Shares of Petco Health and Wellness Company, Inc. (NASDAQ: WOOF) plummeted 10.77% in pre-market trading on Friday, as investors reacted to the company's disappointing first-quarter 2025 financial results and weak guidance for the second quarter. The sharp decline reflects growing concerns about the pet retailer's growth trajectory in a challenging economic environment.

Petco reported quarterly sales of $1.49 billion, slightly missing analyst estimates of $1.50 billion and marking a 2.3% decrease from the same period last year. More concerning was the 1.3% year-over-year decline in comparable sales, which was worse than expected. The company posted a net loss of $0.04 per share, meeting analyst expectations but failing to show improvement from the previous year. Adding to investor concerns, Petco provided a weak outlook for the second quarter of 2025, expecting Q2 net sales to decline in the low single digits year-over-year.

Despite these challenges, Petco reaffirmed its full-year 2025 outlook, maintaining a cautiously optimistic stance for the longer term. CEO Joel Anderson acknowledged the ongoing turnaround efforts, stating, "From your guys' perspective on the outside, you would say we haven't even started. You haven't seen it. But I'll tell you, inside, we're already beginning to identify several levers of growth." However, the market's negative reaction suggests that investors remain skeptical about the company's ability to navigate the current retail landscape and return to growth in the coming quarters.