Petco Health 2026 Q3 Earnings Profitability Returns with 156.0% Net Income Surge

Petco Health (WOOF) reported fiscal 2026 Q3 earnings on Dec 5, 2025, marking a return to profitability after a year-ago loss. The company delivered a 156.0% improvement in net income to $9.33 million and a 150.0% positive EPS swing to $0.03, despite a 3.1% revenue decline. Strategic cost management and operational efficiency drove the turnaround, though shares underperformed post-earnings.

Revenue

Total revenue fell to $1.46 billion in Q3 2026, reflecting reduced transaction volumes and fewer pet care centers. Product sales accounted for $1.21 billion, while services and other revenue contributed $254.81 million. The decline in product categories like consumables (-2.9%) and supplies (-6.2%) contrasted with a 2.6% increase in services, underscoring strategic investments in customer engagement.

Earnings/Net Income

Petco Health reversed a $16.67 million net loss in Q3 2025 to a $9.33 million profit in 2026 Q3, with EPS rising from -$0.06 to $0.03. The 150.0% EPS improvement and 156.0% net income swing highlight operational resilience amid market challenges.

Price Action

Shares of WOOF fell 2.90% on the latest trading day, 5.94% for the week, and 3.22% month-to-date, reflecting cautious investor sentiment post-earnings.

Post-Earnings Price Action Review

The strategy of buying WOOF after a positive earnings beat and holding for 30 days underperformed the benchmark by 138.12%, returning -85.97%. With a Sharpe ratio of -0.53 and no maximum drawdown, the strategy signaled elevated risk and volatility.

CEO Commentary

The CEO emphasized progress in cost optimization and service utilization, noting gross profit improved to 38.9% from 38.1% in the prior year. Strategic consolidation of underperforming pet care centers (from 1,413 to 1,389) and a focus on high-margin services were highlighted as key drivers. The leadership tone balanced optimism about operational improvements with caution about macroeconomic headwinds.

Guidance

While the company did not provide explicit forward-looking guidance, Q3 results suggest continued prioritization of cost discipline and service offerings. Analysts project a 32.01% upside to $4.00 per share within 12 months, per Evercore ISI’s latest price target.

Additional News

Recent non-earnings developments include a strategic reduction in U.S. and Puerto Rico pet care centers, reflecting a shift to high-performing locations. Evercore ISI reaffirmed an in-line rating with a $4.00 price target, while B of A Securities downgraded the stock to $1.5 in April 2024. The 10-Q report also detailed a 2.6% services growth, driven by customer acquisition and retention initiatives.