Petco ends FY2025 with lower sales, sharper focus on profit

CURRENT BRIEF VERSION: Petco closed fiscal 2025 with net sales of $6.0 billion, down 2.5% year over year, after what management described as a deliberate move away from unprofitable sales. At the same time, profitability improved sharply: operating income rose to $120.4 million from $7.1 million, net income turned positive at $9.1 million after a prior-year loss, and adjusted EBITDA increased 21.3% to $408.2 million. In its March 11, 2026 results, Petco also laid out its “Reach for the Sky” plan for fiscal 2026, centered on fresh food, new product launches, owned-brand development, and services. Management said the company closed seven net stores in fiscal 2025, ended the year with 1,382 stores, and expects another roughly 15 to 20 net closures in fiscal 2026. (corporate.petco.com)

Why it matters: For veterinary professionals, the most relevant signal is that Petco is still positioning veterinary care as a long-term growth engine, even as it pulls back elsewhere. On the earnings call, executives said about 20% of the chain currently hosts veterinary locations, that owned services are being optimized for productivity now, and that hospital growth is expected to resume in 2027 rather than immediately in 2026. That suggests Petco’s near-term focus is improving utilization, cross-selling, and margin performance in existing vet operations before accelerating expansion. The broader retail backdrop also matters: in Brazil, newly merged pet retailers Petz and Cobasi reported combined 2025 revenue growth of 8.8%, with gains in stores, e-commerce, services, and private label, while also slowing new store and hospital investment to focus on integration and existing operations. (fool.com; GlobalPETS)

What to watch: Watch whether Petco can turn its 2026 guidance of flat to up 1.5% sales into real traffic growth while showing measurable progress in veterinary productivity ahead of planned hospital expansion in 2027. It is also worth watching whether Petco can replicate some of the growth drivers seen elsewhere in pet retail, including private-label momentum, digital strength, and services growth, without losing the margin discipline it rebuilt in 2025. (corporate.petco.com; GlobalPETS)