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what it is
Petco sells pet food, supplies, and vet care in the U.S., Mexico, and Puerto Rico.
how it gets paid
Last year Petco Health made $6.0B in revenue. Pet consumables and supplies was the main engine at $3.0B, or 50% of sales.
why growth slowed
Revenue fell 2.5% last year. 38.8% gross margin mattered most because Petco made more on each sale before fixing the whole growth problem.
what just happened
Petco posted $4.4B in revenue and $0.04 EPS, while gross margin hit 38.8%.
At a glance
C+ balance sheet — struggling to keep the lights on
35.0x trailing p/e — you're paying up for this one
3.5% return on capital — nothing to write home about
-$0.37 fy2024 eps est
$2B fy2026 rev est
xvary composite: 29/100 — weak
What they do
Petco sells pet food, supplies, and vet care in the U.S., Mexico, and Puerto Rico.
You can buy the food, book the vet, and add grooming in one stop. That is 29,000 employees serving one pet wallet, not three separate stores. Petco Love helped place nearly 7 million animals, so the brand already sits inside your pet routine.
How they make money
$6.0B
annual revenue · their business grew -2.5% last year
Pet consumables and supplies
$3.0B
3.0%
Veterinary care
$1.2B
+6.0%
Grooming and training
$0.7B
+4.0%
Tele-health, insurance and Vital Care
$0.6B
+8.0%
Digital and other commerce
$0.5B
1.0%
The products that matter
food, consumables, and pet essentials
Products & Supplies
$4.8B · 80% of revenue
this is the core business at $4.8B, and it fell 3.5% last year. if this keeps slipping, services have to run uphill just to keep total sales flat.
core cash engine
grooming, training, and vet visits
Services & Vet Care
$1.2B · 20% of revenue
this $1.2B segment grew 2.0%. it matters because in-person care is harder to copy online than a bag of pet food. the catch: it is still too small to carry the whole company.
turnaround lever
physical footprint for services
1,500-store base
1,500 locations
the store base is the physical chassis for grooming and vet care. it also means fixed costs stay real when traffic softens. same asset. two very different outcomes.
double-edged asset
Key numbers
$6.0B
annual revenue
This is the whole top line. A 2.5% drop here is about $150M gone.
3.4%
operating margin
This is the share of sales left after running the stores. Thin margins mean one bad quarter hurts.
3.5%
return on capital
For every $100 invested, Petco earns about $3.50. That is low for a retailer.
$2.6B
long-term debt
This debt stack is 69% of capital. You feel that when rates stay high.
Financial health
C+
strength
- balance sheet grade C+ — weak — may struggle to fund operations
- risk rank 5 — safer than 5% of stocks
- price stability 5 / 100
- long-term debt $2.6B (69% of capital)
C+ — balance sheet grade and long-term debt are flagged. this stock carries more risk than average.
Total return vs. market
Return history isn't available for WOOF right now.
source: institutional data · return history unavailable
What just happened
beat estimates
Petco posted $4.4B in revenue and $0.04 EPS, while gross margin hit 38.8%.
EDGAR shows $4.4B in latest-quarter revenue and $0.04 EPS. Gross margin at 38.8% says the store got a little less ugly on price.
$4.4B
revenue
$0.04
eps
38.8%
gross margin
the number that mattered
38.8% gross margin mattered most because Petco made more on each sale before fixing the whole growth problem.
source: company earnings report, 2026
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What could go wrong
the core risk is simple: $2.6B of debt against a retail base that is still shrinking. petco can absorb a noisy quarter. it has far less room if sales stay soft and the service mix stays too small.
high
debt load and refinancing cost
petco carries $2.6B of long-term debt, equal to 69% of total capital. that is a lot of debt for a business with a C+ balance sheet and a 5 / 100 price stability score.
if refinancing stays expensive, more operating improvement goes to creditors instead of to you.
high
another year of shrinking sales
sales fell 2.5% in 2025, and Q4 sales still dropped 2.4% to $1.52B. management is guiding to just flat to 1.5% growth for 2026. that's stabilization talk, not a clean rebound.
if revenue does not flatten, the turnaround math starts depending on cost cuts alone. that is a bad place to be in retail.
med
services stay too small to change the mix
services and vet care grew 2.0%, but they are still only 20% of revenue versus 80% from products and supplies.
if the higher-margin piece grows slowly, the company stays trapped inside the larger low-growth retail model.
med
competition from both sides
chewy pressures online convenience. petsmart brings roughly $10B of brick-and-mortar scale. petco sits in the uncomfortable middle.
price pressure or share loss would hit the $4.8B product business that still funds everything else.
four risks stand out, but they point to one conclusion: this equity needs sales stabilization more than it needs a clever turnaround narrative.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
sales stabilization
Q4 sales still fell 2.4% to $1.52B. until that number flattens out, margin gains are doing defensive work, not growth work.
trend
services mix
services and vet care are 20% of revenue and grew 2.0%. if that growth rate does not speed up, the mix shift stays more promise than result.
risk
refinancing terms
the company launched a $1.5B refinancing effort in jan 2026. the final cost of that debt will shape how much of EBITDA actually reaches equity holders.
calendar
2026 adjusted EBITDA guide
management expects $415M–$430M of adjusted EBITDA in 2026. that's the easiest scoreboard for whether the repair story is holding or slipping.
Analyst rankings
risk profile
high risk
risk rank 5 — significant risk of large drawdowns.
chart momentum
average
momentum rank 3 — the stock is moving with the broader market, no unusual signal.
source: institutional data
Institutional activity
institutional ownership data for WOOF is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$3
current price
n/a
target midpoint · n/a from current
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