Petco's Aggressive Growth Plan Raises Short Squeeze Concerns

Petco Health and Wellness (WOOF) has reported earnings that beat profitability targets and outlined an aggressive growth plan for 2026. The pet retailer's stock is up over 40% in the past week, and nearly 17% of the float is sold short, setting up a potential short squeeze. Petco has cut unprofitable sales, closed underperforming stores, and strengthened its balance sheet, with free cash flow up 77% and leverage falling to 3x net debt-to-EBITDA.