Petco Shareholders File Class Action Lawsuit Over Securities Fraud.

Petco Health and Wellness Company is facing a securities fraud class action lawsuit. The lawsuit, filed in the US District Court for the Southern District of California, covers investors who purchased Petco securities between January 14, 2021, and June 5, 2025. Bernstein Liebhard LLP is representing the plaintiffs, and investors who suffered losses are encouraged to contact the firm for more information.

Petco Health and Wellness Company, Inc. (NASDAQ: WOOF) is facing a securities fraud class action lawsuit. The lawsuit, filed in the US District Court for the Southern District of California, covers investors who purchased Petco securities between January 14, 2021, and June 5, 2025. Bernstein Liebhard LLP is representing the plaintiffs, and investors who suffered losses are encouraged to contact the firm for more information.

According to the lawsuit, Petco allegedly made false and misleading statements regarding its business, operations, and prospects. The complaint alleges that Petco overstated the material impact of its differentiated products and underplayed the challenges they could have on sales. The company also misrepresented its ability to provide sustainable growth and the true scope and severity of issues related to its business model. These representations were materially incorrect and misleading throughout the class period.

The lawsuit further alleges that Petco's pandemic-related tailwinds were unsustainable, and its business model of selling primarily premium and/or high-grade pet food was overstated. The company also downplayed the magnitude of changes needed to rectify these issues and the likely negative impacts of their mitigation strategy on Petco's comparable sales metric.

Petco's financial performance took a notable turn for the worse as early as mid-2023. Despite this, the company continued to represent that its business model remained a viable and sustainable strategy. For example, in March 2023, Petco issued financial guidance for its fiscal full year (FY) 2023, including adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $520 million to $540 million and adjusted earnings per share (EPS) of $0.40 to $0.48. Despite the worsening financial condition, Petco reaffirmed this guidance in May 2023.

On August 24, 2023, Petco negatively revised its FY 2023 adjusted EBITDA guidance to a range of $460 million to $480 million, down significantly from its prior guidance of $520 million to $540 million. Petco's stock price fell $1.35 per share, or 20.64%, on this news. Subsequent revisions and disclosures continued to negatively impact Petco's stock price, with the company reporting a GAAP net loss of $1.3 billion in its fourth quarter and FY 2023.

Investors who purchased or otherwise acquired Petco securities during the Class Period are encouraged to contact Bernstein Liebhard LLP to discuss their rights. The firm is seeking to recover damages caused by Petco's violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5.

References:

[1] https://www.prnewswire.com/news-releases/pomerantz-law-firm-announces-the-filing-of-a-class-action-against-petco-health-and-wellness-company-inc-and-certain-officers--woof-302496341.html