Petco Health and Wellness Company, Inc. WOOF reported fourth-quarter fiscal 2025 results, with the top and bottom lines surpassing the Zacks Consensus Estimate. However, the top line decreased year over year.
WOOF’s Quarterly Performance: Key Insights
Petco reported a loss of 1 cent per share, which is narrower versus the Zacks Consensus Estimate of a loss of 2 cents per share. Loss per share in this quarter was narrower than the loss of 3 cents per share in the previous-year period.
Petco Health and Wellness Company, Inc. Price, Consensus and EPS Surprise
Petco Health and Wellness Company, Inc. price-consensus-eps-surprise-chart | Petco Health and Wellness Company, Inc. Quote
Net sales reached $1,515.1 million, down 2.4% year over year from $1,552.1 million, in line with management’s guidance for a low single-digit decline. The reported number exceeded the Zacks Consensus Estimate of $1,509 million.
Comparable sales declined 1.6% year over year compared with the Zacks Consensus Estimate’s dip of 2%. The decline in comparable sales was due to the company’s decision to exit unprofitable sales. The company ended the quarter with 1,382 stores in the United States, higher than the Zacks Consensus Estimate’s 1,378 stores. The company closed 16 stores in 2025.
Petco’s Margin & Cost Performance
Gross profit fell 1.4% year over year to $580.8 million in the quarter from the $589.3 million in the previous-year quarter. However, the gross margin rate increased 37 basis points - to 38.3%.
Selling, general and administrative (SG&A) expenses fell 3.9% year over year to $548.9 million from $571.9 million in the previous-year period. SG&A as a percentage of net sales reached 36.2%, reflecting 62 basis points of leverage from the previous-year period.
Operating profit grew 83.2% year over year to $31.9 million from $17.4 million in the previous year period. The operating margin also expandeda 98basis points to 2.1%, supported by a higher gross margin and expense leverage during the quarter.
Adjusted EBITDA increased 10.6% year over year to $106.3 million from $96.1 million, with the adjusted EBITDA margin rising 82 basis points from 6.2% in the prior year period to 7% of sales.
Petco’s Segmental Performance
In the fiscal fourth quarter, net sales for the Consumables category reached $759 million, declining 2.8% year over year from $781 million and missing the Zacks Consensus Estimate of $766 million.
Supplies and Companion Animals net sales also fell 5.5% year over year to $500 million from $529 million in the prior-year period, slightly below the Zacks Consensus Estimate of $503 million.
In contrast, the Services and other categories recorded growth, with net sales rising 5.8% year over year to $256 million from $242 million in the previous-year quarter, surpassing the Zacks Consensus Estimate of $241 million.
Petco’s Financial Health Snapshot
For the fiscal year, free cash flow reached was $187 million, rising 276.3% year over year. For fiscal 2025, cash and cash equivalents totaled at $256.7 million, up $91 million despite a voluntary $95 million debt repayment, with net debt standing at $1,241.5 million.
A Look Into Petco’s FY26 Guidance
For fiscal 2026, net sales are expected to be flat to up 1.5% versus compared with the last year. The company anticipates 15–20 net store closures in 2026, primarily weighted toward the back half of the year. Adjusted EBITDA is expected to be in the range between $415 million and $430 million, with capital expenditures of about $140 million.
For the first quarter of fiscal 2026, net sales are projected to be down 1% to flat year over year, and comp sales are expected to be roughly flat at the midpoint. Adjusted EBITDA is expected to be between $92 million and $94 million.
WOOF currently carries a Zacks Rank #3 (Hold). The stock has gained 1.3% in the past year compared with the industry’s growth of 32.7%.
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