SAN DIEGO, March 11, 2026 /PRNewswire/ -- Petco (NASDAQ:WOOF), the retailer "where the pets go" to find everything they need to live their best lives, today reported its fourth quarter and full year 2025 financial results.
"In fiscal 2025, we strengthened our leadership team and rebuilt the foundation of our economic model, enabling us to exceed our profitability goals," said Joel Anderson, Chief Executive Officer of Petco. "With that work largely complete, we are entering the next phase of our strategy focused on driving sustainable, profitable top‑line growth."
Anderson continued, "As we look ahead, we see significant opportunities across core consumables, supplies and services. We are confident that our focus on driving product newness and innovation as well as leveraging our differentiated, high touch store ecosystem will help us to grow market share. Our outlook reflects our strategic initiatives and assumes a return to positive comps in 2026."
Q4 2025 Overview
For the fourth quarter of 2025 compared to the fourth quarter of 2024:
Net sales of $1.5 billion decreased 2.4%; comparable sales decreased 1.6%.
Gross profit decreased 1.4% to $580.8 million and gross margin increased 37 basis points to 38.3%.
Operating income increased 83.2% to $31.9 million; operating margin increased 98 basis points to 2.1%.
Net loss of $2.6 million versus a loss of $13.8 million.
Adjusted EBITDA1 increased 10.6% to $106.3 million, well above the Company's outlook.
The Company closed 7 net stores, ending the year with 1,382 stores.
Full Year 2025 Overview
For the full year 2025 compared to the full year of 2024:
Net sales of $6.0 billion decreased 2.5%; comparable sales decreased 1.6%.
Gross profit decreased 0.8% to $2.3 billion and gross margin increased 66 basis points to 38.7%.
Operating income increased to $120.4 million from $7.1 million; operating margin increased 190 basis points to 2.0%.
Net income of $9.1 million, up from a loss of $101.8 million.
Adjusted EBITDA1 increased 21.3% to $408.2 million, above the Company's outlook.
Sabrina Simmons, Chief Financial Officer of Petco, added, "Petco once again delivered on our commitments while building a stronger foundation, improving profitability and cash generation through our economic model. These results enabled significant progress in achieving our goal of lowering our leverage ratio1 from 4.2X when we entered the year to 3X at the end of 2025. As we enter this next phase of growth, we see ongoing opportunity to improve our financial strength."
Full Year 2025 Balance Sheet and Cash Flow
Cash grew by $91.0 million to $256.7 million after voluntarily paying down $95.0 million in debt.
Inventory fell 9.7% versus the 2.5% decline in sales.
Cash from operations rose by $136.4 million or 76.8% to $314.1 million.
Free cash flow1 was $187.0 million, an increase of $137.3 million or 276.3% above last year.
Total secured debt was ~$1.5 billion, down from $1.595 billion last year.
The Company completed the refinancing of its debt on February 2, extending its maturities to 2031 and providing ample flexibility through a mix of fixed and floating rate instruments consisting of a $900 million variable rate term loan and $600 million fixed rate bond.
2026 Guidance
For fiscal 2026 and Q1, the Company is providing guidance as follows.
Full Year 2026 Outlook
FY 2026 Outlook*
Net Sales
Flat to up 1.5% year over year
Adjusted EBITDA1
$415 million to $430 million
Net Interest Expense
~$125 million
Capital Expenditures
~$140 million
Depreciation & Amortization
~$200 million
Net Store Closures
~15-20
First Quarter 2026 Outlook
Q1 2026 Outlook*
Net Sales
Down 1% to flat year over year
Adjusted EBITDA1
$92 million to $94 million
*Assumptions in the outlook include that economic conditions, currency rates and the tax and regulatory landscape remain generally consistent, and that current or planned tariffs on imports into the U.S. from other countries remain at March 11, 2026 levels. Additionally, our outlook assumes that fuel prices normalize by the end of the quarter. Adjusted EBITDA is a non-GAAP financial measure and has not been reconciled to the most comparable GAAP outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management's control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide outlook for the comparable GAAP measures. Forward-looking estimates of Adjusted EBITDA are made in a manner consistent with the relevant definitions and assumptions noted herein and in our filings with the Securities and Exchange Commission.
(1)
Adjusted EBITDA, Free Cash Flow, and Leverage Ratio are non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.
Earnings Conference Call Webcast Information: Management will host an earnings conference call on March 11, 2026 at approximately 4:30 PM Eastern Time to discuss the company's financial results. A live webcast of the conference call will be available on the company's Investor Relations page at https://ir.petco.com/news-and-events/events-and-presentations. A replay of the webcast will be available through the same link approximately two hours after the conference call.
About Petco:
We're proud to be "where the pets go" to find everything they need to live their best lives for more than 60 years, from their favorite meals and toys, to trusted supplies and expert support from people who get it, because we live it. We believe in the universal truths of pet parenthood, the boundless boops, missing slippers, late night zoomies and everything in between. And we're here for it. Every tail wag, every vet visit, every step of the way. We nurture the pet-human bond in the aisles of more than 1,500 Petco stores across the U.S., Mexico and Puerto Rico. Customers experience our exclusive selection of pet care products, services, expertise and membership offerings in stores and online at petco.com, and on the Petco app. In 1999, we founded Petco Love. Together, we support thousands of local animal welfare groups nationwide and have helped find homes for over 7 million animals through in-store adoption events.
Forward-Looking Statements:
This earnings release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not statements of historical fact, including, but not limited to, statements regarding our Q1 and full year 2026 outlook, operational reset of our business, our competitive positioning, profitability, cash generation through our economic model, expense leverage, operating margin expansion, cost action plans and associated cost-savings, our path to sustainable, profitable growth and our expectations regarding tariffs and associated impacts. Such forward-looking statements can generally be identified by the use of forward-looking terms such as "believes," "expects," "may," "intends," "will," "shall," "should," "anticipates," "opportunity," "illustrative," or the negative thereof or other variations thereon or comparable terminology. These statements are only predictions based on our current expectations and projections about future events and reflect our beliefs regarding such future events and do not represent historical facts or statements of current condition. Although Petco believes that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct or that any forward-looking results will occur or be realized. Nothing contained in this earnings release is, or should be relied upon as, a promise or representation or warranty as to any future matter, including any matter in respect of the operations or business or financial condition of Petco. All forward-looking statements are based on current expectations and assumptions about future events that may or may not be correct or necessarily take place and that are by their nature subject to significant uncertainties and contingencies, many of which are outside the control of Petco. Forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results or events to differ materially from the potential results or events discussed in the forward-looking statements, including, without limitation, those identified in this earnings release as well as the following: (i) increased competition (including from multi-channel retailers, mass and grocery retailers, and e-Commerce providers); (ii) reduced consumer demand for our products and/or services; (iii) our reliance on key vendors; (iv) our ability to attract and retain qualified employees; (v) risks arising from statutory, regulatory and/or legal developments; (vi) macroeconomic pressures in the markets in which we operate, including inflation, prevailing interest rates and the impact of tariffs; (vii) failure to effectively manage our costs; (viii) our reliance on our information technology systems; (ix) our ability to prevent or effectively respond to a data privacy or security breach; (x) our ability to effectively manage or integrate strategic ventures, alliances or acquisitions and realize the anticipated benefits of such transactions; (xi) economic or regulatory developments that might affect our ability to provide attractive promotional financing; (xii) business interruptions and other supply chain issues; (xiii) catastrophic events, political tensions, conflicts and wars (such as the ongoing conflicts in Ukraine and the Middle East), government shutdowns, health crises, and pandemics; (xiv) our ability to maintain positive brand perception and recognition; (xv) product safety and quality concerns; (xvi) changes to labor or employment laws or regulations; (xvii) our ability to effectively manage our real estate portfolio; (xviii) constraints in the capital markets or our vendor credit terms; (xix) changes in our credit ratings; (xx) impairments of the carrying value of our goodwill and other intangible assets; (xxi) our ability to successfully implement our operational adjustments, achieve the expected benefits of our cost action plans and drive improved profitability; (xxii) our ability to deliver sustainable, profitable growth and (xxiii) the other risks, uncertainties and other factors identified under "Risk Factors" in our most recent Annual Report on Form 10-K and elsewhere in Petco's Securities and Exchange Commission filings. The occurrence of any such factors could significantly alter the results set forth in these statements.
Petco cautions that the foregoing list of risks, uncertainties and other factors is not complete, and forward-looking statements speak only as of the date they are made. Petco undertakes no duty to update publicly any such forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.
PETCO HEALTH AND WELLNESS COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited and subject to reclassification)
13 Weeks Ended
52 Weeks Ended
January 31,2026
February 1,2025
January 31,2026
February 1,2025
Net sales:
Products
$ 1,259,226
$ 1,310,217
$ 4,936,323
$ 5,116,891
Services and other
255,902
241,913
1,025,144
999,571
Total net sales
1,515,128
1,552,130
5,961,467
6,116,462
Cost of sales:
Products
775,588
811,204
3,028,909
3,173,269
Services and other
158,770
151,666
627,486
618,791
Total cost of sales
934,358
962,870
3,656,395
3,792,060
Gross profit
580,770
589,260
2,305,072
2,324,402
Selling, general and administrative expenses
548,914
571,872
2,184,639
2,317,351
Operating income
31,856
17,388
120,433
7,051
Interest income
(2,223)
(1,278)
(6,305)
(3,714)
Interest expense
31,581
34,111
131,199
143,531
Loss on extinguishment and modification of debt
565
—
565
—
Other non-operating loss (income)
—
1,000
—
(4,800)
Income (loss) before income taxes and income from equity method investees
1,933
(16,445)
(5,026)
(127,966)
