Shares of Petco Health and Wellness Company, Inc. (NASDAQ: WOOF) plummeted 5.30% in pre-market trading on Friday, as investors reacted to a concerning financial analysis report. The report highlighted deteriorating trends in the company's return on capital employed (ROCE) and overall capital utilization.

According to the analysis, Petco's ROCE has fallen significantly from 2.7% five years ago to a mere 0.2% in the latest reporting period. This figure not only represents a substantial decline but also falls well below the Specialty Retail industry average of 13%. Adding to investors' concerns, the company is reportedly utilizing 24% less capital than before, even after a recent capital raise.

The combination of declining returns and reduced capital employment has raised red flags among analysts and investors. The report suggests that these trends could indicate a business potentially in decline, which may explain the sharp drop in Petco's stock price. Over the past three years, Petco's stock has already experienced a staggering 84% decline, and today's plummet suggests that market sentiment remains pessimistic about the company's future prospects.