- Net sales were $1.49 billion, essentially flat from the prior-year quarter, while comparable sales increased 0.6%.
- Net income increased to $38.7 million from $14 million a year earlier.
- Adjusted EBITDA increased to $122.2 million from $113.9 million. The quarter included a $6.8 million net benefit from tariff refunds; excluding that benefit, normalized adjusted EBITDA was $115.4 million.
- Year-to-date free cash flow increased to $60.8 million from $9.9 million in the prior-year period.
- Total debt declined to $1.48 billion from $1.59 billion a year earlier. Petco subsequently prepaid another $75 million in debt.
- Petco reaffirmed its fiscal 2026 outlook for net sales ranging from flat to 1.5% growth and adjusted EBITDA of $415 million to $430 million. View Petco’s full earnings report and investor information.
Petco reported higher second-quarter profitability while sales remained essentially unchanged from the same period last year.
For the quarter ended Aug. 1, 2026, net sales were $1.49 billion, compared with $1.49 billion a year earlier. Comparable sales increased 0.6%, marking Petco’s second consecutive quarter of positive comparable sales growth.
Net income increased to $38.7 million from $14 million in the prior-year quarter. Operating income rose 11.1% to $47.8 million, while operating margin increased to 3.2% from 2.9%.
Adjusted EBITDA, a non-GAAP measure, was $122.2 million compared with $113.9 million a year earlier.
The quarter included a $6.8 million net benefit associated with refunds of tariffs paid under the International Emergency Economic Powers Act in 2025 and 2026. Excluding that benefit, Petco reported normalized adjusted EBITDA of $115.4 million and said normalized gross margin was approximately flat year over year.
Cash flow and debt
Petco reported $293.5 million in cash at the end of the quarter, compared with $188.7 million a year earlier.
Year-to-date cash provided by operating activities increased to $130.6 million from $70.4 million. Free cash flow, a non-GAAP measure, increased to $60.8 million from $9.9 million.
Total debt was $1.48 billion, down from $1.59 billion a year earlier. After the quarter ended, Petco made an additional $75 million voluntary debt prepayment. The company said it has prepaid $170 million in debt over the past nine months as it works toward a leverage ratio of 2x.
Petco maintains full-year outlook
Petco reaffirmed its fiscal 2026 outlook, calling for net sales ranging from flat to 1.5% growth compared with the prior year.
The company continues to expect adjusted EBITDA of $415 million to $430 million for the year. Petco also expects approximately 15 to 20 net store closures during fiscal 2026.
For the third quarter, Petco expects net sales growth of 0.4% to 1% and adjusted EBITDA of $100 million to $103 million.
Information sourced from the company’s earnings release.
