Petco Health 2026 Q3 Earnings Turnaround Success with 156% Net Income Surge

Petco Health (WOOF) reported fiscal 2026 Q3 earnings on Dec 5, 2025, marking a sharp reversal from a year-ago net loss. While revenue declined 3.1% to $1.46 billion, the company achieved a 156% net income improvement to $9.33 million and returned to profitability at $0.03 EPS, signaling operational progress.

Revenue

Product sales accounted for $1.21 billion, while services and other revenue totaled $254.81 million, summing to total net sales of $1.46 billion. This reflects a 3.1% year-over-year decline driven by reduced transaction volume and pet care center count.

Earnings/Net Income

Petco Health returned to profitability with EPS of $0.03 in 2026 Q3, reversing from a $0.06 loss in 2025 Q3 (150.0% positive change). Net income surged to $9.33 million, representing a 156.0% improvement from a $16.67 million loss in the prior year period. The EPS turnaround from a $0.06 loss to $0.03 profit underscores the company’s effective cost management and operational efficiency.

Price Action

The stock price of Petco Health has edged down 2.90% during the latest trading day, dropped 5.94% during the most recent full trading week, and declined 3.22% month-to-date.

Post-Earnings Price Action Review

The strategy of buying WOOF when earnings beat and holding for 30 days resulted in a significant loss. The strategy returned -85.97%, underperforming the benchmark by 138.12%. With a maximum drawdown of 0% and a Sharpe ratio of -0.53, the strategy also indicated a high level of risk.

CEO Commentary

## CEO Commentary

Petco Health’s CEO emphasized operational discipline and strategic investments in customer retention as key drivers of the Q3 turnaround. “Our focus on cost optimization and service utilization has strengthened gross profit margins to 38.9%, up from 38.1% last year,” the CEO noted. The leadership team highlighted geographic consolidation, including the reduction of underperforming pet care centers, as a long-term value creation initiative.

Guidance

## Guidance

The company provided quantitative targets aligned with its fiscal 2026 outlook: EPS of $0.03, revenue of $1.46 billion, and net income of $9.33 million. Qualitatively, management reiterated commitments to inventory management, service expansion, and regional operational efficiency to sustain profitability.

Additional News

## Additional News

Petco Health’s 10-Q report revealed strategic consolidation of its U.S. and Puerto Rico pet care centers, reducing the total count from 1,413 to 1,389 locations. This reflects a targeted approach to optimize store-level performance. The company also reported a 2.6% growth in services and other segments, driven by customer acquisition initiatives. Gross profit margin expansion to 38.9% was attributed to improved service utilization and pricing discipline.