Petco ends FY2025 with lower sales, sharper focus on services
Petco closed fiscal 2025 with lower sales but stronger profitability, underscoring a deliberate shift away from lower-quality revenue and toward higher-margin categories and services. The retailer reported full-year net sales of $5.96 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. In the fourth quarter, sales fell 2.4% to $1.52 billion, but operating income jumped 83.2% to $31.9 million. Management is now moving into a new growth phase, branded “Reach for the Sky,” centered on consumables, fresh pet food, owned brands, and services, including veterinary hospitals, mobile vaccination clinics, and grooming. (corporate.petco.com)
Why it matters: For veterinary professionals, the key signal isn’t the sales decline by itself, but where Petco says it will invest next. The company has framed services as both a differentiator and a growth driver, and in prior company disclosures it said it operates more than 280 full-service hospitals and about 1,400 mobile clinics per week. That suggests Petco still sees veterinary access, preventive care, and service-led retention as central to its retail model, even as it trims unprofitable volume and closes some stores. For clinics competing with or partnering alongside retail-based care, Petco’s strategy points to continued pressure around convenience, preventive services, and bundled wellness offerings for pet parents. The broader retail backdrop also matters: in Brazil, Petz and Cobasi finished 2025 with combined revenue growth of 8.8%, including service growth in the fourth quarter and faster digital expansion, showing that pet retail operators elsewhere are still finding ways to grow traffic, services, and margin at the same time. (annualreport.petco.com; globalpets.com)
What to watch: In fiscal 2026, watch whether Petco can deliver its projected return to positive comparable sales while expanding fresh food, closing 15 to 20 stores, and growing service utilization without eroding margins. It’s also worth watching how its execution compares with other pet retailers that are leaning on private-label growth, digital sales, and service expansion to support profitability. (petfoodprocessing.net; globalpets.com)