Petco ends FY2025 with lower sales, doubles down on services
Petco closed fiscal 2025 with lower sales, but stronger profitability, as the retailer continued pulling back from unprofitable volume and laid out a new growth plan that leans heavily on consumables, fresh food, owned brands, and services. The company reported full-year net sales of $6.0 billion, down 2.5% year over year, while operating income rose to $120.4 million from $7.1 million and adjusted EBITDA increased 21.3% to $408.2 million. For the fourth quarter, net sales fell 2.4% to $1.52 billion, but operating income climbed 83.2% to $31.9 million. Petco said its FY2026 strategy, branded “Reach for the Sky,” includes adding more than 1,000 freezer units for fresh food, expanding owned-brand penetration, and building out its services ecosystem, including veterinary hospitals, clinics, and grooming. (corporate.petco.com)
Why it matters: For veterinary professionals, the notable point isn’t just retail margin recovery. It’s that Petco is still positioning veterinary care and grooming as core differentiators in a tougher consumer environment. On the company’s March 11, 2026 earnings call, management said veterinary locations are in about 20% of the chain, or roughly 300 stores, and described services as a competitive “moat,” with room for future expansion. That suggests Petco still sees in-store veterinary access, cross-selling, and recurring service relationships as part of its long-term growth model, even while overall store closures continue and top-line growth remains under pressure. The broader context is that other pet retailers are also leaning into a similar mix of private label, services, and omnichannel growth: in Brazil, newly merged Petz and Cobasi reported combined 2025 revenue growth of 8.8%, digital sales reaching 40.9% of total, and accelerating service growth in the fourth quarter, while also citing private-label gains as a profit driver. (fool.com, globalpets.com)
What to watch: Watch whether Petco can turn its FY2026 plan into positive comparable sales while continuing to invest in veterinary services and managing another 15 to 20 net store closures. It’s also worth watching whether Petco’s owned-brand, fresh-food, and services push can produce the kind of balanced growth-and-margin story other pet retailers are highlighting globally. (corporate.petco.com, globalpets.com)