Petco Health and Wellness Co Inc - Class A
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.66%.
Did WOOF Beat Earnings? Q2 2026 Results
Petco Health & Wellness delivered a profitability-driven beat in its fiscal second quarter, posting earnings per share of $0.05 against a consensus estimate of $0.02, a 120.26% positive surprise, even as revenue of $1.49 billion came in fractionally light of expectations and declined 2.3% year over year. The headline story was aggressive cost discipline and margin expansion: gross profit margin widened approximately 120 basis points to 39.3%, SG&A expenses fell to $542.30 million from $578.26 million, and adjusted EBITDA surged to $113.86 million with margin expanding to 7.6% from 5.5% a year ago, driving a swing to GAAP net income of $13.97 million from a prior-year loss of $24.82 million. CEO Joel Anderson pointed to a second consecutive quarter of execution against commitments, which supported a raised full-year adjusted EBITDA outlook of $385 million to $395 million, though full-year net sales guidance remains pointed toward a low single-digit decline. The improving operational picture arrives against a backdrop of pending shareholder litigation alleging prior misleading statements about growth sustainability, adding a layer of complexity to the recovery narrative.
- Gross profit margin expanded approximately 120 basis points to 39.3%
- Operating income improved $40.6 million year over year to $43.0 million
- Adjusted EBITDA increased $30.3 million to $113.9 million
- Adjusted EBITDA margin expanded to 7.6% from 5.5%
- SG&A expenses reduced year over year
- Strengthened economic model and improved retail operating fundamentals
“For the second quarter we once again delivered against our commitments, enabling us to raise our earnings outlook for the full year. The first half of this year established a solid foundation for our transformation as we continued to strengthen our economic model and improve retail operating fundamentals.”
Petco Health & Wellness CEO, on the earnings call
Forward Guidance & Outlook
Petco maintained its full-year fiscal 2025 net sales outlook of down low single digits year over year and raised its full-year Adjusted EBITDA guidance to $385 million to $395 million. Full-year net interest expense is expected at approximately $130 million, capital expenditures at $125 million to $130 million, depreciation & amortization at approximately $200 million, and net store closures of approximately 25. For Q3 2025, the company expects net sales down low single digits year over year with Adjusted EBITDA of $92 million to $94 million. The outlook assumes tariffs on U.S. imports from China and other countries remain at August 28, 2025 levels for the remainder of the year.
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Figures from SEC filings and company reports. Not investment advice.