Petco ends FY2025 with lower sales, keeps services in growth plan

Petco ended fiscal 2025 with declining sales, but materially better profitability, a combination that reflects a retailer still in reset mode rather than full recovery. The company reported net sales of $6.0 billion for the year ended January 31, 2026, down 2.5% from the prior year, while adjusted EBITDA increased 21.3% to $408.2 million. Operating income improved to $120.4 million from $7.1 million, and net income turned positive at $9.1 million after a loss in fiscal 2024. In the fourth quarter alone, operating income rose 83.2% even as sales slipped 2.4%. (corporate.petco.com)

That backdrop helps explain why the company is framing 2026 less as a broad expansion story and more as a selective growth phase. GlobalPETS characterized the year as a strategic pullback from unprofitable sales, while Petco’s own release emphasized margin improvement, stronger cash flow, and a return to expected positive comparable sales in 2026. The company also reduced its net debt to adjusted EBITDA ratio to 3.0x from 4.2x, a sign that management is trying to restore flexibility before leaning harder into growth investments. (globalpetindustry.com)

The growth plan now has a name: “Reach for the Sky.” Based on Petco’s earnings materials and trade coverage, the strategy centers on core consumables, supplies, services, and a stronger fresh-food proposition. Petco said it will add more than 1,000 freezer units over the course of 2026, beginning in the first quarter, to expand fresh pet food assortment. The company’s 2026 outlook calls for net sales between flat and up 1.5%, adjusted EBITDA of $415 million to $430 million, capital expenditures of about $140 million, and roughly 15 to 20 store closures. (petfoodprocessing.net)

For the veterinary side of the business, the notable point is that services remain embedded in the strategy even as Petco gets more selective elsewhere. GlobalPETS reported that the company aims to grow wholly owned services, including hospitals, vaccination clinics, grooming, and dog training centers. An earnings-call transcript published by The Motley Fool similarly described services as a core differentiator and said about 20% of the chain now hosts veterinary locations, with service productivity and future expansion under review. Petco’s 2024 annual report said that, as of February 1, 2025, it had approximately 300 full-service veterinary hospitals and operated more than 1,500 weekly Vetco clinics. (globalpetindustry.com)

Industry coverage also suggests Petco sees fresh food and services as linked behaviors rather than separate bets. In comments reported by Pet Food Processing, CEO Joel Anderson said fresh-food shoppers make more trips and spend materially more than dry-food-only dog shoppers, reinforcing the company’s push to use stores as higher-touch destinations. That matters because Petco’s model depends on cross-category engagement: a pet parent who comes in for food, a vaccine clinic, grooming, or a hospital visit is more valuable than one making an occasional commodity purchase. That’s the logic behind keeping veterinary and other services central to the mix despite broader retail pressure. (petfoodprocessing.net)

Why it matters: For veterinary professionals, Petco’s results are another reminder that corporate pet retail still sees clinical and preventive services as strategic traffic drivers, not side businesses. Even with sales under pressure, the company is preserving and potentially optimizing its care footprint rather than stepping away from it. That could affect local referral patterns, preventive care competition, hiring, and pet parent expectations around convenience, bundled services, and price transparency. It also reinforces a broader market trend: large pet retailers are increasingly trying to win on integrated ecosystems that combine nutrition, retail, membership, grooming, and veterinary access in one brand relationship. (fool.com)

There’s also a cautionary read for the profession. Petco’s numbers improved because it became more disciplined, not because demand suddenly accelerated. If services are expected to carry more strategic weight inside that model, pressure will likely increase on utilization, productivity, and cross-sell performance at hospital and clinic sites. For veterinarians and practice leaders, that makes Petco worth watching less as a pure retailer and more as a scaled competitor in accessible preventive and general practice care. That’s an inference based on the company’s stated strategy and existing footprint. (globalpetindustry.com)

What to watch: The next markers will be whether Petco can deliver positive comparable sales in fiscal 2026, whether fresh-food expansion lifts store traffic as planned, and whether management gives more concrete detail on service expansion, productivity targets, or veterinary footprint growth starting later in 2026 and into 2027. (corporate.petco.com)