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

Petco ended fiscal 2025 with weaker sales, but materially better profits, as the retailer leaned into a strategic reset rather than chasing low-quality revenue. In results released March 11, 2026, 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 climbed 21.3% to $408.2 million. Chief executive Joel Anderson said the company spent 2025 rebuilding its economic model and is now moving into a new phase focused on “sustainable, profitable top-line growth.” (corporate.petco.com)

That framing matters because Petco has spent the past year pulling back in places where volume wasn’t producing acceptable returns. The company’s fourth-quarter results showed continued sales pressure, with quarterly net sales down 2.4% to about $1.5 billion, while store count fell by seven net locations to 1,382 by year-end. At the same time, Petco improved cash generation, reduced leverage to 3.0x from 4.2x, paid down debt, and refinanced maturities out to 2031, giving management more room to pursue targeted growth rather than broad expansion. (corporate.petco.com)

Petco’s next phase, branded “Reach for the Sky,” is built around four pillars: compelling product, services at scale, trusted store experience, and an integrated omnichannel model. Investor materials and the earnings call point to a particular emphasis on consumables and fresh food, including more than 1,000 additional freezer units to support assortment expansion, along with more owned-brand penetration and higher product newness. But services remain a core part of the strategy. In its presentation, Petco said it is “committed to vet business,” with a near-term focus on optimizing productivity before ramping further, and described veterinary, grooming, and training as wholly owned services that help differentiate the chain from peers. (ir.petco.com)

That’s consistent with Petco’s broader operating model. On its corporate veterinary-services page, the company says it offers a mix of full-service Vetco Total Care hospitals and Vetco vaccination clinics, positioned as accessible care embedded within retail locations. In its latest annual report on file, Petco said that as of February 1, 2025, it had approximately 300 full-service veterinary hospitals and operated more than 1,500 Vetco clinics on a weekly basis. The filing also makes clear why the business matters strategically: by integrating hospitals into pet care centers, Petco says it can benefit from added basket opportunities, including prescription food and drug sales. (corporate.petco.com)

Industry context makes the strategy notable. While Petco is emphasizing margin recovery and selective growth, other pet retailers are still posting stronger top-line expansion. GlobalPETS reported that Brazil’s Petz and Cobasi, now merged under União Pet, delivered combined revenue growth of 8.8% in fiscal 2025, with Petz up 7.9% to R$4.3 billion and Cobasi up 9.9% to R$3.6 billion. Growth came from both physical stores and e-commerce, with brick-and-mortar sales up 7.3%, digital commerce up 11.7%, and digital reaching 40.9% of total sales. Services also accelerated in the fourth quarter, rising 10% at Petz and 22% at Cobasi, while same-store sales grew 8% and 6.2%, respectively. The newly combined group also posted adjusted net income of R$242.1 million, up 50.4% year over year, helped by private-label momentum and tighter operational execution. Cobasi said its Joy dry food launch helped private label sales grow 37% and reach 7.6% of total sales, while Petz’s private-label business grew 26%. (globalpetindustry.com)

That comparison is useful not because the markets are identical, but because it shows what profitable growth can look like in pet retail right now: stronger digital mix, service acceleration, and owned-brand gains alongside margin improvement. It also highlights that disciplined capital allocation is not unique to Petco. Petz and Cobasi halved investments in new stores and hospitals during 2025, redirected resources toward operational continuity and existing-store improvements, and still ended the year with 521 stores after opening 15 units, even as merger conditions required divestiture of 26 stores in São Paulo. As the Brazilian group moves into integration, management has said 2026 will begin a new chapter as a unified company. Against that backdrop, Petco’s answer appears to be a narrower, more disciplined model that uses services, fresh food, and owned brands to deepen pet parent engagement. (globalpetindustry.com)

Why it matters: For veterinary professionals, Petco’s results suggest corporate veterinary care is still viewed as a growth engine, even in a tougher consumer environment. The company isn’t signaling a retreat from veterinary services; instead, it’s framing vet as one of the few areas capable of driving traffic, loyalty, and cross-category spending. That could mean continued focus on productivity in existing hospitals and clinics before any broader expansion. The broader industry comparison also matters: peers elsewhere are showing that services and private-label products can support growth and profit at the same time, which raises the bar for U.S. specialty retailers trying to prove their models can do both. For competitors, recruiters, and practice groups, Petco remains a meaningful player to watch because its retail-based model ties preventive care, prescriptions, nutrition, grooming, and membership programs into one consumer funnel. If that model gains traction, it could keep reshaping how pet parents access routine and general-practice care. (ir.petco.com; globalpetindustry.com)

What to watch: In fiscal 2026, Petco is guiding for net sales from flat to up 1.5%, adjusted EBITDA of $415 million to $430 million, and roughly 15 to 20 net store closures, so the near-term question is whether the company can return to positive comparable sales while still investing in services, fresh food, and owned brands. For veterinary professionals specifically, the clearest markers will be any disclosures around hospital productivity, clinic volume, staffing, and whether “optimize first, then ramp” turns into measurable expansion later in 2026. It will also be worth watching whether Petco can build more momentum in the same areas driving growth for international peers: digital penetration, service utilization, and private-label mix. (corporate.petco.com; globalpetindustry.com)