Petco Reports Second Quarter 2026 Results

Petco posts modest Q2 2026 sales growth but sharply higher profit, reduces debt and reaffirms its full-year 2026 sales and Adjusted EBITDA outlook.

Rhea-AI Summary

Petco (WOOF) reported Q2 2026 results with net sales of $1.49 billion, up 0.05%, and comparable sales growth of 0.6%, delivering profitability ahead of its prior outlook.

Gross profit rose to $591.1 million with gross margin at 39.7%, including a $6.8 million net benefit from IEEPA tariff refunds. Operating income increased 11.1% to $47.8 million and net income climbed to $38.7 million versus $14.0 million a year ago. Adjusted EBITDA was $122.2 million, or $115.4 million on a normalized basis excluding the tariff benefit. Year-to-date free cash flow improved to $60.8 million from $9.9 million. Total debt decreased to $1.48 billion, and after quarter-end Petco voluntarily prepaid an additional $75 million of debt, bringing total prepayments to $170 million over nine months, as it works toward a 2x leverage target.

The company reaffirmed its full-year 2026 outlook, guiding net sales to flat to up 1.5% and Adjusted EBITDA to $415–$430 million, and issued Q3 2026 guidance for net sales growth of 0.4%–1.0% and Adjusted EBITDA of $100–$103 million.

Positive

• Comparable sales grew 0.6% in Q2 2026, marking a second consecutive quarter of positive comps.
• Net income rose to $38.7 million in Q2 2026 from $14.0 million a year earlier.
• Adjusted EBITDA increased to $122.2 million in Q2 2026 from $113.9 million, with normalized Adjusted EBITDA at $115.4 million.
• Free cash flow improved year-to-date to $60.8 million versus $9.9 million in the prior-year period.
• Total debt declined to $1.48 billion from $1.59 billion year over year, with an additional $75 million prepaid after quarter-end.
• FY 2026 outlook reaffirmed: net sales flat to up 1.5% and Adjusted EBITDA of $415–$430 million.

Negative

• Net sales growth in Q2 2026 was only 0.05% year over year to $1.49 billion.
• Normalized gross margin was about flat with the prior year when excluding the $6.8 million net tariff refund benefit.
• Membership program relaunch caused a sales disruption due to stronger-than-expected points redemption.
• Full-year net sales outlook implies only flat to low-single-digit growth for 2026.
• Net store closures are expected to be approximately 15–20 locations in fiscal 2026.
• Total debt remains elevated at $1.48 billion despite recent repayments.

News Explained

Petco’s debt is reported across two instruments, while higher Class A shares do not establish a quantified ownership change.

Petco reported its second-quarter results on September 2; its August 1 balance sheet records senior secured credit facilities and senior notes, showing that the disclosed debt obligation had been reconfigured into two reported instruments.

The release defines leverage as net debt divided by Adjusted EBITDA, so the stated path toward 2x concerns debt net of cash relative to a non-GAAP earnings measure, not an ownership percentage.

Class A shares issued and outstanding were 248.2 million on August 1 versus 243.7 million on January 31, while Class B-1 remained 37.8 million; under the supplied dilution definition, an issuance can reduce an existing holder's percentage ownership, but these disclosed counts do not quantify that effect.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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2^nd Consecutive Quarter of Positive Comparable Sales Growth

Delivered Q2 Profitability Ahead of Outlook

Announces $75 Million Debt Prepayment, Progressing Toward 2x Leverage¹Target

Reaffirms Fiscal 2026 Outlook

SAN DIEGO, Sept. 2, 2026 /PRNewswire/ -- Petco (Nasdaq: WOOF), the retailer "where the pets go" to find everything they need to live their best lives, today reported its second quarter 2026 financial results.

Joel Anderson, Chief Executive Officer of Petco, stated, "We delivered stronger than expected profitability in the quarter while achieving our second consecutive quarter of positive comps. We were pleased to see growth in consumables, which highlights that our 'Reach for the Sky' strategy is gaining traction. Looking ahead to the second half, we are positioned to benefit from several growth drivers and are pleased to reaffirm our full-year sales and profitability outlook. We remain confident in our ability to generate sustainable, long-term growth." 

Q2 2026 Overview

In the second quarter of 2026, the Company received substantially all IEEPA tariff refunds related to tariffs paid under IEEPA in 2025 and 2026. All results below include a net benefit of $6.8 million related to such refunds, representing the proceeds net of investments to propel the repositioning of new assortments for future growth, and to a lesser degree, offset incremental fuel and tariff expense in Q2.

For the second quarter of 2026 compared to the second quarter of 2025:

• Net sales of $1.5 billion increased 0.05%; comparable sales increased 0.6%. These results reflect a sales disruption from the initial stronger-than-expected points redemption from our membership program relaunch. Prior to the relaunch, sales were trending ahead of our Q2 outlook.
• Gross profit increased to $591.1 million; gross margin rate increased 37 basis points to 39.7% of net sales, compared to $585.3 million or 39.3% of net sales last year. Without the net benefit from the tariff refund, normalized gross margin was about flat with the prior year.
• Operating income increased 11.1% to $47.8 million compared to $43.0 million last year; operating margin increased 32 basis points to 3.2% compared to 2.9% of net sales last year.
• Net income increased to $38.7 million versus $14.0 million.
• Adjusted EBITDA² was $122.2 million versus $113.9 million. Without the net benefit from the tariff refund, normalized adjusted EBITDA was $115.4 million.
• The Company closed 1 net store, ending the quarter with 1,377 stores.

Sabrina Simmons, Chief Financial Officer of Petco, added, "We are pleased to deliver another quarter of positive comps and deliver on our bottom-line commitments as we execute on our economic model. Subsequent to the second quarter, we voluntarily prepaid an additional $75 million in debt, bringing our total prepayments to $170 million in the past nine months. Looking ahead, we are pleased to reaffirm our full-year sales and Adjusted EBITDA outlook, reflecting confidence in our second half strategic initiatives while remaining thoughtful about balancing the dynamic backdrop while investing behind our growth priorities."

Q2 2026 Balance Sheet and Cash Flow 

• Ending cash balance grew by $104.8 million to $293.5 million versus $188.7 million last year.
• Inventory decreased 1.1% year-over-year versus the 0.05% increase in net sales.
• Cash provided by operating activities year-to-date was $130.6 million compared to $70.4 million last year.
• Free cash flow² was $60.8 million year-to-date versus $9.9 million last year.
• Total debt was $1.48 billion, down from $1.59 billion last year.
• Subsequent to the second quarter, the Company prepaid $75.0 million in debt, underscoring its commitment to lowering its leverage ratio¹ to 2x.

2026 Outlook

The Company reaffirmed its full year 2026 net sales and Adjusted EBITDA² outlook, which includes net IEEPA tariff refunds of $6.8 million, and provided its outlook for the third quarter of 2026. Given the Company's solid profit performance in the first half of the year, the outlook provides the Company the flexibility to continue investing behind its growth initiatives in the second half, while also absorbing ongoing supply chain headwinds.

Assumptions in the outlook include that economic conditions, currency rates and the tax and regulatory landscape remain generally consistent, and that current or planned tariffs on imports into the U.S. from China and other countries as of September 2, 2026, will remain at current levels. Additionally, the outlook assumes no additional IEEPA tariff refunds are received for the balance of the year.

Full Year 2026 Outlook 

	FY 2026 Outlook*
Net Sales	Flat to up 1.5% year over year
Adjusted EBITDA2	$415 million to $430 million
Net Interest Expense	~$122 million
Capital Expenditures	~$140 million
Depreciation & Amortization	~$200 million
Net Store Closures	~15-20

 

Third Quarter 2026 Outlook

	Q3 2026 Outlook*
Net Sales	0.4% to 1.0% growth
Adjusted EBITDA2	$100 million to $103 million

(1)	Leverage ratio is defined as net debt divided by Adjusted EBITDA2
(2)	Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures

* Adjusted EBITDA is a non-GAAP financial measure and has not been reconciled to the most comparable GAAP outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management's control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide outlook for the comparable GAAP measures. Forward-looking estimates of Adjusted EBITDA are made in a manner consistent with the relevant definitions and assumptions noted herein and in our filings with the Securities and Exchange Commission.

 

Earnings Conference Call Webcast Information:

Management will host an earnings conference call on September 2, 2026 at approximately 4:15 PM Eastern Time to discuss the Company's financial results. A live webcast of the conference call will be available on the Company's Investor Relations page at https://ir.petco.com/news-and-events/events-and-presentations. A replay of the webcast will be available through the same link approximately two hours after the conference call. 

About Petco:

We're proud to be "where the pets go" to find everything they need to live their best lives for more than 60 years — from their favorite meals and toys, to trusted supplies and expert support from people who get it, because we live it. We believe in the universal truths of pet parenthood — the boundless boops, missing slippers, late night zoomies and everything in between. And we're here for it. Every tail wag, every vet visit, every step of the way. We nurture the pet-human bond in the aisles of more than 1,500 Petco stores across the U.S., Mexico and Chile. Customers experience our exclusive selection of pet care products, services, expertise and membership offerings in stores and online at petco.com, and on the Petco app. In 1999, we founded Petco Love. Together, we support thousands of local animal welfare groups nationwide and have helped find homes for over 7 million animals through in-store adoption events.

Forward-Looking Statements:

This earnings release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not statements of historical fact, including, but not limited to, statements regarding our Q3 and full year 2026 outlook, operational reset of our business, our competitive positioning, profitability, cash generation through our economic model, expense leverage, operating margin expansion, cost action plans and associated cost-savings, our path to sustainable, profitable growth and our expectations regarding tariffs, IEEPA tariff refunds and associated impacts. Such forward-looking statements can generally be identified by the use of forward-looking terms such as "believes," "expects," "may," "intends," "will," "shall," "should," "anticipates," "opportunity," "illustrative," "estimates," "projects", "forecasts" or the negative thereof or other variations thereon or comparable terminology. These statements are only predictions based on our current expectations and projections about future events and reflect our beliefs regarding such future events and do not represent historical facts or statements of current condition. Although Petco believes that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct or that any forward-looking results will occur or be realized. Nothing contained in this earnings release is, or should be relied upon as, a promise or representation or warranty as to any future matter, including any matter in respect of the operations or business or financial condition of Petco. All forward-looking statements are based on current expectations and assumptions about future events that may or may not be correct or necessarily take place and that are by their nature subject to significant uncertainties and contingencies, many of which are outside the control of Petco. Forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results or events to differ materially from the potential results or events discussed in the forward-looking statements, including, without limitation, those identified in this earnings release as well as the following: (i) increased competition (including from multi-channel retailers, mass and grocery retailers, and e-Commerce providers); (ii) reduced consumer demand for our products and/or services; (iii) our reliance on key vendors; (iv) our ability to attract and retain qualified employees; (v) risks arising from statutory, regulatory and/or legal developments; (vi) macroeconomic pressures in the markets in which we operate, including inflation, prevailing interest rates and the impact of tariffs and tariff refunds; (vii) failure to effectively manage our costs; (viii) our reliance on our information technology systems; (ix) our ability to prevent or effectively respond to a data privacy or security breach; (x) our ability to effectively manage or integrate strategic ventures, alliances or acquisitions and realize the anticipated benefits of such transactions; (xi) economic or regulatory developments that might affect our ability to provide attractive promotional financing; (xii) business interruptions and other supply chain issues; (xiii) catastrophic events, political tensions, conflicts and wars (such as the ongoing conflicts in Ukraine and the Middle East), government shutdowns, health crises, and pandemics; (xiv) our ability to maintain positive brand perception and recognition; (xv) product safety and quality concerns; (xvi) changes to labor or employment laws or regulations; (xvii) our ability to effectively manage our real estate portfolio; (xviii) constraints in the capital markets or our vendor credit terms; (xix) changes in our credit ratings; (xx) impairments of the carrying value of our goodwill and other intangible assets; (xxi) our ability to successfully implement our operational adjustments, achieve the expected benefits of our cost action plans and drive improved profitability; (xxii) our ability to deliver sustainable, profitable growth and (xxiii) the other risks, uncertainties and other factors identified under "Risk Factors" in our most recent Annual Report on Form 10-K and elsewhere in Petco's Securities and Exchange Commission filings. The occurrence of any such factors could significantly alter the results set forth in these statements.

Petco cautions that the foregoing list of risks, uncertainties and other factors is not complete, and forward-looking statements speak only as of the date they are made. Petco undertakes no duty to update publicly any such forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.

PETCO HEALTH AND WELLNESS COMPANY, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited and subject to reclassification)
		13 Weeks Ended				26 Weeks Ended
		August 1, 2026		August 2, 2025		August 1, 2026		August 2, 2025
Net sales:
Products		$    1,216,857		$    1,225,605		$    2,444,944		$    2,467,496
Services and other		272,363		262,924		541,008		514,432
Total net sales		1,489,220		1,488,529		2,985,952		2,981,928
Cost of sales:
Products		733,898		747,143		1,491,676		1,513,428
Services and other		164,175		156,067		328,704		313,213
Total cost of sales		898,073		903,210		1,820,380		1,826,641
Gross profit		591,147		585,319		1,165,572		1,155,287
Selling, general and administrative expenses		543,335		542,297		1,093,134		1,095,906
Operating income		47,812		43,022		72,438		59,381
Interest income		(2,493)		(909)		(3,989)		(2,268)
Interest expense		32,556		33,297		65,340		66,791
Loss on extinguishment and modification of debt		—		—		11,840		—
Income (loss) before income taxes and income from    equity method investees		17,749		10,634		(753)		(5,142)
Income tax (benefit) expense		(15,710)		746		(13,511)		1,241
Income from equity method investees		(5,201)		(4,084)		(10,756)		(8,694)
Net income attributable to Class A and B-1 common    stockholders		$         38,660		$         13,972		$         23,514		$           2,311
Net income per Class A and B-1 common share:
Basic		$              0.14		$              0.05		$              0.08		$              0.01
Diluted		$              0.13		$              0.05		$              0.08		$              0.01
Weighted average shares used in computing net income per Class A    and B-1 common share:
Basic		285,629		279,058		284,657		278,303
Diluted		290,497		285,741		289,691		284,350

 

PETCO HEALTH AND WELLNESS COMPANY, INC
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited and subject to reclassification)
		August 1, 2026		January 31, 2026
ASSETS
Current assets:
Cash and cash equivalents		$       293,498		$       256,736
Receivables, less allowance for credit losses1		38,386		45,812
Merchandise inventories, net		601,591		590,210
Prepaid expenses		54,433		51,747
Other current assets		65,190		75,281
Total current assets		1,053,098		1,019,786
Fixed assets		2,433,782		2,378,208
Less accumulated depreciation		(1,803,480)		(1,722,060)
Fixed assets, net		630,302		656,148
Operating lease right-of-use assets		1,268,518		1,288,593
Goodwill		980,064		980,064
Trade name		1,025,000		1,025,000
Other long-term assets		209,668		203,834
Total assets		$    5,166,650		$    5,173,425
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and book overdrafts		$       455,314		$       450,552
Accrued salaries and employee benefits		132,518		154,148
Accrued expenses and other liabilities		225,908		204,751
Current portion of operating lease liabilities		340,643		320,082
Current portion of long-term debt and other lease liabilities		12,061		4,608
Total current liabilities		1,166,444		1,134,141
Senior secured credit facilities, net, excluding current portion		872,798		1,488,527
Senior notes, net		590,567		-
Operating lease liabilities, excluding current portion		1,005,146		1,047,185
Deferred taxes, net		246,861		234,911
Other long-term liabilities		77,907		104,407
Total liabilities		3,959,723		4,009,171
Commitments and contingencies
Stockholders' equity:
Class A common stock2		248		244
Class B-1 common stock3		38		38
Class B-2 common stock4		—		—
Preferred stock5		—		—
Additional paid-in-capital		2,328,170		2,312,354
Accumulated deficit		(1,116,479)		(1,139,993)
Accumulated other comprehensive loss		(5,050)		(8,389)
Total stockholders' equity		1,206,927		1,164,254
Total liabilities and stockholders' equity		$    5,166,650		$    5,173,425

1	Allowances for credit losses are $801 and $779, respectively
2	Class A common stock, $0.001 par value: Authorized - 1.0 billion shares;      Issued and outstanding - 248.2 million and 243.7 million shares, respectively
3	Class B-1 common stock, $0.001 par value: Authorized - 75.0 million shares;      Issued and outstanding - 37.8 million shares
4	Class B-2 common stock, $0.000001 par value: Authorized - 75.0 million shares;       Issued and outstanding - 37.8 million shares
5	Preferred stock, $0.001 par value: Authorized - 25.0 million shares;      Issued and outstanding - none

 

PETCO HEALTH AND WELLNESS COMPANY, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited and subject to reclassification)
		26 Weeks Ended
		August 1, 2026		August 2, 2025
Cash flows from operating activities:
Net income		$         23,514		$            2,311
Adjustments to reconcile net income to net cash provided by   operating activities:
Depreciation and amortization		99,440		99,171
Amortization of debt discounts and issuance costs		2,689		2,499
Provision for deferred taxes		(1,439)		1,113
Equity-based compensation		18,051		18,209
Loss on extinguishment and modification of debt		11,840		—
Income from equity method investees		(10,756)		(8,694)
Amounts reclassified out of accumulated other comprehensive loss		(24)		(413)
Non-cash operating lease costs		206,243		205,005
Changes in assets and liabilities:
Receivables		7,427		5,783
Merchandise inventories		(11,381)		44,823
Prepaid expenses and other assets		3,696		(9,487)
Accounts payable and book overdrafts		5,084		(69,691)
Accrued salaries and employee benefits		(21,628)		(26,729)
Accrued expenses and other liabilities		20,722		14,508
Operating lease liabilities		(209,279)		(206,414)
Other long-term liabilities		(13,615)		(1,556)
Net cash provided by operating activities		130,584		70,438
Cash flows from investing activities:
Cash paid for fixed assets		(69,788)		(60,516)
Insurance recoveries		422		—
Proceeds from sale of assets		—		2,425
Cash received from partial surrender of officers' life insurance		74		—
Net cash used in investing activities		(69,292)		(58,091)
Cash flows from financing activities:
Borrowings under long-term debt agreements		1,500,000		—
Repayments of long-term debt		(1,502,250)		—
Debt refinancing costs and original issue discount		(28,442)		—
Payments for finance lease liabilities		(3,172)		(3,252)
Proceeds from employee stock purchase plan and stock option exercises		1,923		1,998
Tax withholdings on stock-based awards		(4,261)		(3,026)
Net cash used in financing activities		(36,202)		(4,280)
Net increase in cash, cash equivalents and restricted cash		25,090		8,067
Cash, cash equivalents and restricted cash at beginning of period		269,412		181,665
Cash, cash equivalents and restricted cash at end of period		$       294,502		$       189,732

 

NON-GAAP FINANCIAL MEASURES

The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The Company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.

Adjusted EBITDA

Adjusted EBITDA is considered a non-GAAP financial measure under the Securities and Exchange Commission's (SEC) rules because it excludes certain amounts included in net income calculated in accordance with GAAP. Management believes that Adjusted EBITDA is a meaningful measure to share with investors because it facilitates comparison of the current period performance with that of the comparable prior period. In addition, Adjusted EBITDA affords investors a view of what management considers to be Petco's core operating performance as well as the ability to make a more informed assessment of such operating performance as compared with that of the prior period. Please see the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the SEC on March 13, 2026 for additional information on Adjusted EBITDA.

The table below reflects the calculation of Adjusted EBITDA for the thirteen and twenty-six weeks ended August 1, 2026 compared to the thirteen and twenty-six weeks ended August 2, 2025.

(dollars in thousands)		13 Weeks Ended				26 Weeks Ended
Reconciliation of Net Income Attributable to Class A and B-1    Common Stockholders to Adjusted EBITDA		August 1, 2026		August 2, 2025		August 1, 2026		August 2, 2025
Net income attributable to Class A and B-1 common stockholders		$         38,660		$         13,972		$         23,514		$           2,311
Add (deduct):
Interest expense, net		30,063		32,388		61,351		64,523
Income tax (benefit) expense		(15,710)		746		(13,511)		1,241
Depreciation and amortization		50,399		49,360		99,440		99,171
Income from equity method investees		(5,201)		(4,084)		(10,756)		(8,694)
Loss on extinguishment and modification of debt		—		—		11,840		—
Equity-based compensation		8,600		8,789		18,051		18,209
Mexico joint venture EBITDA (1)		13,139		10,360		26,055		20,558
Other costs (2)		2,269		2,329		3,566		5,990
Adjusted EBITDA		$       122,219		$       113,860		$       219,550		$       203,309
Net sales		$    1,489,220		$    1,488,529		$    2,985,952		$    2,981,928
Net margin (3)		2.6 %		0.9 %		0.8 %		0.1 %
Adjusted EBITDA Margin		8.2 %		7.6 %		7.4 %		6.8 %

(1)

Mexico joint venture EBITDA represents 50 percent of the entity's operating results for all periods, as adjusted to reflect the results on a basis comparable to Adjusted EBITDA. In the financial statements, this joint venture is accounted for as an equity method investment and reported net of depreciation and income taxes because such a presentation would not reflect the adjustments made in the calculation of Adjusted EBITDA, we include the 50 percent interest in the Company's Mexico joint venture on an Adjusted EBITDA basis to ensure consistency. The table below presents a reconciliation of Mexico joint venture net income to Mexico joint venture EBITDA.

 

		13 Weeks Ended				26 Weeks Ended
(in thousands)		August 1, 2026		August 2, 2025		August 1, 2026		August 2, 2025
Net income		$         10,402		$            8,167		$         21,506		$         17,387
Depreciation		8,838		6,793		17,144		13,390
Income tax expense		5,216		3,935		10,410		8,101
Foreign currency loss		326		696		470		404
Interest expense, net		1,496		1,129		2,579		1,833
EBITDA		$         26,278		$         20,720		$         52,109		$         41,115
50% of EBITDA		$         13,139		$         10,360		$         26,055		$         20,558

(2)	Other costs include, as incurred: restructuring costs and restructuring-related severance costs; legal reserves associated with significant, non-ordinary course legal or regulatory matters; and costs related to certain significant strategic transactions.
(3)	We define net margin as net loss attributable to Class A and B-1 common stockholders divided by net sales and Adjusted EBITDA margin as Adjusted EBITDA divided by net sales.

 

Free Cash Flow

Free Cash Flow is a non-GAAP financial measure that is calculated as net cash provided by operating activities less cash paid for fixed assets. Management believes that Free Cash Flow, which measures the ability to generate additional cash from business operations, is an important financial measure for use in evaluating the Company's financial performance.

The table below reflects the calculation of Free Cash Flow for the thirteen and twenty-six weeks ended August 1, 2026 compared to the thirteen and twenty-six weeks ended August 2, 2025.

(in thousands)		13 Weeks Ended				26 Weeks Ended
		August 1, 2026		August 2, 2025		August 1, 2026		August 2, 2025
Net cash provided by operating activities		$      161,553		$        85,892		$      130,584		$        70,438
Cash paid for fixed assets		(31,635)		(32,104)		(69,788)		(60,516)
Free Cash Flow		$     129,918		$        53,788		$        60,796		$          9,922

 

Net Debt 

The table below reflects the calculation for net debt as of August 1, 2026 compared to January 31, 2026 and August 2, 2025.

(dollars in thousands)		August 1, 2026		January 31, 2026		August 2, 2025
Total debt:
Senior secured credit facilities, net, including current portion		$            881,798		$         1,488,527		$         1,580,688
Senior notes, net		590,567		—		—
Finance leases, including current portion		7,542		9,683		12,012
Total debt		1,479,907		1,498,210		1,592,700
Less: cash and cash equivalents		(293,498)		(256,736)		(188,748)
Net Debt		$         1,186,409		$         1,241,474		$         1,403,952

 

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SOURCE Petco - Investor Relations

FAQ

How did Petco (WOOF) perform financially in Q2 2026?

In Q2 2026, Petco reported net sales of $1.49 billion, up 0.05% year over year, with comparable sales growth of 0.6%. Net income increased to $38.7 million from $14.0 million, and Adjusted EBITDA rose to $122.2 million from $113.9 million.

What was Petco (WOOF)'s gross margin and profit in Q2 2026?

Gross profit in Q2 2026 was $591.1 million, with a gross margin of 39.7% of net sales, up 37 basis points year over year. Operating income was $47.8 million, an 11.1% increase, and net income reached $38.7 million.

How much did Petco (WOOF) benefit from IEEPA tariff refunds in Q2 2026?

Petco received substantially all IEEPA tariff refunds related to 2025 and 2026 tariffs in Q2 2026, resulting in a net benefit of $6.8 million. This figure reflects proceeds net of investments in new assortments and offsets to incremental fuel and tariff expenses.

What is Petco (WOOF)'s debt and leverage progress as of Q2 2026?

Total debt at the end of Q2 2026 was $1.48 billion, down from $1.59 billion a year earlier. After quarter-end, Petco voluntarily prepaid an additional $75 million in debt, bringing total prepayments to $170 million over nine months, as it works toward a 2x leverage target.

What free cash flow did Petco (WOOF) generate year-to-date in 2026?

Year-to-date in 2026, Petco generated free cash flow of $60.8 million, compared to $9.9 million in the same period of 2025. Cash provided by operating activities was $130.6 million, up from $70.4 million a year earlier.

What is Petco (WOOF)'s full-year 2026 financial outlook?

For full-year 2026, Petco expects net sales to be flat to up 1.5% year over year and Adjusted EBITDA of $415 million to $430 million. The outlook includes $6.8 million of net IEEPA tariff refunds and assumes no additional refunds.

What guidance did Petco (WOOF) give for Q3 2026?

For Q3 2026, Petco guides net sales growth of 0.4% to 1.0% and Adjusted EBITDA of $100 million to $103 million. This guidance reflects ongoing investment in growth initiatives and anticipated supply chain headwinds.