Sep 2, 2026 earnings call — Membership relaunch and growth strategy progress
Petco reported Q2 sales of $1.5 billion and adjusted EBITDA of $122 million while reaffirming full-year sales and adjusted EBITDA guidance.
Revenue $1.5B (est $1.5B) · EPS $0.08 (est $0.07)
Key quotes
"During the quarter, we hit a major milestone in our Phase 3 strategy by relaunching our customer membership program, Petco Perks."
"In the second quarter, we introduced new high-impact brands that resonate strongly with cat parents, generating nice gains across consumables, supplements, bedding and furniture."
"First, I'm pleased to share that we have officially rolled out our Autoship sign-up capabilities across our physical store locations."
Analyst Q&A 9
customer growth and membership impact
Q (Michael Lasser · UBS): Is customer count starting to grow and how dependent is the turnaround on that? Also, how big was the points/membership transition impact and how will it change loyal customer economics into 2027?
A: Management said total customer base grew slightly in Q2, which suggests the bottom has been reached and growth has begun. They also said even without customer growth they can grow spend per customer by migrating customers across digital, stores and services. Sabrina estimated the membership/points transition impact as roughly mid-single-digit millions and said prior to the membership launch they were tracking above their outlook (~0.3%).
"So what we've said is that we feel very confident that prior to the launch of the membership program, we were tracking to above our outlook, which was about 0.3%." — Sabrina Simmons (CFO)
pricing strategy and new store format
Q (Katharine McShane · Goldman Sachs): How will you compete on price and promotions versus peers reinvesting tariff refunds? And what's the strategy for the 7 stores — new-format openings or remodels?
A: They said price matters but is not the only lever; Petco must stay price-competitive while leaning on differentiated product, in-store events and services, and they watch price weekly. On stores, management said the new format is early but promising; they will fast-forward more remodel tests, open a couple new-format stores this year, and apply learnings that may include low- or no-capital changes across the fleet.
"While price is important, it's not the only lever for Petco." — Joel Anderson (CEO)
capex and vet hospital plans
Q (Kaumil Gajrawala · Jefferies): Are the remodels and openings expected to keep CapEx guidance unchanged, i.e., marginal impact? And what's the plan and profitability profile for opening vet hospitals now versus earlier vintages?
A: Sabrina said they are juggling projects with some fallout and some additions, so any CapEx revision would be marginal and there is no change for 2026. Joel said they remain on track to start opening new hospitals in 2027, see improved productivity in the existing fleet, and believe adding hospitals to stores creates a positive ecosystem; they are applying learnings to shorten maturity curves for newer hospitals.
"Yes, I mean, obviously, as I said in my prepared remarks, we're still on track to start to open new hospitals in '27." — Joel Anderson (CEO)
cat growth and dog trends
Q (Peter Benedict · Baird): How big is cat within consumables and how does that compare to history? And separately, is the dog business stabilizing or getting worse?
A: For competitive reasons they would not give a low-level share number. They said cat growth shows they are on trend, they are growing above the market, and they are pleased with progress. On dogs, management said the dog business is still soft with adoptions down slightly, they expect a rebound in 2027, and diversification (cat, services, companion animal) helps offset dog softness.
"Yes, I mean, for competitive reasons, I don't know that I want to go that low, Peter." — Joel Anderson (CEO)
consumables and margin outlook
Q (Steven Zaccone · Citi): How did consumables perform versus expectations and what's driving comps across consumables, supplies, and services? Also, what are the puts and takes for gross margin in H2?
A: Joel said consumables returned to a positive comp, is their largest business and is the traffic driver, and getting it positive is a sign the strategy is working and will help other parts of the business. Sabrina said they remain focused on delivering healthy full-year margins, noted owned-brand improvements (So Phresh relaunch) are gaining momentum and private label carries better margins, and they have multiple levers to manage pressures.
"the overarching goal is that for the full year, we deliver healthy margins." — Sabrina Simmons (CFO)
supply headwinds and tariff reinvestment
Q (Oliver Wintermantel · Evercore): Can you quantify the supply-chain headwinds (freight, tariffs, labor)? And when you said reinvesting tariff savings, did that mean lowering prices to clear older inventory?
A: Sabrina characterized the headwinds as normal and manageable, noting pressure from fuel after the Middle East conflict, and said they have delivered good profitability in H1 and can absorb or offset headwinds while still investing. On the tariff reinvestment she confirmed they expedited clearing legacy inventory via aggressive clearance or some write-offs to bring in fresh assortments aligned with their new strategy.
"I would put this in the category of kind of normal, manageable headwind." — Sabrina Simmons (CFO)
cross-selling and e-commerce progress
Q (Steven Forbes · Guggenheim): How are cross-selling strategies evolving (vet-led fresh food, percent of customers across segments) and how fast could penetration grow? Also, how did e-commerce perform this quarter and what are your digital goals?
A: Joel said the vet-led Hill's rollout is starting in the next couple weeks, vets are Petco-owned which helps cross-functional selling, fresh/frozen is key with freezers added and chillers coming, and the percent of shoppers across all three channels remains very small so the opportunity is huge. Sabrina said e-commerce is performing well after last year's cleanup of unprofitable sales, showing a healthy comeback with strong margins.
"And then, you know, our percent of shoppers that are across all 3 channels is still a very, very small number, Steve." — Joel Anderson (CEO)
what stabilized business and consumables drivers
Q (Simeon Gutman · Morgan Stanley): What has helped stabilize the business, and within consumables is the improvement coming from traffic or ticket? Also, if 2027 is an inflection year for sales, would that be H1 or H2?
A: Sabrina noted consumables comp is positive despite store closures and total sales are flattish. Joel said stabilization comes from being more agile than a year ago, bringing newness every month and optimizing resets to improve in-stock and the right brands by store. On timing he said it's too early to pick a quarter and they expect measured, continuous improvement rather than a sudden step-change.
"I think the key things that stabilize a lot of that is, you know, we're just a lot more agile than we were a year ago." — Joel Anderson (CEO)
SG&A and supplies trends
Q (David Lantz · Wells Fargo): Beyond the actuarial true-up, what were the other SG&A dynamics in the quarter and what should we watch in H2? Also, why have supplies and companion animal declines moderated and what to expect in H2?
A: Sabrina said they showed expense discipline: marketing was up $2 million, overall expenses were up $1 million, but excluding the $9 million benefit expenses were down about $8 million across multiple line items. Joel said supplies is a slower-turning category with a large part imported, the moderation in declines has been happening over several quarters, and they expect that moderation to continue.
"So if you exclude that, expenses were actually down about $8 million." — Sabrina Simmons (CFO)