Dive Brief:

• Petco Health and Wellness appointed Sabrina Simmons as the pet retailer’s new CFO, replacing Brian LaRose, who has held the position since 2021, with the change effective Monday according to a Tuesday press release. Simmons, who resigned from the company’s board to take its financial reins, previously held various senior finance roles at clothing retailer Gap for over a decade, including serving as CFO from 2008 to 2017, according to a Tuesday securities filing. 
• The CFO switch and two other executive hires were made to support “a faster return to profitable growth,” the company said. Petco also named Michael Romanko, formerly with Five Below, as its chief customer and product officer, and Jack Stout, formerly chief marketing officer at the convenience store chain 7-Eleven, to become its chief marketing officer, according to the release, effective Feb. 24.  
• The “appointments represent a significant evolution of Petco's leadership team that brings robust retail expertise to help accelerate initiatives we're undertaking to strengthen our retail fundamentals, drive profit improvement and return us to growth," CEO Joel Anderson said in the release. "Sabrina, Michael and Jack are seasoned leaders with proven track records, who will further help us unlock value for our customers, partners and shareholders."

Dive Insight:

Simmons, 61, is joining San Diego-based company Petco roughly six months after it scooped up Anderson, formerly CEO of Five Below, as its new chief executive, CFO Dive sister publication Retail Dive previously reported.

In a Wednesday note, Wedbush analysts led by Seth Basham said they do not believe the CFO change and LaRose’s exit raises any concern about the company’s Q4 results or its financial health. “Rather, when taken in context with other just announced hires, we believe the CFO change reflects CEO Joel Anderson putting his team into place to execute his existing strategy,” the report states. Further, the analysts asserted Simmons’ retail turnaround and treasury experience are a good fit with Petco as it executes its “back-to-basics retail approach to improve profitability, shore up its balance sheet and drive free cash flow.”  

In the most recent quarterly earnings report for the fiscal Q3 ended Nov. 2, the company saw some year-over-year improvement, with a GAAP net loss of $16.7 million in the period, compared to a GAAP net loss of $1.2 billion in the prior year. It also reported net revenue rose 1.2% year-over-year to $1.51 billion. The company’s shares have fallen about 18% year-to-date. 

The company’s new CFO is a veteran finance leader with more than 20 years of executive-level financial experience, who has served as both a member of the Petco board and as audit chair since 2021. She currently also is on the board of the Columbia Sportswear Company and Coursera, an online learning platform. As an executive at Gap she supported “multi-year operational transformation which delivered significant margin expansion,” according to the release. 

Simmons’ compensation will include an annual base salary of $840,000, and a target annual bonus of 100% of that salary, according to the filing. Her offer letter also details an initial equity award grant of restricted stock units and a target value of at least $2.5 million which vests over three years, and she will be eligible for a $2 million annual equity award.

The company did not immediately respond to requests for comment.