Petco Health and Wellness Company (WOOF) Q4 2026 earnings summary

Executive summary

• Q4 and FY25 profitability exceeded expectations, driven by a rebuilt economic model, strengthened leadership, and operational reset focused on merchandising, customer experience, and productivity.

• Leadership team was rebuilt, including new CFO, Chief Customer and Product Officer, and Chief Revenue Officer, and the North Star strategy was completed, emphasizing customer segmentation and four growth pillars for 2026.

• Strategic focus for 2026 is on sustainable, profitable top-line growth, market share expansion, and enhancing omni-channel and service offerings.

Financial highlights

• Q4 2025 net sales were $1.52B, down 2.4% year-over-year; comparable sales decreased 1.6%.

• Q4 operating income rose 83.2% to $31.9M; Q4 adjusted EBITDA increased 10.6% to $106.3M (7% margin).

• Full-year 2025 adjusted EBITDA rose 21.3% to $408.2M (6.8% margin); net income was $9.1M, up from a $101.8M loss.

• Gross margin for 2025 expanded 66 bps to 38.7%; SG&A leveraged 124 bps to 36.6%.

• Free cash flow for 2025 increased 276% to $187M; leverage ratio improved from 4.2x to 3.0x.

Outlook and guidance

• Q1 2026 net sales expected down 1% to flat; Adjusted EBITDA guidance of $92M–$94M.

• Full-year 2026 net sales expected flat to up 1.5%; Adjusted EBITDA guidance is $415M–$430M.

• Net store closures expected to be 15–20 in 2026, weighted to the back half.

• Capex planned at $140M for 2026; net interest expense $125M; D&A $200M; stock comp to rise low double digits.

• Guidance assumes stable macroeconomic, regulatory, and tariff conditions, and normalization of fuel prices.