Petco Reports Slight Increase in Net Sales and Significant Net Income Growth in Q2 Fiscal 2026

Petco Health and Wellness Company, Inc. reported its financial results for the second quarter of fiscal 2026, revealing a slight increase in net sales to $1.49 billion, compared to $1.49 billion in the same period last year. For the first half of the fiscal year, total net sales reached $2.99 billion, up from $2.98 billion in the prior year. The company experienced a comparable sales increase of 0.6% during the quarter, driven by growth in its services segment, which saw a 3.6% increase in sales. However, product sales in the consumables category remained relatively flat, and the overall pet care center count decreased, impacting sales performance.

The company's operating income for the quarter was $47.8 million, an increase from $43.0 million in the previous year, aided by a $6.8 million net incremental tariff refund. Net income attributable to Class A and B-1 common stockholders surged to $38.7 million, compared to $14.0 million in the same quarter last year. The increase in profitability was also reflected in the Adjusted EBITDA, which rose from $113.9 million to $122.2 million, inclusive of the tariff refund. The gross profit margin improved to 39.7%, up from 39.3% in the prior year, primarily due to the tariff refunds and effective cost management strategies.

In terms of operational developments, Petco continues to focus on enhancing its digital capabilities and customer engagement through its e-commerce platform and mobile app. The company operates over 1,500 stores across the U.S., Mexico, and Chile, and is committed to improving the pet-human bond through various initiatives, including partnerships with local animal welfare organizations. The company’s strategic focus on customer retention and service optimization is expected to drive future growth.

Petco's financial position remains stable, with total assets amounting to $5.17 billion and total liabilities of $4.01 billion as of August 1, 2026. The company reported cash and cash equivalents of $293.5 million, alongside $487.6 million available under its asset-based revolving credit facility. The company’s liquidity position is bolstered by strong operating cash flows, which increased to $130.6 million for the first half of the fiscal year, compared to $70.4 million in the same period last year.

Looking ahead, Petco acknowledges the potential impact of macroeconomic factors such as inflation, interest rates, and supply chain constraints on its operations. The company remains focused on executing its growth strategies while managing costs effectively. Petco's management believes that its current resources, combined with anticipated cash flows, will be sufficient to support operations and planned capital investments for the foreseeable future.