Inflation doesn’t appear to be going anywhere anytime soon. For investors, that means many companies could be due for some troubling earnings results this year as costs chip away at their profitability. But businesses that have the ability to increase their prices without worrying about a significant loss in sales could be some of the best companies to invest in right now.
One stock that likely falls into that category is Petco Health and Wellness (NASDAQ: WOOF). Pet care and food is something pet owners can’t do without. And CEO Ron Coughlin recently went so far as to tell investors that the business is resilient to both downturns in the economy and inflation.
Petco is coming off a record year where net sales of $5.8 billion rose 18% year over year. The quarter was the seventh straight one where Petco reported comparable sales growth that was in double-digits. It also marked 13th straight periods of positive growth overall. And Petco continues to see even more growth ahead. For the new fiscal year (when ends in January), the company expects to see another 6% to 8% in growth, potentially hitting $6.25 billion. And its adjusted per-share profit could reach $1.00 — up from $0.91 this past year.
In the past month, its shares have risen by 12% on the strong results and forecast. Petco stock currently trades at a forward price-to-earnings multiple of 20 and can be a great way for investors to add a safe growth stock to their portfolios for the long haul.