Petco CEO, Chairman and board member Ron Coughlin stepped down from those roles Wednesday (March 13) and was succeeded by Interim CEO R. Michael (Mike) Mohan.
Coughlin will support the leadership transition as an advisor to the board, while the board has tapped a global executive search firm to help it find a permanent CEO, the pet care retailer said in a Wednesday press release.
“On behalf of the board, we are deeply grateful for Ron’s many contributions to Petco over the past five years,” Cameron Breitner, a member of the Petco board of directors, said in the release. “Ron was instrumental in establishing and growing many aspects of our 360-degree pet ecosystem, significantly increasing Petco’s revenues, and leading the company through its IPO while always putting our people first.”
The company’s interim CEO, Mohan, has served on the Petco board since March 2021 and as lead independent director since July 2021, according to the release. He is also a former president and chief operating officer of Best Buy, where he was responsible for global operations.
“Mike’s highly successful track record across multiple segments of the retail industry, deep knowledge of Petco and strong operational skills make him the ideal executive to ensure a seamless transition as Petco moves forward,” Breitner said in the release.
With Mohan’s appointment as interim CEO, he has stepped down from the board’s audit committee and from the lead independent director role, per the release.
With Coughlin’s departure from the board, the size of Petco’s board has been reduced from 11 to 10, the release said.
This announcement comes on the same day that Petco reported its fourth-quarter and full-year 2023 earnings, saying that its net revenue increased 6.1% year-over-year in the fourth quarter while its comparable sales declined 0.9%.
CNBC reported Wednesday that even while Petco has reported consistent sales growth and results that were in line with analysts’ expectations, Wall Street has grown impatient with the company’s moves, and the company’s market cap has dipped over the past year.
During a November earnings call, Coughlin said Petco was navigating a challenging consumer environment and working to improve the performance of its business.
In the Wednesday press release announcing the CEO transition, Mohan said: “I have a deep belief in our purpose and I look forward to working with the leadership team and our partners to continue strengthening our business, driving profitability through operational discipline and execution that will improve growth, drive margin and generate cash to create shareholder value.”
The gig economy and gaming industries have driven a rise in ad hoc transactions, payments made outside of regular invoicing and payroll. Businesses are relying on instant payments to streamline these transactions, which involve contractors, consumers and small businesses.
According to a PYMNTS Intelligence report, “Gigs and Games: How Instant Payments Are Gaining Ground for Ad Hoc Transactions,” a collaboration with Ingo Payments, with increased demand for efficiency and speed, instant payment systems are becoming a preferred solution, though obstacles to wider adoption remain.
Instant payments are gaining in popularity for ad hoc transactions, according to the report. With the demand for quicker and more efficient methods of payment, businesses are adopting real-time payment systems to facilitate faster transactions, reduce fraud risk and improve overall financial processes.
PYMNTS found 45% of all ad hoc payments made in July 2024 were sent via instant methods, a notable increase from 36% earlier in the year. Industries that rely heavily on nonrecurring payments, such as gaming and the gig economy, have seen the most significant uptake.
Larger companies are leading the adoption of instant payments for ad hoc transactions. Businesses with more than $1 billion in revenue are sending half of their ad hoc payments via instant rails, revealing a preference for speed and efficiency. Smaller companies, however, are lagging in adoption, with those earning between $50 million and $100 million turning to instant methods for just 34% of ad hoc payments. The delay in adoption among smaller enterprises is often linked to the high costs of integrating instant payment systems into their existing processes.
Despite this, the trend toward adopting instant payment methods is gaining momentum across the board. Many large enterprises view instant payments as the future standard for ad hoc transactions, especially in business models that no longer rely on recurring payees, such as contractors or freelance workers. But challenges persist in scaling this technology across industries of all sizes.
While instant payments offer considerable benefits, particularly in terms of speed, cost savings, and enhanced customer/vendor retention, the report shows businesses face obstacles in fully adopting them. For many enterprises, the cost of integrating real-time payment systems remains the primary barrier. According to the report, 35% of businesses cite integration costs as the biggest obstacle to adopting instant payments for ad hoc transactions.
Additionally, there is a digital divide, with industries like gaming and the gig economy leading the charge in adopting instant payment systems. But two-thirds of small and medium-sized businesses (SMBs), particularly those in industries with less digital momentum, are dealing with the costs and complexities of implementing these systems. Despite these challenges, businesses that do embrace instant payments could gain a competitive edge by securing customer and vendor loyalty, driving down transaction costs, and improving cash flow management.