Petco Q1 2026 Earnings Mixed; Shares Fall
Petco Q1 2026 earnings showed positive comps but a wider GAAP loss and EPS miss that pressured pre-market trading; company reaffirmed FY guidance.
KEY TAKEAWAYS
- Net sales were $1.5 billion and comparable-store sales grew 0.7%.
- Gross margin rose 21 basis points to 38.4% and adjusted EBITDA rose to $97 million.
- GAAP diluted EPS was negative $0.05, missing consensus by $0.06; shares fell nearly 13% pre-market.
HIGH POTENTIAL TRADES SENT DIRECTLY TO YOUR INBOX
Add your email to receive our free daily newsletter. No spam, unsubscribe anytime.
Petco Health and Wellness Company, Inc. (Nasdaq: WOOF) reported Q1 2026 earnings on June 3, 2026, showing a return to positive comparable-store sales and improved margins under its Phase 3 "Reach for the Sky" strategy. However, a wider-than-expected GAAP loss and earnings-per-share (EPS) miss pressured shares in pre-market trading.
Q1 Results and Margins
Net sales reached $1.5 billion, up 0.2% year over year, while comparable-store sales rose 0.7%, marking a return to positive growth. Gross profit totaled $574.4 million, with gross margin expanding 21 basis points to 38.4%. GAAP operating income increased 50.5% to $24.6 million. Adjusted EBITDA, a proxy for operating profit, rose 8.8% to $97.3 million.
Reported GAAP diluted EPS was negative $0.05, missing the analyst consensus of negative $0.01 by $0.06. Management described the quarter as early validation of its plan: "Our strong first-quarter results, highlighted by positive comparable sales and profitability that exceeded our outlook, provide clear, early validation that our Phase 3 'Reach for the Sky' strategy is working." [source:5]
Guidance Reaffirmed and Strategy
Petco reaffirmed its fiscal-year 2026 outlook and provided a Q2 2026 outlook in its June 3 press release. Secondary summaries cite fiscal 2026 net-sales guidance between $5.96 billion and $6.05 billion and adjusted EBITDA guidance of $415 million to $430 million. Management noted a recent tariff refund supports the EBITDA outlook.
The company emphasized priorities including product improvements, services growth, store experience, and omnichannel execution as key to sustaining progress. Despite these positives, shares fell nearly 13% in pre-market trading on June 4, 2026.
The quarter highlighted the tradeoff facing Petco: early margin gains and an affirmed outlook suggest strategic progress, but the EPS shortfall focused investor attention on converting operating improvements into consistent GAAP profitability.
