Petco Health and Wellness Company (WOOF) Q2 2025 earnings summary

Executive summary

• Joel Anderson was appointed CEO, with a focus on profitability, operational discipline, and strengthening retail fundamentals; Mike Mohan leads a new Board committee on value creation.

• Q2 2024 net revenue was $1.52 billion, down 0.5% year-over-year, with comparable sales up 0.3% and Services/Vet sales up 10%.

• Net loss attributable to common stockholders widened to $24.8 million ($0.09 per share) from $14.6 million ($0.05 per share) year-over-year; Adjusted EBITDA declined to $83.5 million from $112.6 million.

• Emphasis on leveraging integrated store and digital footprint, differentiated offerings, and services (notably Vet platform) for long-term growth.

Financial highlights

• Gross profit was $580.7 million, gross margin 38.1% (down from 38.7% YoY); SG&A as a percentage of revenue increased to 37.9%, mainly due to higher payroll and one-time labor investments.

• Adjusted EBITDA was $83.5 million (margin 5.5%), down from $112.6 million (7.4%) in Q2 2023.

• Free cash flow was $42 million, slightly down from $45 million YoY; operating cash flow was $69.4 million.

• Cash and cash equivalents stood at $127.6 million, with $527.6 million available under the revolving credit facility.

• Net Debt was $1.46 billion; Net Debt/Adjusted EBITDA ratio increased to 4.3x from 2.9x a year ago.

Outlook and guidance

• Q3 2024 guidance: net revenue of ~$1.5 billion, Adjusted EBITDA of $76–$80 million, and Adjusted EPS of $(0.03) to $(0.04).

• Full-year 2024 guidance: net interest expense ~$145 million, 272 million weighted average shares, and $140 million in capital expenditures.

• Company expects to remain free cash flow positive for fiscal 2024.

• Guidance assumes stable economic, currency, tax, and regulatory conditions.