#United States #San Diego #Q1 2025 #Petco Health #Woof

Petco Health and Wellness Company, Inc. Reports First Quarter 2025 Financial Results

Petco Health and Wellness Company, Inc. (Nasdaq: WOOF) has announced its financial results for the first quarter of 2025, reflecting a decrease in net sales alongside some positive developments in profitability measures. The pet care giant recorded net sales of $1.5 billion, a decrease of 2.3% year-over-year, which is aligned with the company's previously issued first-quarter outlook. Meanwhile, comparable sales exhibited a slight retreat of 1.3%.

A closer inspection of the financial performance reveals that Petco saw an improvement in its gross profit margin, which expanded by approximately 30 basis points to 38.2% as a percentage of net sales. Notably, the company reported an operating income of $16.4 million, reflecting an increase of $33.1 million from the previous year. This progress was underscored by a decrease in GAAP net loss, which improved $34.8 million to $11.7 million compared to the same quarter last year. Additionally, Adjusted EBITDA also increased by $13.8 million to reach $89.4 million, indicating a robust operational foundation despite the dip in net sales.

Joel Anderson, CEO of Petco, expressed his satisfaction with the first-quarter results, stating, "We are pleased to deliver first quarter earnings results ahead of our guidance and to reaffirm our outlook for fiscal 2025 which now incorporates the impact of tariffs. This performance is a testament to the execution of our nearly 30,000 team members and the resilience of the category in which we operate."

Anderson continued, emphasizing the company's strategic focus: "We entered the year with a detailed, phased strategy to strengthen retail fundamentals across our operating model and return the business to sustainable, profitable growth. The current backdrop has served as a catalyst to accelerate the work that was already underway. We are pleased with the progress we are continuing to drive, and our entire team remains focused on executing our plans and driving the performance we know this business is capable of."

Looking ahead, Petco reaffirmed its full-year 2025 net sales and earnings outlook. The company anticipates that net sales will decline in the low single digits compared to the previous year, with Adjusted EBITDA projected to fall between $375 million and $390 million. It also expects net interest expense to be approximately $130 million, and anticipates capital expenditures to range from $125 million to $130 million.

For the second quarter of 2025, Petco maintains a similar outlook, projecting comparable net sales to decrease in the low single digits year over year, while forecasting Adjusted EBITDA between $92 million and $94 million. These projections are contingent upon economic conditions, currency rates, and regulatory landscapes remaining stable, alongside current tariff levels on imports from China and other countries.

In conclusion, although Petco's first quarter results indicate a decrease in net sales, the company continues to show optimism and a commitment to long-term growth. The strategic initiatives it has implemented are expected to bolster its performance moving forward, even as external economic factors present challenges. As Petco navigates these dynamics, its emphasis on pet health and wellness remains a fundamental aspect of its business model.