Petco Health and Wellness Company Earnings Call Transcripts
Fiscal Year 2027
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Q1 saw a return to positive comps and improved profitability, driven by strong performance in consumables, services, and omnichannel. Full-year outlook and adjusted EBITDA guidance were reaffirmed, with ongoing focus on cost discipline, innovation, and cross-selling.
Fiscal Year 2026
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Q4 and FY25 results showed strong margin expansion, cash flow, and leverage improvement, with 2026 guidance targeting flat to modest sales growth and continued EBITDA gains. Strategic focus is on product innovation, services, omni-channel, and store experience, supported by a rebuilt leadership team.
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Q3 saw improved profitability, margin expansion, and strong free cash flow despite a 3.1% sales decline, as transformation initiatives and disciplined expense management took hold. Services led growth, and the outlook for 2026 is positive, with investments and a new membership program set to drive future gains.
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Q2 saw improved profitability with operating income up $41M and adjusted EBITDA up $30M, despite a 2.3% sales decline. Gross margin expanded 120+ bps, and full-year EBITDA guidance was raised. Strategic store focus and cost discipline drove results, while tariffs and macro risks remain.
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Q1 results exceeded profitability goals with gross margin and EBITDA expansion despite sales declines. Services led growth, operational improvements drove margin gains, and 2025 guidance was reiterated with manageable tariff exposure. Transformation initiatives and cost discipline remain central.
Fiscal Year 2025
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A multi-phased transformation is underway, with current focus on execution, margin improvement, and cultural change. Growth from 2026 will be driven by store experience, differentiated merchandise, scaled services, and omnichannel. Services and disciplined cost management are key competitive advantages.
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Q4 revenue was $1.55B with adjusted EBITDA of $96.1M, as the company focuses on margin expansion, cost control, and store optimization. 2025 guidance calls for low single-digit sales decline and $375–$390M in adjusted EBITDA, driven by operational improvements and disciplined capital allocation.
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Q3 revenue grew 1% to $1.51B, with gross margin up 130 bps and services revenue up 9%. Cost initiatives and operational improvements are driving margin gains, while guidance calls for further sequential growth in Q4 and positive free cash flow for the year.
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Q2 revenue declined slightly year-over-year, with growth in Services and Consumables offset by softness in discretionary categories. Profitability improvement and cost discipline are top priorities, with $150 million in run rate savings targeted by end of 2025.