Petco Health Shares Soar 18.89% on Strong Earnings

On August 29, 2025, Petco Health shares surged by 18.89% in pre-market trading, marking a significant rise in investor confidence.

Petco Health and Wellness Company reported better-than-expected second-quarter earnings, which drove the stock surge. The company's adjusted earnings per share of $0.05 exceeded analyst estimates of $0.01. Despite a slight decline in sales, Petco's profitability metrics showed significant improvement, with a gross profit margin expansion of approximately 120 basis points to 39.3% of net sales. Operating income improved by $40.6 million to $43.0 million, and adjusted EBITDA increased by $30.3 million to $113.9 million.

Petco's Chief Executive Officer, Joel Anderson, highlighted the company's commitment to its transformation and the strengthening of its economic model. The company raised its full-year adjusted EBITDA guidance to between $385 million and $395 million, exceeding the analyst consensus estimate. For the third quarter, Petco expects adjusted EBITDA of $92 million to $94 million, above the consensus estimate.

The company's strategic initiatives, including aligning with trends like pet humanization and e-commerce dominance, are expected to drive future growth. The U.S. pet care market, projected to reach $157 billion by 2025, offers significant tailwinds for Petco's continued success.