(Bloomberg) -- Petco Health & Wellness Co. said it’s going through an operational reset to boost its appeal with shoppers and better manage costs after the pet retailer’s quarterly results missed estimates.  

This includes making changes to its selection of brands. Petco “took out some brands that were slower-moving,” Chief Executive Officer Ron Coughlin in the company’s third quarter earning call, predicting this “should make our shelves more productive.” 

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He said the company will bring in nationally recognized value brands for pet food and treats amid strong growth in the category and a challenging environment in which consumers are pulling back. Petco has also closed unprofitable stores, he added. 

The company reported third-quarter sales of $1.49 billion, lower than analysts’ estimate of $1.51 billion, while the company’s loss per share, excluding some items, also missed market expectations.  

The shares fell as much as 23% in New York trading on Wednesday, pushing the stock’s year-to-date decline to almost 70%. For comparison, the Nasdaq Composite Index has gained almost 40% in 2023. 

Third-quarter results “were below our expectations and we are taking swift and decisive action to improve the performance of our business by broadening our appeal with customers and tightly managing costs and capital,” Coughlin said. 

In a note to clients, Baird analysts Peter S. Benedict and Justin Kleber said they’ll be watching to see whether “strategic pricing actions and the reintroduction of value-based brands” will drive shopper traffic. 

--With assistance from Rachel Phua.

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