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Aug 02
Petco Q2 2025 Earnings Report
Petco returned to profitability in Q2 2025 with improved margins despite a decline in sales.
Key Takeaways
Petco posted a modest net profit in Q2 2025 as it improved operating income and gross margins. While sales declined year-over-year, strong execution led to raised full-year earnings guidance.
Net sales declined 2.3% YoY to $1.49 billion
GAAP net income improved to $13.97 million from a loss of $24.82 million
Operating income jumped to $43 million, up $40.6 million YoY
Adjusted EBITDA increased to $113.86 million, with a margin of 7.6%
Petco
Petco
Petco Revenue by Segment
Revenue by Segment
Products Revenue
CapyFin.comServices and Other Revenue
CapyFin.com Forward Guidance
Petco raised its FY25 earnings outlook while maintaining its sales outlook, expecting adjusted EBITDA between $385M–$395M.
Positive Outlook
- Raised full-year 2025 earnings outlook
- Q3 adjusted EBITDA expected between $92M–$94M
- Solid operating income improvement YoY
- Gross margin expanded 120 basis points
- First half of FY25 created a foundation for long-term transformation
Challenges Ahead
- Net sales projected to decline low single digits YoY
- Comparable sales still down YoY
- Inventory remains elevated at over $600M
- Operating lease liabilities remain high
- No non-GAAP EPS guidance provided
Revenue & Expenses
Visualization of income flow from segment revenue to net income