US Market News
1月前
Petco Reports First Quarter 2026 ResultsJune 3, 2026 4:05 PM
PR Newswire (US) Returns to Positive Comp Growth in Q1, Validating 'Reach for the Sky' Initiatives
Delivers Q1 Sales and Profitability Ahead of Previously Provided Outlook
Reaffirms Fiscal 2026 Outlook and Provides 2Q Outlook*SAN DIEGO, June 3, 2026 /PRNewswire/ -- Petco (Nasdaq: WOOF), the retailer "where the pets go" to find everything they need to live their best lives, today reported its first quarter 2026 financial results. https://ir.petco.com/ (PRNewsfoto/Petco Health and Wellness Company, Inc.)" alt="Petco Health + Wellness Company, Inc. Logo https://ir.petco.com/ (PRNewsfoto/Petco Health and Wellness Company, Inc.)"/> "Our strong first-quarter results, highlighted by positive comparable sales and profitability that exceeded our outlook, provide clear, early validation that our Phase 3 'Reach for the Sky' strategy is working. We were particularly pleased to see the improvement in our consumables business, while our differentiated services business continues to outperform and is a key engine of our growth. This solid start to the year demonstrates the power of our distinct, wholly owned omnichannel ecosystem. As we look ahead, we are pleased with the momentum our initiatives are generating, positioning us to continue to deliver positive comps. We remain highly confident in our ability to drive consistent, long-term growth," said Joel Anderson, Chief Executive Officer of Petco.Q1 2026 OverviewFor the first quarter of 2026 compared to the first quarter of 2025:Net sales of $1.5 billion increased 0.2%; comparable sales increased 0.7%.Gross profit increased to $574.4 million; gross margin rate increased 21 basis points to 38.4%. Operating income increased 50.5% to $24.6 million; operating margin increased 55 basis points to 1.6%.Net loss of $15.1 million versus a net loss of $11.7 million.Adjusted EBITDA2 of $97.3 million versus $89.4 million.The Company closed 4 net stores, ending the quarter with 1,378 stores.Sabrina Simmons, Chief Financial Officer of Petco, added, "Our strong first-quarter results—which marked a return to positive comparable sales growth—demonstrate that our operational and economic improvements are materializing. We are pleased to reaffirm our full-year outlook. As our strategic initiatives continue to take hold, we continue to be focused on strengthening our retail and financial fundamentals to support sustainable, profitable growth and remain committed to reducing our leverage ratio to 2x."1Q1 2026 Balance Sheet and Cash Flow Ending cash balance grew by $33.5 million to $166.8 million versus $133.3 million last year.Inventory fell 1.9% year-over-year versus the 0.2% increase in net sales.Cash used in operating activities was $31.0 million compared to $15.5 million last year.Free cash flow2 was an outflow of $69.1 million versus an outflow of $43.9 million last year. Total debt was $1.482 billion, down from $1.593 billion last year.2026 OutlookThe company reaffirmed its full year 2026 net sales and EBITDA outlook and provided its outlook for the second quarter of 2026.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 China and other countries as of June 3, 2026, will remain at current levels. Additionally, our outlook assumes the benefit of a partial IEEPA tariff refund received in May 2026, with no additional refunds assumed for the balance of the year, and now assumes that fuel prices remain elevated at approximately those experienced in the first quarter for the remainder of the year, compared to our prior outlook which assumed higher fuel prices for the first quarter only.With respect to the second quarter specifically, the benefit of the tariff refund received in May 2026 is expected to be approximately offset by incremental tariffs and higher fuel costs anticipated in the period. The prior-year second quarter included an approximately $9 million SG&A benefit from a favorable semi-annual actuarial true-up related to employee optimization work, which the Company does not expect to recur in the second quarter of 2026.Full Year 2026 Outlook
FY 2026 Outlook* Net SalesFlat to up 1.5% year over year Adjusted EBITDA2$415 million to $430 million Net Interest Expense~$125 million Capital Expenditures~$140 million Depreciation & Amortization~$200 million Net Store Closures~15-20Second Quarter 2026 Outlook
Q2 2026 Outlook* Net Sales 3Up about 0.3% year over year, in line with consensus Adjusted EBITDA 2$110 million to $112 million
(1)Leverage ratio is defined as net debt divided by Adjusted EBITDA
(2)Adjusted EBITDA and Free Cash Flow 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.
(3)According to Company-compiled data as of May 28, 2026, the current Factset consensus of 10 sell-side analyst expectations for Q2 2026 net sales implies a year-over-year growth rate of 0.3%.
* 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.Earnings Conference Call Webcast Information:Management will host an earnings conference call on June 3, 2026 at approximately 4:15 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 Chile. 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 Q2 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," "estimates," "projects", "forecasts" 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 authorityPETCO HEALTH AND WELLNESS COMPANY, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share amounts)(Unaudited and subject to reclassification)
13 Weeks Ended
May 2,
2026
May 3,
2025
Net sales:
Products
$ 1,228,087
$ 1,241,891
Services and other
268,645
251,508
Total net sales
1,496,732
1,493,399
Cost of sales:
Products
757,778
766,285
Services and other
164,529
157,146
Total cost of sales
922,307
923,431
Gross profit
574,425
569,968
Selling, general and administrative expenses
549,799
553,609
Operating income
24,626
16,359
Interest income
(1,497)
(1,359)
Interest expense
32,785
33,494
Loss on extinguishment and modification of debt
11,840
—
Loss before income taxes and income from
equity method investees
(18,502)
(15,776)
Income tax expense
2,199
495
Income from equity method investees
(5,555)
(4,610)
Net loss attributable to Class A and B-1 common
stockholders
$ (15,146)
$ (11,661)
Net loss per Class A and B-1 common share:
Basic
$ (0.05)
$ (0.04)
Diluted
$ (0.05)
$ (0.04)
Weighted average shares used in computing net loss per Class A
and B-1 common share:
Basic
283,684
277,548
Diluted
283,684
277,548
PETCO HEALTH AND WELLNESS COMPANY, INC.CONSOLIDATED BALANCE SHEETS(In thousands, except per share amounts)(Unaudited and subject to reclassification)
May 2,
2026
January 31,
2026 ASSETS
Current assets:
Cash and cash equivalents
$ 166,804
$ 256,736Receivables, less allowance for credit losses1
36,928
45,812Merchandise inventories, net
632,912
590,210Prepaid expenses
64,036
51,747Other current assets
60,164
75,281Total current assets
960,844
1,019,786Fixed assets
2,404,132
2,378,208Less accumulated depreciation
(1,758,226)
(1,722,060)Fixed assets, net
645,906
656,148Operating lease right-of-use assets
1,265,299
1,288,593Goodwill
980,064
980,064Trade name
1,025,000
1,025,000Other long-term assets
207,473
203,834Total assets
$ 5,084,586
$ 5,173,425LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and book overdrafts
$ 480,656
$ 450,552Accrued salaries and employee benefits
107,784
154,148Accrued expenses and other liabilities
216,183
204,751Current portion of operating lease liabilities
312,399
320,082Current portion of long-term debt and other lease liabilities
13,245
4,608Total current liabilities
1,130,267
1,134,141Senior secured credit facilities, net, excluding current portion
874,116
1,488,527Senior notes, net
590,146
—Operating lease liabilities, excluding current portion
994,995
1,047,185Deferred taxes, net
235,197
234,911Other long-term liabilities
104,560
104,407Total liabilities
3,929,281
4,009,171Commitments and contingencies
Stockholders' equity:
Class A common stock2
247
244Class B-1 common stock3
38
38Class B-2 common stock4
—
—Preferred stock5
—
—Additional paid-in-capital
2,318,877
2,312,354Accumulated deficit
(1,155,139)
(1,139,993)Accumulated other comprehensive loss
(8,718)
(8,389)Total stockholders' equity
1,155,305
1,164,254Total liabilities and stockholders' equity
$ 5,084,586
$ 5,173,425
¹ Allowances for credit losses are $858 and $779, respectively² Class A common stock, $0.001 par value: Authorized - 1.0 billion shares;
Issued and outstanding - 247.4 million and 243.7 million shares, respectively³ Class B-1 common stock, $0.001 par value: Authorized - 75.0 million shares;
Issued and outstanding - 37.8 million shares4 Class B-2 common stock, $0.000001 par value: Authorized - 75.0 million shares;
Issued and outstanding - 37.8 million shares5 Preferred stock, $0.001 par value: Authorized - 25.0 million shares;
Issued and outstanding - none PETCO HEALTH AND WELLNESS COMPANY, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited and subject to reclassification)
13 Weeks Ended
May 2,
2026
May 3,
2025Cash flows from operating activities:
Net loss
$ (15,146)
$ (11,661)Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization
49,041
49,811Amortization of debt discounts and issuance costs
1,337
1,246Provision for deferred taxes
288
(9,218)Equity-based compensation
9,451
9,420Loss on extinguishment and modification of debt
11,840
—Income from equity method investees
(5,555)
(4,610)Amounts reclassified out of accumulated other comprehensive loss
51
(212)Non-cash operating lease costs
103,080
102,132Changes in assets and liabilities:
Receivables
8,884
4,229 Merchandise inventories
(42,702)
7,857 Prepaid expenses and other assets
(8,299)
(1,673) Accounts payable and book overdrafts
30,577
(19,028) Accrued salaries and employee benefits
(46,362)
(51,130) Accrued expenses and other liabilities
11,559
12,426 Operating lease liabilities
(139,677)
(103,780) Other long-term liabilities
664
(1,263) Net cash used in operating activities
(30,969)
(15,454)Cash flows from investing activities:
Cash paid for fixed assets
(38,153)
(28,412)Insurance recoveries
230
—Proceeds from sale of assets
—
1,279Cash received from partial surrender of officers' life insurance
74
— Net cash used in investing activities
(37,849)
(27,133)Cash flows from financing activities:
Borrowings under long-term debt agreements
1,500,000
—Repayments of long-term debt
(1,500,000)
—Debt refinancing costs and original issue discount
(28,442)
—Payments for finance lease liabilities
(1,110)
(1,143)Proceeds from employee stock purchase plan and stock option exercises
1,008
967Tax withholdings on stock-based awards
(4,094)
(158) Net cash used in financing activities
(32,638)
(334)
Net decrease in cash, cash equivalents and restricted cash
(101,456)
(42,921)Cash, cash equivalents and restricted cash at beginning of period
269,412
181,665Cash, cash equivalents and restricted cash at end of period
$ 167,956
$ 138,744 NON-GAAP FINANCIAL MEASURESThe following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.Adjusted EBITDA Adjusted EBITDA is considered a non-GAAP financial measure under the Securities and Exchange Commission's (SEC) rules because it excludes certain amounts included in net income calculated in accordance with GAAP. Management believes that Adjusted EBITDA is a meaningful measure to share with investors because it facilitates comparison of the current period performance with that of the comparable prior period. In addition, Adjusted EBITDA affords investors a view of what management considers to be Petco's core operating performance as well as the ability to make a more informed assessment of such operating performance as compared with that of the prior period. Please see the company's Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the SEC on March 13, 2026 for additional information on Adjusted EBITDA.The table below reflects the calculation of Adjusted EBITDA for the thirteen weeks ended May 2, 2026 compared to the thirteen weeks ended May 3, 2025.(dollars in thousands)
13 Weeks EndedReconciliation of Net Loss Attributable to Class A and B-1
Common Stockholders to Adjusted EBITDA
May 2,
2026
May 3,
2025Net loss attributable to Class A and B-1 common stockholders
$ (15,146)
$ (11,661)Add (deduct):
Interest expense, net
31,288
32,135Income tax expense
2,199
495Depreciation and amortization
49,041
49,811Income from equity method investees
(5,555)
(4,610)Loss on extinguishment and modification of debt
11,840
—Equity-based compensation
9,451
9,420Mexico joint venture EBITDA (1)
12,916
10,198Other costs (2)
1,297
3,661Adjusted EBITDA
$ 97,331
$ 89,449Net sales
$ 1,496,732
$ 1,493,399Net margin (3)
(1.0 %)
(0.8 %)Adjusted EBITDA Margin
6.5 %
6.0 %
(1)Mexico joint venture EBITDA represents 50 percent of the entity's operating results for all periods, as adjusted to reflect the results on a basis comparable to Adjusted EBITDA. In the financial statements, this joint venture is accounted for as an equity method investment and reported net of depreciation and income taxes because such a presentation would not reflect the adjustments made in the calculation of Adjusted EBITDA, we include the 50 percent interest in the company's Mexico joint venture on an Adjusted EBITDA basis to ensure consistency. The table below presents a reconciliation of Mexico joint venture net income to Mexico joint venture EBITDA.
13 Weeks Ended(in thousands)
May 2,
2026
May 3,
2025Net income
$ 11,104
$ 9,220Depreciation
8,306
6,597Income tax expense
5,194
4,166Foreign currency loss (gain)
144
(292)Interest expense, net
1,083
704EBITDA
$ 25,831
$ 20,39550% of EBITDA
$ 12,916
$ 10,198
(2)Other costs include, as incurred: restructuring costs and restructuring-related severance costs; legal reserves associated with significant, non-ordinary course legal or regulatory matters; and costs related to certain significant strategic transactions.(3)We define net margin as net loss attributable to Class A and B-1 common stockholders divided by net sales and Adjusted EBITDA margin as Adjusted EBITDA divided by net sales.Free Cash FlowFree Cash Flow is a non-GAAP financial measure that is calculated as net cash provided by operating activities less cash paid for fixed assets. Management believes that Free Cash Flow, which measures the ability to generate additional cash from business operations, is an important financial measure for use in evaluating the company's financial performance.The table below reflects the calculation of Free Cash Flow for the thirteen weeks ended May 2, 2026 compared to the thirteen weeks ended May 3, 2025.(in thousands)
13 Weeks Ended
May 2,
2026
May 3,
2025Net cash used in operating activities
$ (30,969)
$ (15,454)Cash paid for fixed assets
(38,153)
(28,412)Free Cash Flow
$ (69,122)
$ (43,866)Net Debt The table below reflects the calculation for net debt as of May 2, 2026 compared to January 31, 2026 and May 3, 2025.(dollars in thousands)
May 2,
2026
January 31,
2026
May 3,
2025Total debt:
Senior secured credit facilities, net, including current portion
$ 883,116
$ 1,488,527
$ 1,579,338Senior notes, net
590,146
—
—Finance leases, including current portion
8,886
9,683
13,203Total debt
1,482,148
1,498,210
1,592,541Less: cash and cash equivalents
(166,804)
(256,736)
(133,343)Net Debt
$ 1,315,344
$ 1,241,474
$ 1,459,198 View original content to download multimedia:https://www.prnewswire.com/news-releases/petco-reports-first-quarter-2026-results-302790636.htmlSOURCE Petco - Investor Relations Original: Petco Reports First Quarter 2026 Results
US Market News
4月前
Petco Reports Fourth Quarter and Full Year 2025 ResultsMarch 11, 2026 4:05 PM
PR Newswire (US)
Delivers Profitability Ahead of Outlook, Reduces Leverage Ratio
Provides Fiscal 2026 Outlook*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.
https://ir.petco.com/ (PRNewsfoto/Petco Health and Wellness Company, Inc.)" alt="Petco Health + Wellness Company, Inc. Logo https://ir.petco.com/ (PRNewsfoto/Petco Health and Wellness Company, Inc.)"/>
"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 OverviewFor 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 GuidanceFor fiscal 2026 and Q1, the Company is providing guidance as follows.Full Year 2026 Outlook
FY 2026 Outlook* Net SalesFlat 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~15-20First Quarter 2026 Outlook
Q1 2026 Outlook* Net SalesDown 1% to flat year over yearAdjusted 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)
Income tax expense (benefit)
11,301
2,504
6,266
(7,481)
Income from equity method investees
(6,793)
(5,112)
(20,358)
(18,669)
Net (loss) income attributable to Class A and B-1 common
stockholders
$ (2,575)
$ (13,837)
$ 9,066
$ (101,816)
Net (loss) income per Class A and B-1 common share:
Basic
$ (0.01)
$ (0.05)
$ 0.03
$ (0.37)
Diluted
$ (0.01)
$ (0.05)
$ 0.03
$ (0.37)
Weighted average shares used in computing net (loss) income per Class A
and B-1 common share:
Basic
281,236
276,305
279,555
273,410
Diluted
281,236
276,305
286,148
273,410
PETCO HEALTH AND WELLNESS COMPANY, INC.CONSOLIDATED BALANCE SHEETS(In thousands, except per share amounts)(Unaudited and subject to reclassification)
January 31,
2026
February 1,
2025 ASSETS
Current assets:
Cash and cash equivalents
$ 256,736
$ 165,756Receivables, less allowance for credit losses1
45,812
40,425Merchandise inventories, net
590,210
653,329Prepaid expenses
51,747
53,515Other current assets
75,281
60,594Total current assets
1,019,786
973,619Fixed assets, net
656,148
725,438Operating lease right-of-use assets
1,288,593
1,302,346Goodwill
980,064
980,064Trade name
1,025,000
1,025,000Other long-term assets
203,834
187,963Total assets
$ 5,173,425
$ 5,194,430LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and book overdrafts
$ 450,552
$ 492,878Accrued salaries and employee benefits
154,148
157,460Accrued expenses and other liabilities
204,751
177,079Current portion of operating lease liabilities
320,082
306,400Current portion of long-term debt and other lease liabilities
4,608
5,346Total current liabilities
1,134,141
1,139,163Senior secured credit facilities, net, excluding current portion
1,488,527
1,578,091Operating lease liabilities, excluding current portion
1,047,185
1,037,206Deferred taxes, net
234,911
217,712Other long-term liabilities
104,407
108,628Total liabilities
4,009,171
4,080,800Commitments and contingencies
Stockholders' equity:
Class A common stock2
244
239Class B-1 common stock3
38
38Class B-2 common stock4
—
—Preferred stock5
—
—Additional paid-in-capital
2,312,354
2,280,495Accumulated deficit
(1,139,993)
(1,149,059)Accumulated other comprehensive loss
(8,389)
(18,083)Total stockholders' equity
1,164,254
1,113,630Total liabilities and stockholders' equity
$ 5,173,425
$ 5,194,430
1 Allowances for credit losses are $779 and $1,594, respectively2 Class A common stock, $0.001 par value: Authorized - 1.0 billion shares;
Issued and outstanding - 243.7 million and 239.1 million shares, respectively3 Class B-1 common stock, $0.001 par value: Authorized - 75.0 million shares;
Issued and outstanding - 37.8 million shares4 Class B-2 common stock, $0.000001 par value: Authorized - 75.0 million shares;
Issued and outstanding - 37.8 million shares5 Preferred stock, $0.001 par value: Authorized - 25.0 million shares;
Issued and outstanding - none PETCO HEALTH AND WELLNESS COMPANY, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited and subject to reclassification)
52 Weeks Ended
January 31,
2026
February 1,
2025Cash flows from operating activities:
Net income (loss)
$ 9,066
$ (101,816)Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization
196,710
208,517Amortization of debt discounts and issuance costs
5,022
4,896Provision for deferred taxes
17,050
(30,492)Equity-based compensation expense
32,650
50,212Loss on extinguishment and modification of debt
565
—Income from equity method investees
(20,358)
(18,669)Amounts reclassified out of accumulated other comprehensive loss
(556)
(3,146)Non-cash operating lease costs
411,812
414,396Other non-operating income
—
(4,800)Changes in assets and liabilities:
Receivables
(5,621)
4,178Merchandise inventories
63,119
30,767Prepaid expenses and other assets
818
(3,960)Accounts payable and book overdrafts
(42,992)
8,484Accrued salaries and employee benefits
(3,271)
56,981Accrued expenses and other liabilities
24,987
(12,455)Operating lease liabilities
(371,134)
(418,219)Other long-term liabilities
(3,817)
(7,201)Net cash provided by operating activities
314,050
177,673Cash flows from investing activities:
Cash paid for fixed assets
(127,097)
(127,990)Cash paid for acquisitions, net of cash acquired
—
(629)Cash paid for investments
—
(457)Proceeds from investment
—
998Proceeds from sale of assets
2,541
1,369Cash received from partial surrender of officers' life insurance
—
2,806Net cash used in investing activities
(124,556)
(123,903)Cash flows from financing activities:
Borrowings under long-term debt agreements
—
201,000Repayments of long-term debt
(95,250)
(201,000)Debt refinancing costs
—
(3,028)Payments for finance lease liabilities
(5,614)
(5,707)Proceeds from employee stock purchase plan and stock option exercises
3,677
3,770Tax withholdings on stock-based awards
(4,560)
(6,289)Proceeds from issuance of common stock
—
2,500Net cash used in financing activities
(101,747)
(8,754)
Net decrease in cash, cash equivalents and restricted cash
87,747
45,016Cash, cash equivalents and restricted cash at beginning of period
181,665
136,649Cash, cash equivalents and restricted cash at end of period
$ 269,412
$ 181,665NON-GAAP FINANCIAL MEASURESThe following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.Adjusted EBITDA Adjusted EBITDA is considered a non-GAAP financial measure under the Securities and Exchange Commission's (SEC) rules because it excludes certain amounts included in net income calculated in accordance with GAAP. Management believes that Adjusted EBITDA is a meaningful measure to share with investors because it facilitates comparison of the current period performance with that of the comparable prior period. In addition, Adjusted EBITDA affords investors a view of what management considers to be Petco's core operating performance as well as the ability to make a more informed assessment of such operating performance as compared with that of the prior period. Please see the company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025 filed with the SEC on March 31, 2025 for additional information on Adjusted EBITDA.The table below reflects the calculation of Adjusted EBITDA for the thirteen and fifty-two weeks ended January 31, 2026 compared to the thirteen and fifty-two weeks ended February 1, 2025.(dollars in thousands)
13 Weeks Ended
52 Weeks EndedReconciliation of Net (Loss) Income Attributable to Class A and B-1
Common Stockholders to Adjusted EBITDA
January 31,
2026
February 1,
2025
January 31,
2026
February 1,
2025Net (loss) income attributable to Class A and B-1 common stockholders
$ (2,575)
$ (13,837)
$ 9,066
$ (101,816)Add (deduct):
Interest expense, net
29,358
32,833
124,894
139,817Income tax expense (benefit)
11,301
2,504
6,266
(7,481)Depreciation and amortization
47,567
50,654
196,710
208,517Income from equity method investees
(6,793)
(5,112)
(20,358)
(18,669)Loss on debt extinguishment and modification
565
—
565
—Equity-based compensation expense
7,278
9,507
32,650
50,212Other non-operating loss (income)
—
1,000
—
(4,800)Mexico joint venture EBITDA (1)
13,915
11,233
46,135
41,615Acquisition and divestiture-related integration costs (2)
—
—
—
3,719Other costs (3)
5,678
7,341
12,239
25,412Adjusted EBITDA
$ 106,294
$ 96,123
$ 408,167
$ 336,526Net sales
$ 1,515,128
$ 1,552,130
$ 5,961,467
$ 6,116,462Net margin (4)
(0.2 %)
(0.9 %)
0.2 %
(1.7 %)Adjusted EBITDA Margin
7.0 %
6.2 %
6.8 %
5.5 %
(1)Mexico joint venture EBITDA represents 50 percent of the entity's operating results for all periods, as adjusted to reflect the results on a basis comparable to Adjusted EBITDA. In the financial statements, this joint venture is accounted for as an equity method investment and reported net of depreciation and income taxes because such a presentation would not reflect the adjustments made in the calculation of Adjusted EBITDA, we include the 50 percent interest in the company's Mexico joint venture on an Adjusted EBITDA basis to ensure consistency. The table below presents a reconciliation of Mexico joint venture net income to Mexico joint venture EBITDA.
13 Weeks Ended
52 Weeks Ended(in thousands)
January 31,
2026
February 1,
2025
January 31,
2026
February 1,
2025Net income
$ 13,586
$ 10,224
$ 40,715
$ 37,559Depreciation
7,819
6,536
28,934
27,360Income tax expense
5,668
5,014
18,267
16,010Foreign currency (gain) loss
(225)
176
772
169Interest expense, net
982
516
3,581
2,131EBITDA
$ 27,830
$ 22,466
$ 92,269
$ 83,22950% of EBITDA
$ 13,915
$ 11,233
$ 46,135
$ 41,615
(2)Acquisition and divestiture-related integration costs include direct costs resulting from acquiring, integrating, or divesting businesses. These include third-party professional and legal fees, losses on sales of divestitures, and other integration-related costs that would not have otherwise been incurred as part of the company's operations.
(3)Other costs include, as incurred: restructuring costs and restructuring-related severance costs; legal reserves associated with significant, non-ordinary course legal or regulatory matters; and costs related to certain significant strategic transactions. In fiscal 2025, other costs were primarily driven by $9.7 million of severance and $2.5 million relating to legal matters. In fiscal 2024, other costs were primarily driven by $15.8 million of severance and $7.7 million relating to legal matters and strategic initiatives.
(4)We define net margin as net loss attributable to Class A and B-1 common stockholders divided by net sales and Adjusted EBITDA margin as Adjusted EBITDA divided by net sales.Free Cash FlowFree Cash Flow is a non-GAAP financial measure that is calculated as net cash provided by operating activities less cash paid for fixed assets. Management believes that Free Cash Flow, which measures the ability to generate additional cash from business operations, is an important financial measure for use in evaluating the company's financial performance.The table below reflects the calculation of Free Cash Flow for the thirteen and fifty-two weeks ended January 31, 2026 compared to the thirteen and fifty-two weeks ended February 1, 2025.(in thousands)
13 Weeks Ended
52 Weeks Ended
January 31,
2026
February 1,
2025
January 31,
2026
February 1,
2025Net cash provided by operating activities
$ 153,522
$ 95,993
$ 314,050
$ 177,673Cash paid for fixed assets
(37,137)
(36,949)
(127,097)
(127,990)Free Cash Flow
$ 116,385
$ 59,044
$ 186,953
$ 49,683Leverage RatioLeverage Ratio is a non-GAAP financial measure that is calculated as net debt divided by Adjusted EBITDA.The table below reflects the calculation for Leverage Ratio for the fifty-two weeks ended January 31, 2026 compared to the fifty-two weeks ended February 1, 2025.(dollars in thousands)
January 31,
2026
February 1,
2025Total debt:
Senior secured credit facilities, net, including current portion
$ 1,488,527
$ 1,578,091Finance leases, including current portion
9,683
13,793Total debt
1,498,210
1,591,884Less: cash and cash equivalents
(256,736)
(165,756)Net Debt
$ 1,241,474
$ 1,426,128Adjusted EBITDA
$ 408,167
$ 336,526Net Debt / Adjusted EBITDA ratio
3.0x
4.2x
View original content to download multimedia:https://www.prnewswire.com/news-releases/petco-reports-fourth-quarter-and-full-year-2025-results-302711280.htmlSOURCE Petco - Investor Relations
Original: Petco Reports Fourth Quarter and Full Year 2025 Results
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