Petco ends FY2025 with lower sales, but doubles down on services

Petco closed fiscal 2025 with net sales of $6.0 billion, down 2.5% year over year, after what management described as a deliberate pullback from unprofitable sales. At the same time, profitability improved sharply: operating income rose to $120.4 million from $7.1 million, adjusted EBITDA increased 21.3% to $408.2 million, and net income turned positive at $9.1 million. In its March 11, 2026 results, Petco said it’s now shifting from reset mode into growth mode, with fiscal 2026 plans centered on consumables, fresh food, owned brands, and services, including veterinary hospitals, vaccination clinics, and grooming. The company is also guiding for flat to up 1.5% sales growth in FY2026, while planning roughly 15 to 20 net store closures. (corporate.petco.com)

Why it matters: For veterinary professionals, the bigger signal is that Petco still sees care delivery as a strategic differentiator even while tightening the broader retail business. Management and analyst coverage pointed to wholly owned veterinary services as a higher-margin area that can help drive store traffic, repeat visits, and larger baskets, alongside grooming and training. The broader pet retail market also offers a useful contrast: in Brazil, newly merged retailers Petz and Cobasi posted combined 2025 revenue growth of 8.8%, with service revenue accelerating in the fourth quarter and private-label gains helping profitability, even as they cut back investment in new stores and hospitals and shifted resources toward existing locations. That suggests Petco’s veterinary footprint is being positioned less as an add-on and more as a core part of its turnaround and growth story. (investing.com; globalpetindustry.com)

What to watch: Watch whether Petco’s 2026 growth plan translates into more productivity from its existing veterinary network, rather than a major new-build expansion push. That question looks even more relevant given that other pet retailers, including Brazil’s Petz and Cobasi, have also recently emphasized service growth and private-label momentum while slowing investment in new stores and hospitals. (investing.com; globalpetindustry.com)