Petco ends FY2025 with lower sales, keeps vet in growth plan
VERSION 1 — BRIEF
Petco closed fiscal 2025 with net sales of $6.0 billion, down 2.5% year over year, after what executives described as a deliberate pullback from unprofitable sales. Even with lower revenue, the company reported stronger profitability: operating income rose to $120.4 million from $7.1 million a year earlier, adjusted EBITDA increased 21.3% to $408.2 million, and Petco finished the year with 1,382 stores after seven net closures in the fourth quarter. Management is now shifting from turnaround mode to a growth plan it calls “Reach for the Sky,” centered on fresh food, owned brands, store productivity, and services, including veterinary care, grooming, and training. (corporate.petco.com)
Why it matters: For veterinary professionals, the key signal is that Petco is still treating services as a strategic differentiator, even while tightening the broader business. In its investor materials, the company said it remains “committed” to the vet business and plans to optimize productivity before ramping further. Petco’s existing model includes full-service Vetco Total Care hospitals and Vetco vaccination clinics, and its most recent annual filing said the company had about 300 full-service veterinary hospitals and more than 1,500 weekly Vetco clinics as of February 1, 2025. That suggests veterinary services remain central to how Petco hopes to drive traffic, cross-selling, loyalty, and higher-margin growth. The contrast is notable: in Brazil, Petz and Cobasi — now merged as União Pet — reported combined fiscal 2025 revenue growth of 8.8%, with gains in stores, digital commerce, services, and private-label brands, showing that pet retail competitors elsewhere are still finding ways to grow while improving profitability. (ir.petco.com; globalpetindustry.com)
What to watch: Watch whether Petco’s fiscal 2026 plan, which calls for flat to 1.5% sales growth, adjusted EBITDA of $415 million to $430 million, and roughly 15 to 20 net store closures, translates into renewed investment, hiring, or format changes across its veterinary footprint. A key question is whether Petco can pair its margin recovery with the kind of service, digital, and owned-brand momentum that helped Petz and Cobasi grow in 2025. (corporate.petco.com; globalpetindustry.com)