Shares of Petco Health and Wellness Company, Inc. (WOOF) tumbled 5.25% in after-hours trading on Thursday following the release of its first-quarter 2025 financial results and second-quarter guidance. The pet retailer's performance fell short of market expectations, raising concerns about its growth trajectory in a challenging economic environment.

Petco reported a 2.3% year-over-year decrease in net sales for Q1 2025, with comparable sales declining by 1.3%. The company's quarterly loss narrowed to $0.04 per share from $0.17 a year earlier, meeting analyst expectations. However, the top-line revenue of $1.49 billion missed the consensus estimate of $1.50 billion.

Adding to investor concerns, Petco provided a cautious outlook for the second quarter of 2025, projecting net sales to decline in the low single digits year-over-year. The company also expects Q2 adjusted EBITDA to be between $92 million and $94 million. Despite these near-term challenges, Petco reaffirmed its full-year 2025 outlook, signaling confidence in its long-term strategy. The market's negative reaction suggests that investors may be skeptical about the company's ability to navigate the current retail landscape and return to growth in the coming quarters.