyThreePointOfLineCapMember srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2021-01-31 2021-07-31 0001826470 woof:GreaterThanOrEqualToSixtySixPointSevenPercentageOfLineCapMember srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2021-01-31 2021-07-31 0001826470 woof:LesserThanThirtyThreePointThreePercentageOfLineCapMember srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2021-01-31 2021-07-31 0001826470 woof:LesserThanSixtySixPointSevenPercentageButGreaterThanOrEqualToThirtyThreePointOfLineCapMember srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2021-01-31 2021-07-31 0001826470 woof:LesserThanSixtySixPointSevenPercentageButGreaterThanOrEqualToThirtyThreePointOfLineCapMember srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2021-01-31 2021-07-31 0001826470 woof:GreaterThanOrEqualToSixtySixPointSevenPercentageOfLineCapMember srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2021-01-31 2021-07-31 0001826470 woof:ActualDailyUtilizedPortionExceedsFiftyPercentageMember us-gaap:RevolvingCreditFacilityMember 2021-01-31 2021-07-31 0001826470 woof:UnsecuredFloatingRateSeniorNotesMember 2016-01-26 0001826470 woof:UnsecuredFloatingRateSeniorNotesMember 2016-01-26 2016-01-26 0001826470 woof:UnsecuredFloatingRateSeniorNotesMember 2021-01-31 2021-07-31 0001826470 woof:UnsecuredFloatingRateSeniorNotesMember us-gaap:LondonInterbankOfferedRateLIBORMember 2016-01-26 2016-01-26 0001826470 woof:UnsecuredFloatingRateSeniorNotesMember 2021-01-19 2021-01-19 0001826470 woof:NewSeriesNotesMember woof:ScoobyAggregatorLPMember 2021-01-19 2021-01-19 0001826470 woof:UnsecuredFloatingRateSeniorNotesMember woof:ScoobyAggregatorLPMember 2021-01-19 0001826470 woof:UnsecuredFloatingRateSeniorNotesMember woof:ScoobyAggregatorLPMember 2021-01-19 2021-01-19 0001826470 woof:ThreePercentageSeniorNotesMember 2016-01-26 2016-01-26 0001826470 woof:ThreePercentageSeniorNotesMember 2016-01-26 0001826470 woof:ThreePercentageSeniorNotesMember 2021-01-31 2021-07-31 0001826470 woof:ThreePercentageSeniorNotesMember 2019-04-06 2019-04-06 0001826470 woof:ThreePercentageSeniorNotesMember 2019-07-25 2019-07-25 0001826470 woof:ThreePercentageSeniorNotesMember 2020-02-03 2020-02-03 0001826470 woof:ThreePercentageSeniorNotesMember 2020-09-28 2020-09-28 0001826470 woof:ThreePercentageSeniorNotesMember 2019-04-06 0001826470 woof:ThreePercentageSeniorNotesMember 2021-01-19 2021-01-19 woof:Agreement 0001826470 2016-03-31 0001826470 us-gaap:LondonInterbankOfferedRateLIBORMember 2016-03-31 0001826470 2016-03-01 2016-03-31 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember 2021-07-31 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:MoneyMarketFundsMember 2021-07-31 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:MoneyMarketFundsMember 2021-07-31 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member woof:InvestmentsOfOfficersLifeInsuranceMember 2021-07-31 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member woof:InvestmentsOfOfficersLifeInsuranceMember 2021-07-31 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member woof:InvestmentsOfOfficersLifeInsuranceMember 2021-07-31 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member woof:NonQualifiedDeferredCompensationPlanMember 2021-07-31 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member woof:NonQualifiedDeferredCompensationPlanMember 2021-07-31 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member woof:NonQualifiedDeferredCompensationPlanMember 2021-07-31 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember 2021-01-30 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:MoneyMarketFundsMember 2021-01-30 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:MoneyMarketFundsMember 2021-01-30 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member woof:InvestmentsOfOfficersLifeInsuranceMember 2021-01-30 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member woof:InvestmentsOfOfficersLifeInsuranceMember 2021-01-30 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member woof:InvestmentsOfOfficersLifeInsuranceMember 2021-01-30 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member woof:NonQualifiedDeferredCompensationPlanMember 2021-01-30 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member woof:NonQualifiedDeferredCompensationPlanMember 2021-01-30 0001826470 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member woof:NonQualifiedDeferredCompensationPlanMember 2021-01-30 0001826470 us-gaap:CashAndCashEquivalentsMember 2021-07-31 0001826470 us-gaap:CashAndCashEquivalentsMember 2021-01-30 0001826470 woof:RestrictedCashMember us-gaap:OtherCurrentAssetsMember 2021-07-31 0001826470 woof:RestrictedCashMember us-gaap:OtherCurrentAssetsMember 2021-01-30 0001826470 us-gaap:OtherNonoperatingIncomeExpenseMember 2021-01-31 2021-07-31 0001826470 us-gaap:OtherNoncurrentAssetsMember woof:RoverGroupIncMember 2021-07-31 0001826470 woof:RestrictedStockUnitsRSUAndRestrictedStockAwardsMember 2021-05-02 2021-07-31 0001826470 woof:RestrictedStockUnitsRSUAndRestrictedStockAwardsMember 2020-05-03 2020-08-01 0001826470 woof:RestrictedStockUnitsRSUAndRestrictedStockAwardsMember 2021-01-31 2021-07-31 0001826470 woof:RestrictedStockUnitsRSUAndRestrictedStockAwardsMember 2020-02-02 2020-08-01 0001826470 us-gaap:EmployeeStockOptionMember 2021-05-02 2021-07-31 0001826470 us-gaap:EmployeeStockOptionMember 2020-05-03 2020-08-01 0001826470 us-gaap:EmployeeStockOptionMember 2021-01-31 2021-07-31 0001826470 us-gaap:EmployeeStockOptionMember 2020-02-02 2020-08-01 0001826470 us-gaap:EmployeeStockMember 2021-05-02 2021-07-31 0001826470 us-gaap:EmployeeStockMember 2020-05-03 2020-08-01 0001826470 us-gaap:EmployeeStockMember 2021-01-31 2021-07-31 0001826470 us-gaap:EmployeeStockMember 2020-02-02 2020-08-01 0001826470 woof:TwoThousandSixteenIncentivePlanMember 2021-05-02 2021-07-31 0001826470 woof:TwoThousandSixteenIncentivePlanMember 2020-05-03 2020-08-01 0001826470 woof:TwoThousandSixteenIncentivePlanMember 2021-01-31 2021-07-31 0001826470 woof:TwoThousandSixteenIncentivePlanMember 2020-02-02 2020-08-01 0001826470 woof:RestrictedStockUnitsRSUAndRestrictedStockAwardsMember woof:TwoThousandTwentyOneEquityIncentivePlanMember 2021-01-30 0001826470 woof:RestrictedStockUnitsRSUAndRestrictedStockAwardsMember woof:TwoThousandTwentyOneEquityIncentivePlanMember 2021-01-31 2021-07-31 0001826470 woof:RestrictedStockUnitsRSUAndRestrictedStockAwardsMember woof:TwoThousandTwentyOneEquityIncentivePlanMember 2021-07-31 0001826470 woof:TwoThousandTwentyOneEquityIncentivePlanMember us-gaap:EmployeeStockOptionMember 2021-01-30 0001826470 woof:TwoThousandTwentyOneEquityIncentivePlanMember us-gaap:EmployeeStockOptionMember 2021-01-31 2021-07-31 0001826470 woof:TwoThousandTwentyOneEquityIncentivePlanMember us-gaap:EmployeeStockOptionMember 2021-07-31 0001826470 us-gaap:CommonClassAMember srt:ExecutiveOfficerMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2021-03-01 2021-03-31 0001826470 us-gaap:CommonClassAMember srt:ExecutiveOfficerMember 2021-03-01 2021-03-31 0001826470 us-gaap:CommonClassAMember 2021-01-31 2021-07-31 0001826470 woof:TwoThousandSixteenIncentivePlanMember 2021-01-30 0001826470 woof:TwoThousandSixteenIncentivePlanMember 2021-01-31 2021-07-31 0001826470 woof:TwoThousandSixteenIncentivePlanMember 2021-07-31 0001826470 woof:TwoThousandSixteenIncentivePlanMember us-gaap:CommonClassAMember 2021-01-31 2021-07-31 0001826470 us-gaap:IPOMember us-gaap:CommonClassAMember 2020-02-02 2021-01-30

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2021

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 001-39878

 

Petco Health and Wellness Company, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

81-1005932

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

10850 Via Frontera

San Diego, California

92127

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (858453-7845

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock, par value $0.001 per share

 

WOOF

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     Yes  ☒    No  

The number of shares of Registrant’s Class A Common Stock outstanding as of August 25, 2021 was 226,491,943.

The number of shares of Registrant’s Class B-1 Common Stock outstanding as of August 25, 2021 was 37,790,781.

The number of shares of Registrant’s Class B-2 Common Stock outstanding as of August 25, 2021 was 37,790,781.

 

 

 

 


 

 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

2

 

 

 

Item 1.

Financial Statements (Unaudited)

2

 

Consolidated Balance Sheets

2

 

Consolidated Statements of Operations

3

 

Consolidated Statements of Comprehensive Income (Loss)

4

 

Consolidated Statements of Stockholders' / Members' Equity

5

 

Consolidated Statements of Cash Flows

6

 

Notes to Unaudited Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

Item 4.

Controls and Procedures

25

 

 

 

PART II.

OTHER INFORMATION

27

 

 

 

Item 1.

Legal Proceedings

27

Item 1A.

Risk Factors

27

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

27

Item 3.

Defaults Upon Senior Securities

27

Item 4.

Mine Safety Disclosures

27

Item 5.

Other Information

27

Item 6.

Exhibits

28

Signatures

29

 

 

1


 

 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

PETCO HEALTH AND WELLNESS COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

 

 

 

July 31,

2021

 

 

January 30,

2021

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

203,404

 

 

$

111,402

 

Receivables, less allowance for credit losses ($1,802 and $3,267, respectively)

 

 

39,889

 

 

 

41,827

 

Merchandise inventories, net

 

 

628,491

 

 

 

538,675

 

Prepaid expenses

 

 

41,990

 

 

 

40,032

 

Other current assets

 

 

30,381

 

 

 

45,613

 

Total current assets

 

 

944,155

 

 

 

777,549

 

Fixed assets

 

 

1,586,677

 

 

 

1,487,987

 

Less accumulated depreciation

 

 

(932,283

)

 

 

(860,440

)

Fixed assets, net

 

 

654,394

 

 

 

627,547

 

Operating lease right-of-use assets

 

 

1,314,533

 

 

 

1,328,108

 

Goodwill

 

 

2,182,465

 

 

 

2,179,310

 

Trade name

 

 

1,025,000

 

 

 

1,025,000

 

Other intangible assets

 

 

4,793

 

 

 

4,793

 

Less accumulated amortization

 

 

(4,251

)

 

 

(4,079

)

Other intangible assets, net

 

 

542

 

 

 

714

 

Other long-term assets

 

 

194,092

 

 

 

137,474

 

Total assets

 

$

6,315,181

 

 

$

6,075,702

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and book overdrafts

 

$

406,685

 

 

$

339,485

 

Accrued salaries and employee benefits

 

 

123,721

 

 

 

129,484

 

Accrued expenses and other liabilities

 

 

210,517

 

 

 

145,846

 

Current portion of operating lease liabilities

 

 

248,631

 

 

 

258,289

 

Current portion of long-term debt and other lease liabilities

 

 

20,235

 

 

 

2,203

 

Total current liabilities

 

 

1,009,789

 

 

 

875,307

 

Senior secured credit facilities, net, excluding current portion

 

 

1,646,463

 

 

 

1,646,281

 

Operating lease liabilities, excluding current portion

 

 

1,070,063

 

 

 

1,083,575

 

Deferred taxes, net

 

 

293,611

 

 

 

280,920

 

Other long-term liabilities

 

 

135,873

 

 

 

134,354

 

Total liabilities

 

 

4,155,799

 

 

 

4,020,437

 

Commitments and contingencies (Notes 3, 4 and 8)

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Class A common stock, $0.001 par value: Authorized - 1.0 billion shares;

    Issued and outstanding - 226.5 million shares as of July 31, 2021

    and 226.4 million shares as of January 30, 2021

 

 

226

 

 

 

226

 

Class B-1 common stock, $0.001 par value: Authorized - 75.0 million shares;

    Issued and outstanding - 37.8 million shares

 

 

38

 

 

 

38

 

Class B-2 common stock, $0.000001 par value: Authorized - 75.0 million shares;

    Issued and outstanding - 37.8 million shares

 

 

 

 

 

 

Preferred stock, $0.001 par value: Authorized - 25.0 million shares;

    Issued and outstanding - none

 

 

 

 

 

 

Additional paid-in-capital

 

 

2,115,220

 

 

 

2,092,110

 

Retained earnings (accumulated deficit)

 

 

60,420

 

 

 

(22,251

)

Accumulated other comprehensive loss

 

 

(1,272

)

 

 

(1,275

)

Total stockholders’ equity

 

 

2,174,632

 

 

 

2,068,848

 

Noncontrolling interest

 

 

(15,250

)

 

 

(13,583

)

Total equity

 

 

2,159,382

 

 

 

2,055,265

 

Total liabilities and equity

 

$

6,315,181

 

 

$

6,075,702

 

 

See accompanying notes to consolidated financial statements.

2


 

PETCO HEALTH AND WELLNESS COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts) (Unaudited)

 

 

 

 

Thirteen weeks ended

 

 

Twenty-six weeks ended

 

 

 

July 31,

2021

 

 

August 1,

2020

 

 

July 31,

2021

 

 

August 1,

2020

 

Net sales

 

$

1,434,534

 

 

$

1,208,971

 

 

$

2,849,528

 

 

$

2,322,492

 

Cost of sales

 

 

835,124

 

 

 

679,218

 

 

 

1,653,133

 

 

 

1,326,457

 

Gross profit

 

 

599,410

 

 

 

529,753

 

 

 

1,196,395

 

 

 

996,035

 

Selling, general and administrative expenses

 

 

525,942

 

 

 

464,706

 

 

 

1,075,178

 

 

 

914,623

 

Operating income

 

 

73,468

 

 

 

65,047

 

 

 

121,217

 

 

 

81,412

 

Interest income

 

 

(13

)

 

 

(99

)

 

 

(34

)

 

 

(283

)

Interest expense

 

 

19,206

 

 

 

54,493

 

 

 

39,735

 

 

 

115,301

 

Loss on extinguishment and modification of debt

 

 

 

 

 

 

 

 

20,838

 

 

 

 

Other non-operating income

 

 

(45,162

)

 

 

 

 

 

(45,162

)

 

 

 

Income (loss) before income taxes and income

   from equity method investees

 

 

99,437

 

 

 

10,653

 

 

 

105,840

 

 

 

(33,606

)

Income tax expense (benefit)

 

 

27,011

 

 

 

4,958

 

 

 

29,690

 

 

 

(5,597

)

Income from equity method investees

 

 

(2,429

)

 

 

(745

)

 

 

(4,854

)

 

 

(1,077

)

Net income (loss)

 

 

74,855

 

 

 

6,440

 

 

 

81,004

 

 

 

(26,932

)

Net loss attributable to noncontrolling interest

 

 

(256

)

 

 

(1,001

)

 

 

(1,667

)

 

 

(3,205

)

Net income (loss) attributable to Class A and B-1

   common stockholders

 

$

75,111

 

 

$

7,441

 

 

$

82,671

 

 

$

(23,727

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per Class A and B-1 common share (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.28

 

 

$

0.04

 

 

$

0.31

 

 

$

(0.11

)

Diluted

 

$

0.28

 

 

$

0.04

 

 

$

0.31

 

 

$

(0.11

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in computing net

    income (loss) per Class A and B-1 common share (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

264,216

 

 

 

209,015

 

 

 

264,216

 

 

 

209,015

 

Diluted

 

 

265,217

 

 

 

209,015

 

 

 

265,123

 

 

 

209,015

 

 

(1)

Amounts for periods prior to the Company’s conversion to a Delaware corporation have been retrospectively adjusted to give effect to the organizational transactions described in Note 1. See Note 7 for further discussion.

 

See accompanying notes to consolidated financial statements.

3


 

PETCO HEALTH AND WELLNESS COMPANY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands) (Unaudited)

 

 

 

Thirteen weeks ended

 

 

Twenty-six weeks ended

 

 

 

July 31,

2021

 

 

August 1,

2020

 

 

July 31,

2021

 

 

August 1,

2020

 

Net income (loss)

 

$

74,855

 

 

$

6,440

 

 

$

81,004

 

 

$

(26,932

)

Net loss attributable to noncontrolling interest

 

 

(256

)

 

 

(1,001

)

 

 

(1,667

)

 

 

(3,205

)

Net income (loss) attributable to Class A and B-1

   common stockholders

 

 

75,111

 

 

 

7,441

 

 

 

82,671

 

 

 

(23,727

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

789

 

 

 

281

 

 

 

3

 

 

 

(4,689

)

Unrealized loss on derivatives

 

 

 

 

 

(9

)

 

 

 

 

 

(61

)

Losses on derivatives reclassified to income

 

 

 

 

 

2,021

 

 

 

 

 

 

3,749

 

Total other comprehensive income (loss), net of tax

 

 

789

 

 

 

2,293

 

 

 

3

 

 

 

(1,001

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss)

 

 

75,644

 

 

 

8,733

 

 

 

81,007

 

 

 

(27,933

)

Comprehensive loss attributable to noncontrolling

   interest

 

 

(256

)

 

 

(1,001

)

 

 

(1,667

)

 

 

(3,205

)

Comprehensive income (loss) attributable to Class A and

   B-1 common stockholders

 

$

75,900

 

 

$

9,734

 

 

$

82,674

 

 

$

(24,728

)

 

See accompanying notes to consolidated financial statements.

4


 

PETCO HEALTH AND WELLNESS COMPANY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ / MEMBERS’ EQUITY

(In thousands) (Unaudited)

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members’

interest (1)

 

 

Class

A

(shares)

 

 

Class

B-1

(shares)

 

 

Class

B-2

(shares)

 

 

Amount

 

 

Additional paid-in capital

 

 

(Accumulated

deficit) retained earnings (1)

 

 

Accumulated

other

comprehensive

loss

 

 

Total

stockholders’

equity

 

 

Noncontrolling

interest

 

 

Total

equity

 

Balance at January 30, 2021

 

$

 

 

 

226,424

 

 

 

37,791

 

 

 

37,791

 

 

$

264

 

 

$

2,092,110

 

 

$

(22,251

)

 

$

(1,275

)

 

$

2,068,848

 

 

$

(13,583

)

 

$

2,055,265

 

Equity-based compensation expense

   (Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,604

 

 

 

 

 

 

 

 

 

11,604

 

 

 

 

 

 

11,604

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,560

 

 

 

 

 

 

7,560

 

 

 

(1,411

)

 

 

6,149

 

Foreign currency translation

   adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(786

)

 

 

(786

)

 

 

 

 

 

(786

)

Issuance of restricted stock awards

 

 

 

 

 

55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at May 1, 2021

 

$

 

 

 

226,479

 

 

 

37,791

 

 

 

37,791

 

 

$

264

 

 

$

2,103,714

 

 

$

(14,691

)

 

$

(2,061

)

 

$

2,087,226

 

 

$

(14,994

)

 

$

2,072,232

 

Equity-based compensation expense

   (Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,506

 

 

 

 

 

 

 

 

 

11,506

 

 

 

 

 

 

11,506

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

75,111

 

 

 

 

 

 

75,111

 

 

 

(256

)

 

 

74,855

 

Foreign currency translation

   adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

789

 

 

 

789

 

 

 

 

 

 

789

 

Issuance of common stock

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at July 31, 2021

 

$

 

 

 

226,491

 

 

 

37,791

 

 

 

37,791

 

 

$

264

 

 

$

2,115,220

 

 

$

60,420

 

 

$

(1,272

)

 

$

2,174,632

 

 

$

(15,250

)

 

$

2,159,382

 

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members’

interest (1)

 

 

Class

A

(shares)

 

 

Class

B-1

(shares)

 

 

Class

B-2

(shares)

 

 

Amount

 

 

Additional paid-in capital

 

 

Accumulated

deficit (1)

 

 

Accumulated

other

comprehensive

loss

 

 

Total

members’

equity

 

 

Noncontrolling

interest

 

 

Total

equity

 

Balance at February 1, 2020

 

$

1,358,130

 

 

 

 

 

 

 

 

 

 

 

$

 

 

$

 

 

$

(780,466

)

 

$

(8,273

)

 

$

569,391

 

 

$

(8,330

)

 

$

561,061

 

Equity-based compensation expense

   (Note 7)

 

 

2,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,305

 

 

 

 

 

 

2,305

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,168

)

 

 

 

 

 

(31,168

)

 

 

(2,204

)

 

 

(33,372

)

Foreign currency translation

   adjustment, net of tax