Brothers and sisters of the casino, $WOOF is trading around $2.40–$2.50 with a market cap of roughly $700M on \~$6B revenue. This is the definition of a beaten-down, debt-soaked, post-SPAC/post-pandemic meme special.
From IPO highs near $30 it is down \~90%+. The stock is priced like the company is going to get eaten by chewy and amazon while the dogs watch. Perfect.
# The Thesis (maximum regard edition)
Pet people are regarded. They will spend money on their fur children even when they themselves are eating ramen. Petco has \~1,380 stores, grooming, vet services, and a real physical footprint that pure online players cannot fully replicate for services. Management has been busy doing the boring shit: closing shitty stores, cutting unprofitable sales, expanding margins, generating free cash flow, and actually paying down debt.
https://preview.redd.it/xg2y8k2m0xoh1.jpg?width=1664&format=pjpg&auto=webp&s=c2defe8e83587f86fd282d96c9f1141ab2c1dd02
This is not “set it and forget it and retire.” This is a speculative, high-beta, high-regard bet on operational progress continuing and the market eventually noticing the improving FCF and lower leverage. Size it like a lottery ticket or a leveraged recovery play, not like your retirement account.
https://preview.redd.it/1d0m2n9a1xoh1.png?width=1732&format=png&auto=webp&s=8c6ac68331d82d83601e4c7fbf29836d4d3f0014
And the most regarded part of all: they have an actual Italian chicken + carbonara pasta recipe… for dogs.
https://preview.redd.it/n413kyvf3xoh1.png?width=710&format=png&auto=webp&s=43d363c5c0419cec25a53e65ac53e7c91026d97c
Adding my position:
https://preview.redd.it/fbbsv52n4xoh1.png?width=537&format=png&auto=webp&s=b8d32143c51d957e5d16fbd2397915f1fafc01a4