Petco Health & Wellness recently released its 10-Q report. Petco Health and Wellness Company, Inc. operates as a pet specialty retailer in the United States, Mexico, Puerto Rico, and Chile, with a mix of stores, digital commerce, and services. Its business includes veterinary care, grooming, training, pet care supplies, and companion animals, along with products sold under brands such as WholeHearted, Reddy, So Phresh, and Well & Good.
In Item 2, Management’s Discussion and Analysis, Petco said its 13-week period ended August 1, 2026 produced net sales of $1.49 billion, essentially flat from $1.49 billion a year earlier, while comparable sales rose 0.6% after a 1.4% decline in the prior-year quarter. Gross profit increased to $591.1 million from $585.3 million, and gross margin improved to 39.7% from 39.3%. Operating income rose to $47.8 million from $43.0 million, helped by a $6.8 million net incremental tariff refund, and net income attributable to Class A and B-1 common stockholders increased to $38.7 million from $14.0 million. Adjusted EBITDA climbed to $122.2 million from $113.9 million.
For the 26-week period, net sales were $2.99 billion, up from $2.98 billion, and comparable sales were up 0.6% versus down 1.3% a year earlier. Gross profit reached $1.17 billion, compared with $1.16 billion, and operating income improved to $72.4 million from $59.4 million. Net income attributable to Class A and B-1 common stockholders increased to $23.5 million from $2.3 million, while Adjusted EBITDA rose to $219.6 million from $203.3 million.
Petco ended the period with 1,377 U.S. pet care centers, down from 1,388 a year earlier. Product sales in the quarter were $1.22 billion, down from $1.23 billion, while services and other sales rose to $272.4 million from $262.9 million. Within products, consumables increased to $731.3 million from $729.9 million, while supplies and companion animals declined to $485.6 million from $495.7 million. The company said the quarter reflected a temporary disruption tied to a stronger-than-expected response to its membership program relaunch, but services growth and positive consumables trends offset part of that pressure.
SG&A expenses were $543.3 million in the quarter, up slightly from $542.3 million, and represented 36.5% of net sales versus 36.4% a year earlier. The company said the increase was driven mainly by higher advertising and depreciation expense and higher employee fringe benefits, partly offset by lower payroll and other compensation costs. For the 26-week period, SG&A fell to $1.09 billion from $1.10 billion, or 36.6% of net sales versus 36.8% a year earlier.
Interest expense declined to $32.6 million in the quarter from $33.3 million, and to $65.3 million for the half-year from $66.8 million, reflecting a lower outstanding principal balance of debt, partly offset by higher interest rates. Petco recorded an $11.8 million loss on extinguishment and modification of debt in the 26-week period tied to its February 2, 2026 refinancing transaction. The company reported income tax benefits of $15.7 million in the quarter and $13.5 million for the half-year, compared with tax expense of $0.7 million and $1.2 million in the prior-year periods. Following these announcements, the company's shares moved 7.14%, and are now trading at a price of $2.70. If you want to know more, read the company's complete 10-Q report here.
