Shares of Petco Health and Wellness Company, Inc. (WOOF) soared 11.86% in after-hours trading on Wednesday, following the release of the company's fourth-quarter 2024 financial results and its outlook for 2025.

Despite missing analyst estimates, Petco's report showed signs of progress that appear to have encouraged investors. The company reported net revenue of $1.6 billion for the quarter, slightly below the consensus estimate of $1.56 billion. However, comparable sales increased by 0.5% year-over-year, indicating some improvement in the company's core business.

Petco's CEO, Joel Anderson, expressed confidence in the company's direction, stating, "Our results in the fourth quarter demonstrate the progress we've made to return Petco to retail operating excellence." He added, "While there is more work ahead, I am confident our new leadership team is well-positioned to build on this early momentum, deliver double-digit adjusted EBITDA improvement in 2025 and set the business up for sustainable profitable growth."

The company's outlook for fiscal year 2025 also seemed to resonate with investors. While Petco expects net revenue to be down in the low single digits year-over-year, it projects adjusted EBITDA to be between $375 million and $390 million, suggesting potential for improved profitability. This focus on operational efficiency and profitability appears to be a key factor driving the stock's after-hours rally.