Petco Health and Wellness Company (WOOF) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 2025 were $1.49 billion, down 2.3% year-over-year, with comparable sales decreasing 1.4% due to strategic store closures and e-commerce softness.

• Operating income rose to $43 million from $2.5 million in the prior year, and Adjusted EBITDA increased to $114 million from $84 million.

• Net income attributable to common stockholders was $14 million, compared to a net loss of $24.8 million a year ago.

• The company is executing a multi-phased transformation strategy focused on operational discipline, cost control, and sustainable, profitable growth.

• Celebrated 60th anniversary with a refreshed brand campaign and in-store events, driving positive customer engagement and higher NPS scores.

Financial highlights

• Gross margin expanded by over 120 basis points to 39.3%, with both products and services contributing.

• Adjusted EBITDA margin improved to 7.6% from 5.5% year-over-year.

• Free cash flow for Q2 2025 was $54 million, a significant increase from $1 million in Q2 2024.

• Inventory ended 9.5% below last year, with improved in-stock rates.

• Liquidity at quarter-end was $684 million, including $190 million in cash and $495.2 million in available credit.

Outlook and guidance

• Full-year 2025 Adjusted EBITDA guidance raised to $385–$395 million, up roughly 16% at midpoint.

• Net sales expected to be down low single digits for the year, reflecting store closures.

• Q3 2025 Adjusted EBITDA guidance is $92–$94 million; net sales to be down low single digits.

• Tariff impacts expected to become more significant in the second half, especially Q4.

• Management expects current resources and anticipated cash flows to be sufficient for operations and capital investments for at least the next 12 months.