Q2 2026 Petco Health and Wellness Company Inc Earnings Call Transcript
Key Points
- Petco Health and Wellness Co Inc (WOOF) delivered its second consecutive quarter of positive comparable sales, with a 0.6% comp increase, signaling that its strategic initiatives are gaining traction.
- The company reported strong profitability, with adjusted EBITDA of $122 million, which exceeded its outlook when excluding the one-time net tariff refund of $6.8 million.
- Petco Health and Wellness Co Inc (WOOF) is seeing robust growth in its veterinary services, highlighted by double-digit growth in total pet visits and expansion of doctor days to meet demand.
- The company's new store format test in seven locations is yielding highly encouraging results, including a sizable lift in new and reactivated customers, higher transaction counts, and larger basket sizes.
- Petco Health and Wellness Co Inc (WOOF) is proactively managing its balance sheet, voluntarily prepaying an additional $75 million in debt, bringing total debt reduction to $170 million over the last nine months.
- The relaunch of the Petco Perks membership program caused a significant negative impact on Q2 net sales, particularly in the services business, due to point redemption volumes far exceeding initial projections.
- Petco Health and Wellness Co Inc (WOOF) continues to face a soft dog business environment, with industry-wide adoptions down and no immediate rebound expected until 2027.
- The company is absorbing ongoing supply chain headwinds, including increased fuel costs and tariff-related pressures, which are expected to continue into the second half of the year.
- Gross margin, when excluding the one-time net tariff refund, was roughly flat year-over-year, indicating underlying margin pressure despite operational improvements.
- The company's sales growth outlook remains modest, with Q3 guidance of only 0.4% to 1% year-over-year growth, reflecting a measured and gradual recovery rather than a sharp inflection.
Thank you. Good day and welcome to Petco's Second Quarter 2026 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Roxanne Meyer, Vice President of Investor Relations and Treasury. Please go ahead.
Good afternoon and welcome to Petco's Second Quarter Fiscal 2026 Earnings Conference Call. Joining me on the call today are Joel Anderson, Petco's Chief Executive Officer, and Sabrina Simmons, Petco's Chief Financial Officer. In addition to the earnings release, we've posted a slide presentation on our website, ir.petco.com.
I'd like to remind everyone that on this call, we will make certain forward-looking statements which are subject to a number of risks and uncertainties that could cause actual results to differ materially from such statements. These risks and uncertainties include those set out in our earnings materials and SEC filings.
In addition, on today's call, we will refer to
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