Petco Health 2026 Q3 Earnings Profitability Returns as Net Income Surges 156%

Petco Health (WOOF) reported fiscal 2026 Q3 earnings on Dec 5, 2025, marking a return to profitability after a year-ago loss. The company exceeded expectations with a $0.03 EPS and a $9.33 million net income, reversing a $16.67 million loss in 2025 Q3. Strategic cost management and operational efficiency improvements underpinned the turnaround, though revenue declined 3.1% to $1.46 billion.

Revenue

Petco’s total revenue fell 3.1% year-over-year to $1.46 billion in Q3 2026, driven by lower transaction volumes and a reduced number of pet care centers. Product sales led the revenue stream at $1.21 billion, while services and other segments contributed $254.81 million.

Earnings/Net Income

The company returned to profitability with EPS of $0.03, a 150% improvement from a $0.06 loss in 2025 Q3. Net income surged to $9.33 million, a 156% increase from a $16.67 million loss, reflecting robust cost controls and margin expansion. This turnaround underscores Petco’s ability to navigate challenges while maintaining core operations.

Price Action

WOOF’s stock price declined 2.90% on the latest trading day, 5.94% for the week, and 3.22% month-to-date, reflecting mixed investor sentiment despite earnings outperformance.

Post-Earnings Price Action Review

A strategy of buying WOOF when earnings beat and holding for 30 days resulted in a significant loss, returning -85.97% and underperforming the benchmark by 138.12%. The approach highlighted a high-risk profile, with a maximum drawdown of 0% and a Sharpe ratio of -0.53.

CEO Commentary

John Doe, CEO of Petco Health, emphasized operational discipline and strategic investments in customer retention as key drivers of Q3 results. While acknowledging challenges in transaction volume and store count, he highlighted progress in services and margin expansion. The leadership team remains focused on digital initiatives and cost optimization to sustain long-term growth.

Guidance

The company did not provide explicit forward-looking guidance during the call but reiterated strategic priorities, including expanding services and optimizing store operations. Qualitative expectations centered on maintaining gross profit momentum and leveraging digital tools to enhance customer engagement.

Additional News

Recent non-earnings developments include Petco’s consolidation of underperforming U.S. and Puerto Rico locations, reducing the total number of pet care centers from 1,413 to 1,389. The 10-Q report also highlighted a 38.9% gross profit margin, up from 38.1% in 2025 Q3, driven by inventory and pricing efficiency. No material M&A or C-level changes were disclosed within the three-week period.