Petco ends FY2025 with lower sales, but stronger profitability
CURRENT BRIEF VERSION: Petco ended fiscal 2025 with lower sales, but stronger profitability, underscoring how sharply the retailer has shifted from chasing volume to prioritizing margin. In results released March 11, 2026, the company reported full-year net sales of $6.0 billion, down 2.5% year over year, while adjusted EBITDA rose 21.3% to $408.2 million, operating income climbed to $120.4 million from $7.1 million, and net income turned positive at $9.1 million. Fourth-quarter sales were $1.5 billion, down 2.4%, while operating income rose 83.2% to $31.9 million. Petco said the decline reflected a disciplined retreat from unprofitable sales, and CEO Joel Anderson said the company now expects a return to positive comparable sales in 2026. (corporate.petco.com)
Why it matters: For veterinary professionals, the notable piece isn't just the retail slowdown, but where Petco says it will invest next. The company is framing services, including veterinary care, as part of its next growth phase, alongside fresh food and owned brands. Petco’s corporate materials say its veterinary platform includes full-service Vetco Total Care hospitals and Vetco vaccination clinics, and the company has previously told investors it is optimizing, rather than broadly expanding, its existing hospital footprint. That suggests veterinary services remain strategically important, even as Petco stays cautious on overall store growth and focuses on higher-return categories. The broader pet retail market also shows why that mix matters: in Brazil, newly merged retailers Petz and Cobasi posted combined 2025 revenue growth of 8.8%, with gains in stores, digital commerce, services, and private-label products, while also pulling back on new-store and hospital investment. (corporate.petco.com)
What to watch: Watch whether Petco’s 2026 “Reach for the Sky” plan, including fresh food expansion, owned-brand growth, and scaled services, translates into traffic gains without diluting margins. It will also be worth watching whether Petco can capture the kind of balanced growth other pet retailers are finding through private label, omnichannel execution, and services. (fool.com)