Inflation continues to be the front and centre of all financial and economic debates these days. Still, Ron Coughlin says the pet industry is insulated from its horrors.
Pet industry was resilient during the great recession
According to the CEO of Petco Health and Wellness Company Inc (NASDAQ: WOOF), the pet category can withstand inflation and economic downturns. This evening on CNBC’s “Closing Bell”, he said:
Look at the great recession years ago, the pet industry was resilient through it. And once again, we’re seeing that there’s a relatively timeless trend towards more premium products, especially with millennials and Gen Zs, adopting the majority of pets. They’re upgrading even more.
Coughlin confirmed that Petco has been able to pass on the increase in input costs to its customers without taking a hit to its unit volumes.
CEO Coughlin’s remarks on the Petco stock price
Shares of Petco are still down about 20% from their high in November 2021, but the year-to-date performance of the stock, the chief executive added, was good enough relative to the broader market.
We’re focused on executing. So, we’ve had seven consecutive quarters of double-digit growth. Out of the top 50 retailers, there’s only three who’ve had seven such consecutive quarters. So, I like what Warren Buffett says that eventually the market will see intrinsic value.
Petco is up 5.0% from its IPO price, unlike 80% of the companies that went public in 2021. Its digital business is also better than a pure-play eCommerce player, CEO Coughlin concluded.
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