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