Petco Reports Third Quarter Financial Results for 2025
Upwardly Revises Fiscal 2025 Earnings Outlook
Today, Petco (NASDAQ: WOOF) announced their financial outcomes for the third quarter of 2025, outlining the company’s performance metrics and giving insight into their strategic outlook for growth in the coming fiscal period.
Third Quarter Insights
In Q3 2025, Petco revealed net sales amounting to $1.5 billion, indicating a decrease of 3.1% year-over-year. This trend aligns with the company's anticipated third-quarter outlook. The comparable sales also reflected a decline of 2.2% over the same timeframe. However, notably, the gross profit margin has improved about 75 basis points, reaching 38.9% as a percentage of net sales.
Key Performance Metrics
- Operating income rose by $25.2 million, settling at $29.2 million.
- GAAP net income increased to $9.3 million, an improvement of $26.0 million from the previous year.
- Adjusted EBITDA surged to $98.6 million, reflecting an increase of $17.3 million year-over-year.
Joel Anderson, Petco's Chief Executive Officer, emphasized the company’s commitment to profitability: "Once again, we delivered on Petco's profitability goals as we continue to execute on our multi-phased transformation. Rebuilding the base of our economic model has been a priority in 2025, setting the foundation for a return to growth during fiscal 2026."
Full Year Allocation and Adjustments
The company fine-tuned its full-year net sales forecast, upwardly adjusting its earnings guidance for fiscal 2025. The midpoint of its expected adjusted EBITDA range has been raised by $6 million, which signals positive indicators for the upcoming fourth quarter of 2025.
Future Projections
For the complete fiscal year of 2025, Petco anticipates a decrease in net sales of approximately 2.5% - 2.8%. They forecast an Adjusted EBITDA in the range of $395 million to $397 million, while maintaining a net interest expense around $125 million and capital expenditures between $125 million and $130 million.
Fourth Quarter Forecast
Looking ahead to Q4 2025, Petco expects net sales to decrease by low single digits compared to the previous year, alongside an anticipated adjusted EBITDA between $93 million and $95 million. These forecasts rest on assumptions that economic conditions and the regulatory environment will largely remain constant.
About Petco
Petco has been a trusted provider in the pet retail sector for over sixty years, delivering essential products and services for pets. With over 1,500 locations across the U.S., Mexico, and Puerto Rico, Petco aims to strengthen the bond between pets and their owners through a wide array of products, expert support, and community engagement. The company has successfully supported numerous animal welfare efforts, helping to find homes for over 7 million animals via in-store adoption events.
Frequently Asked Questions
What were Petco’s net sales in Q3 2025?
Petco reported net sales of $1.5 billion in the third quarter of 2025.
How did comparable sales perform year-over-year?
Comparable sales decreased by 2.2% year-over-year in Q3 2025.
What improvements did Petco see in its gross profit margin?
The gross profit margin widened by approximately 75 basis points, reaching 38.9% of net sales.
What is Petco's outlook for Q4 2025?
Petco anticipates net sales will decline by low single digits year-over-year in the fourth quarter of 2025, with an Adjusted EBITDA of $93 million to $95 million.
How has Petco contributed to animal welfare?
Petco has played a significant role in animal welfare, assisting local groups and facilitating over 7 million animal adoptions through their stores.
