Petco Health and Wellness Co Inc - Class A
Q1 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +4.45%.
Did WOOF Beat Earnings? Q1 2025 Results
Petco Health and Wellness posted a mixed first quarter, delivering meaningful bottom-line improvement while still falling short of Wall Street's expectations on both the top and bottom lines. The pet care retailer reported GAAP diluted EPS of negative $0.04 for the thirteen weeks ended May 3, 2025, missing the consensus estimate of negative $0.01 by 179.72%, even as the net loss narrowed sharply to $11.66 million from $46.48 million a year ago. Revenue slipped 2.3% year over year to $1.49 billion, edging just below the $1.50 billion consensus estimate. The headline driver of improvement was disciplined cost management; SG&A expenses fell 7% year over year to $553.61 million, helping operating income swing to a positive $16.36 million from a loss of $16.78 million in the prior-year period. Adjusted EBITDA climbed to $89.45 million from $75.64 million, with margin expanding to 6.0%. Despite the misses, Petco reaffirmed its full-year Adjusted EBITDA guidance of $375 million to $390 million, and management highlighted ongoing operational efficiencies and a planned membership program launch in 2026 as pillars of its broader turnaround strategy.
- Gross profit margin expanded approximately 30 basis points to 38.2% of net sales
- SG&A expenses declined 7% year over year
- Operating income improved $33.1 million year over year
- Adjusted EBITDA increased $13.8 million to $89.4 million
- Adjusted EBITDA margin expanded to 6.0% from 4.9%
- Comparable sales decreased 1.3% year over year
“We are pleased to deliver first quarter earnings results ahead of our guidance and to reaffirm our outlook for fiscal 2025 which now incorporates the impact of tariffs. This performance is a testament to the execution of our nearly 30,000 team members and the resilience of the category in which we operate.”
Petco Health & Wellness CEO, on the earnings call
Forward Guidance & Outlook
Petco reaffirmed its full-year fiscal 2025 outlook: net sales down low single digits year over year, Adjusted EBITDA of $375 million to $390 million, net interest expense of approximately $130 million, capital expenditures of $125 million to $130 million, and depreciation & amortization of approximately $200 million. For Q2 2025, the company expects net sales down low single digits year over year and Adjusted EBITDA of $92 million to $94 million. All guidance assumes current tariff levels on U.S. imports from China and other countries as of June 5, 2025 remain unchanged for the remainder of the year.
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Figures from SEC filings and company reports. Not investment advice.