Petco Health 2025 Q2 Earnings Strong Performance as Net Income Surges 156.3%

Petco Health (WOOF) reported fiscal 2025 Q2 earnings on Aug 28th, 2025, showcasing a strong turnaround with profitability restored and a significant increase in net income. The results exceeded expectations with a notable improvement in operating performance and the company raised its full-year adjusted EBITDA guidance. Revenue The company’s total revenue declined by 2.3% to $1.49 billion in 2025 Q2, compared to $1.52 billion in the prior-year period. While revenue was below the same period in 2025, the company remained focused on operational efficiency and cost control. Earnings/Net Income Petco Health returned to profitability in Q2, reporting an EPS of $0.05, a dramatic turnaround from a loss of $0.09 in the prior-year period, representing a 155.6% positive change. Net income surged to $13.97 million in 2026 Q2, a 156.3% increase from a net loss of $24.82 million in the same period last year, signaling a strong operational recovery. This significant improvement in net income demonstrates the company’s successful cost management and restructuring efforts. Price Action The stock price of Petco Health has edged down 0.00% during the latest trading day, with a 0.92% decline over the past full trading week, but has gained 0.31% month-to-date. Post Earnings Price Action Review A strategy of buying WOOF following earnings beats and selling after 30 days resulted in a -85.18% return, significantly underperforming the 41.61% benchmark return. The approach showed a negative Sharpe ratio of -0.55 and high volatility of 71.71%, despite a maximum drawdown of 0.00%. The negative CAGR of -39.80% over the backtested period indicates the strategy struggled to deliver consistent returns, despite efforts to preserve capital.

CEO Commentary CEO Joel D. Anderson highlighted Petco’s progress in strengthening its operating model and retail fundamentals, positioning the company for sustainable, profitable growth. He emphasized a 60th-anniversary celebration and the relaunched “Where the Pets Go” tagline to enhance brand relevance. Q2 results included $114 million in adjusted EBITDA, $40 million in operating income growth, and over $50 million in free cash flow. Anderson outlined Phase 3 as a return to growth through marketing, merchandising, and store execution, with optimism about the cultural shift and operational rigor. Guidance Petco raised its 2025 adjusted EBITDA guidance to $385–$395 million, up 16% at the midpoint, with Q3 expected at $92–$94 million. The company expects low single-digit net sales declines year-to-date, along with $200 million in depreciation, $130 million in net interest expense, 25 net store closures, and $125–$130 million in CAPEX. Tariffs are expected to impact Q3 and Q4, while reinvestment in growth initiatives will begin alongside continued bottom-line improvements. Additional News Yahoo announced that as of November 1st, 2021, its suite of services will no longer be accessible from mainland China, while remaining unaffected in all other global locations. This decision reflects ongoing regulatory and market access challenges in the region. Yahoo products and services continue to operate normally outside of mainland China, and the company expressed gratitude for its support and readership. The move does not involve earnings-related financial metrics, mergers and acquisitions, or C-level executive changes, but underscores the broader geopolitical considerations impacting global tech firms.