Petco Health and Wellness Company (WOOF) Q2 2027 earnings summary

Executive summary

• Achieved second consecutive quarter of positive comparable sales growth, with net sales of $1.5 billion (up 0.05% year-over-year) and comparable sales up 0.6%.

• Adjusted EBITDA reached $122.2 million (8.2% of net sales), including a $6.8 million net tariff refund; normalized EBITDA was $115.4 million.

• Net income attributable to common stockholders rose to $38.7 million from $14.0 million year-over-year.

• Membership program relaunch drove higher customer engagement but temporarily impacted Q2 net sales due to increased point redemptions.

• Strategic focus on innovation, digital capabilities, and vet hospitals is gaining traction, with growth in both new and reactivated customers.

Financial highlights

• Gross profit was $591 million; gross margin rate expanded 37 basis points to 39.7%.

• Operating income grew to $47.8 million (3.2% of net sales), up from $43 million (2.9%) last year.

• Free cash flow year-to-date was $61 million, up from $10 million last year; liquidity at quarter end was $781 million, including $293.5 million in cash.

• Net debt decreased 15% year-over-year to $1.19 billion; total debt reduced to $1.48 billion.

• Interest expense decreased by 2.2% to $32.6 million for the quarter.

Outlook and guidance

• Full-year net sales expected to be flat to up 1.5% year-over-year; Adjusted EBITDA guidance reaffirmed at $415–$430 million.

• Q3 2026 net sales projected to grow 0.4%–1.0% year-over-year; Adjusted EBITDA expected at $100–$103 million.

• Net interest expense forecasted at $122 million, depreciation and amortization at $200 million, and capital expenditures at $140 million.

• Net store closures projected between 15 and 20 for the year.

• Outlook assumes no further tariff refunds and stable economic, currency, and regulatory conditions.