Petco Health and Wellness Company (WOOF) Q3 2025 earnings summary

Executive summary

• Q3 2024 net revenue was $1.51 billion, up 1.2% year-over-year, with comparable sales increasing 1.8% and adjusted EBITDA of $81.2 million, slightly ahead of expectations.

• Gross profit rose 4.7% to $575.8 million, with gross margin expanding 130 basis points to 38.1% due to product cost management and improved services margin.

• Net loss attributable to common stockholders was $16.7 million, or $(0.06) per share, a significant improvement from the prior year, which included a $1.2 billion goodwill impairment.

• Initiatives in merchandising, customer service, and efficiency are showing early positive impact, with leadership additions and operational discipline aimed at sustainable growth.

• The company is on track to achieve structural cost savings and deliver positive free cash flow for fiscal 2024.

Financial highlights

• Net revenue was $1.51 billion, up 1.2% year-over-year; comparable sales increased 1.8%.

• Consumables grew 2.7%–3%, while supplies and companion animal declined 2.8%–3% but improved sequentially.

• Services and other revenue grew 5%, with services specifically up 9% due to strength in vet hospitals, mobile clinics, and grooming.

• Gross profit was $575.8 million, up 4.7% from prior year; gross margin was 38.1%, up 130 basis points.

• SG&A was $571.8 million, up 2.2% year-over-year, with SG&A rate at 37.8%.

• Adjusted EBITDA margin was 5.4%, up from 4.8% last year; adjusted EPS was -$0.02 versus -$0.05 last year.

• Free cash flow for Q3 was $(10.3) million, a significant improvement from $(28.1) million a year ago.

• Liquidity at quarter-end was $644 million, including $117 million in cash and $528 million in revolving credit availability.

Outlook and guidance

• Q4 2024 net revenue expected at approximately $1.55 billion.

• Q4 adjusted EBITDA guidance is $90–$95 million, including at least $10 million in transformation consulting fees.

• Q4 adjusted EPS projected between $0.00 and $0.02.

• Full-year net interest expense expected at $140 million; capital expenditures at $130 million.

• Company remains on track to deliver positive free cash flow for fiscal 2024.