Petco ends FY2025 with lower sales, shifts to services-led growth
CURRENT BRIEF VERSION: Petco closed fiscal 2025 with lower sales, but a markedly stronger profit profile as management continued to pull back from lower-quality revenue and reset the business around margin, inventory discipline, and cash flow. 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, net income turned positive at $9.1 million, and adjusted EBITDA increased 21.3% to $408.2 million. For fiscal 2026, Petco said it’s moving into a new “Reach for the Sky” growth phase centered on consumables, fresh food, owned brands, and owned services, including hospitals, vaccination clinics, grooming, and dog training. The plan includes adding more than 1,000 freezer units for fresh food during 2026. (corporate.petco.com)
Why it matters: For veterinary professionals, the notable point isn’t just weaker retail sales, but where Petco says it intends to invest next. The company has continued to describe services as a differentiator, and earlier filings said services momentum was supported by customer acquisition efforts and optimization of its veterinary hospital footprint. On the earnings call, management said about 20% of the chain currently hosts veterinary locations, with broader expansion expected to begin in 2027. That suggests FY2026 may be more about improving productivity and cross-selling around existing vet capacity than a rapid near-term buildout. The broader pet retail backdrop also matters: in Brazil, newly merged retailers Petz and Cobasi reported combined 2025 revenue growth of 8.8%, with digital sales up 11.7%, services accelerating in the fourth quarter, and adjusted net income up 50.4%, helped by private-label gains and tighter cost control. (ir.petco.com; globalpets.community)
What to watch: Watch whether Petco can translate stronger margins into sustained traffic and higher veterinary-service utilization as its 2026 growth plan rolls out, especially as other pet retailers show they can pair services, private label, and omnichannel growth with stronger top-line momentum. (corporate.petco.com; globalpets.community)