Petco Health & Wellness Company, Inc.
For the period ended Nov 1, 2025. Filed Dec 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 1, 2025 · Filed Dec 5, 2025
WOOF$2.96-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-08-02; filed 2025-08-29.
0001826470-25-000015
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-11-01; filed 2025-12-05.
0001193125-25-309620
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 74 current paragraphs.
53 unchanged; 19 reworded; 2 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Other Non-Operating Income
Current report
Income Tax Benefit
Removed paragraphs (4)
Previous report
Other Non-Operating Loss
Previous report
Income Tax Expense (Benefit)
Previous report
In accordance with ASC 740, the Company has recognized the effects of the new tax law in the period of enactment. The impact of OBBBA for the quarter ended August 2, 2025 resulted in a reduction to current income tax expense, primarily due to the restoration of 100% bonus depreciation, immediate expensing of domestic research and experimental expenditures, and changes to the 163(j) interest limitation. This reduction was substantially offset by a corresponding increase in deferred income tax expense.
Previous report
The net effect of OBBBA did not have a material impact on the Company’s effective tax rate for the period. The Company continues to evaluate the impact of OBBBA on its consolidated financial statements and will update its estimates as additional guidance becomes available.
Reworded paragraphs (19)
Previous wording
Petco Health and Wellness Company, Inc. (“Petco”, the “Company”, “we”, “our” and “us”) is a pet specialty retailer focused on improving the lives of pets, pet parents, and our own partners. Through our omnichannel ecosystem, we provide our customers with a comprehensive offering of products and services to fulfill all of their pets’ needs through our more than 1,500 pet care centers in the U.S., Mexico, and Puerto Rico, our digital channel, and our flexible fulfillment options.
Current wording
Petco Health and Wellness Company, Inc. (“Petco”, the “Company”, “we”, “our” and “us”) is a pet specialty retailer focused on improving the lives of pets, pet parents, and our own partners. Through our omnichannel ecosystem, we provide our customers with a comprehensive offering of products and services to fulfill all of their pets’ needs through our more than 1,500 pet care centers across the U.S., Mexico, and Puerto Rico, our digital channel, and our flexible fulfillment options.
Previous wording
We strive to be a company that is improving millions of pet lives as well as the lives of pet parents and the partners who work for us. In tandem with Petco Love, an independent 501(c)(3) nonprofit organization, we work with and support thousands of local animal welfare groups across the country and, through these partnerships and in-store adoption events, we have helped find homes for approximately 7 million animals.
Current wording
We strive to be a company that is improving millions of pet lives as well as the lives of pet parents and the partners who work for us. In tandem with Petco Love, an independent 501(c)(3) nonprofit organization, we work with and support thousands of local animal welfare groups nationwide and, through these partnerships and in-store adoption events, we have helped find homes for over 7 million animals.
Previous wording
a decrease in net sales from $1.52 billion to $1.49 billion, representing a period-over-period decrease of 2.3% and a comparable sales decrease of 1.4%;
Current wording
a decrease in net sales from $1.51 billion to $1.46 billion, representing a period-over-period decrease of 3.1% and a comparable sales decrease of 2.2%;
Previous wording
operating income of $43.0 million, compared to operating income of $2.5 million in the prior year period;
Current wording
operating income of $29.2 million, compared to operating income of $4.0 million in the prior year period;
Previous wording
net income attributable to Class A and B-1 common stockholders of $14.0 million, compared to net loss attributable to Class A and B-1 common stockholders of $24.8 million in the prior year period; and
Current wording
net income attributable to Class A and B-1 common stockholders of $9.3 million, compared to net loss attributable to Class A and B-1 common stockholders of $16.7 million in the prior year period; and
Previous wording
an increase in Adjusted EBITDA from $83.5 million to $113.9 million.
Current wording
an increase in Adjusted EBITDA from $81.2 million to $98.6 million.
Previous wording
Thirteen and Twenty-six Weeks Ended August 2, 2025 Compared with Thirteen and Twenty-six Weeks Ended August 3, 2024
Current wording
Thirteen and Thirty-nine Weeks Ended November 1, 2025 Compared with Thirteen and Thirty-nine Weeks Ended November 2, 2024
Previous wording
Net sales decreased $35.2 million, or 2.3%, to $1.49 billion in the thirteen weeks ended August 2, 2025 compared to net sales of $1.52 billion in the thirteen weeks ended August 3, 2024. Net sales decreased $71.0 million, or 2.3%, to $2.98 billion in the twenty-six weeks ended August 2, 2025 compared to net sales of $3.05 billion in the twenty-six weeks ended August 3, 2024. The sales decrease primarily reflects lower transaction volume and a lower pet care center count, as well as a greater focus on profitability and margin through a more disciplined approach to managing unit costs, pricing, and promotional strategies. We continue to experience momentum in services, driven in part by our strategic investments in customer acquisition and retention, as well as efforts to optimize our existing veterinary hospital footprint.
Current wording
Net sales decreased $47.0 million, or 3.1%, to $1.46 billion in the thirteen weeks ended November 1, 2025 compared to net sales of $1.51 billion in the thirteen weeks ended November 2, 2024. Net sales decreased $118.0 million, or 2.6%, to $4.45 billion in the thirty-nine weeks ended November 1, 2025 compared to net sales of $4.56 billion in the thirty-nine weeks ended November 2, 2024. The sales decrease primarily reflects lower transaction volume and a lower pet care center count, as well as a greater focus on profitability and margin through a more disciplined approach to managing unit costs, pricing, and promotional strategies. We continue to experience momentum in services, driven in part by our strategic investments in customer acquisition and retention, as well as efforts to optimize our existing veterinary hospital footprint.
Previous wording
As a percentage of net sales, our gross profit rate was 39.3% for the thirteen weeks ended August 2, 2025 compared with 38.1% for the thirteen weeks ended August 3, 2024. As a percentage of net sales, our gross profit rate was 38.7% for the twenty-six weeks ended August 2, 2025 compared with 38.0% for the twenty-six weeks ended August 3, 2024. The increase between the periods reflects improved utilization of our services footprint, as well as more effective management of our inventory, unit costs, pricing, and promotional strategies. We are unable to quantify the factors impacting gross profit rate described above due to the fact that such factors are based on input measures or qualitative information that do not lend themselves to quantification.
Current wording
As a percentage of net sales, our gross profit rate was 38.9% for the thirteen weeks ended November 1, 2025 compared with 38.1% for the thirteen weeks ended November 2, 2024. As a percentage of net sales, our gross profit rate was 38.8% for the thirty-nine weeks ended November 1, 2025 compared with 38.0% for the thirty-nine weeks ended November 2, 2024. The increase between the periods reflects improved utilization of our services footprint, as well as more effective management of our inventory, unit costs, pricing, and promotional strategies. We are unable to quantify the factors impacting gross profit rate described above due to the fact that such factors are based on input measures or qualitative information that do not lend themselves to quantification.
Previous wording
As a percentage of net sales, SG&A expenses were 36.4% for the thirteen weeks ended August 2, 2025 compared with 37.9% for the thirteen weeks ended August 3, 2024. As a percentage of net sales, SG&A expenses were 36.8% for the twenty-six weeks ended August 2, 2025 compared with 38.4% for the twenty-six weeks ended August 3, 2024. The decrease in SG&A expenses between the periods was primarily due to lower payroll and other compensation costs, which included improved actuarial results from employee benefits optimization initiatives, as well as lower consulting costs. In addition, the Company incurred disposition costs relating to its Pupbox business during the twenty-six weeks ended August 3, 2024.
Current wording
As a percentage of net sales, SG&A expenses were 36.9% for the thirteen weeks ended November 1, 2025 compared with 37.8% for the thirteen weeks ended November 2, 2024. As a percentage of net sales, SG&A expenses were 36.8% for the thirty-nine weeks ended November 1, 2025 compared with 38.2% for the thirty-nine weeks ended November 2, 2024. The decrease in SG&A expenses between the periods was primarily due to lower payroll and other compensation costs, which included improved actuarial results from employee benefits optimization initiatives, as well as lower consulting costs. In addition, the Company incurred disposition costs relating to its Pupbox business during the thirty-nine weeks ended November 2, 2024.
Previous wording
Interest expense decreased $3.5 million, or 9.5%, to $33.3 million in the thirteen weeks ended August 2, 2025 compared with $36.8 million in the thirteen weeks ended August 3, 2024. Interest expense decreased $6.8 million, or 9.3%, to $66.8 million in the twenty-six weeks ended August 2, 2025 compared with $73.6 million in the twenty-six weeks ended August 3, 2024. The decrease was primarily driven by lower interest rates on the First Lien Term Loan during the thirteen and twenty-six week periods ended August 2, 2025. For more information, refer to Note 4, “Senior Secured Credit Facilities,” to the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.
Current wording
Interest expense decreased $3.0 million, or 8.3%, to $32.8 million in the thirteen weeks ended November 1, 2025 compared with $35.8 million in the thirteen weeks ended November 2, 2024. Interest expense decreased $9.8 million, or 9.0%, to $99.6 million in the thirty-nine weeks ended November 1, 2025 compared with $109.4 million in the thirty-nine weeks ended November 2, 2024. The decrease was primarily driven by lower interest rates on the First Lien Term Loan during the thirteen and thirty-nine week periods ended November 1, 2025. For more information, refer to Note 4, “Senior Secured Credit Facilities,” to the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.
Previous wording
There was no other non-operating income or loss recognized during the thirteen and twenty-six week periods ended August 2, 2025. There was no other non-operating income or loss recognized during the thirteen weeks ended August 3, 2024. Other non-operating loss was $2.7 million for the twenty-six weeks ended August 3, 2024. For more information, refer to Note 6, “Fair Value Measurements,” to the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.
Current wording
There was no other non-operating income or loss recognized during the thirteen and thirty-nine week periods ended November 1, 2025. Other non-operating income was $8.5 million and $5.8 million for the thirteen and thirty-nine weeks ended November 2, 2024, respectively. For more information, refer to Note 6, “Fair Value Measurements,” to the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.
Previous wording
Our effective tax rates were 5.1% and 34.9%, resulting in income tax expense of $0.7 million and $1.2 million for the thirteen and twenty-six weeks ended August 2, 2025, respectively, compared to effective tax rates of 14.7% and 11.3%, resulting in income tax benefit of $4.7 million and $9.1 million for the thirteen and twenty-six weeks ended August 3, 2024, respectively. The change in effective tax rates for the thirteen and twenty-six weeks ended August 2, 2025 was primarily driven by a change in earnings and a decrease in the amount of compensation associated expenses not expected to be deductible for corporate income tax purposes.
Current wording
Our effective tax rates were (205.4)% and (76.2)%, resulting in income tax benefit of $6.3 million and $5.0 million for the thirteen and thirty-nine weeks ended November 1, 2025, respectively, compared to effective tax rates of 4.9% and 10.2%, resulting in income tax benefit of $0.9 million and $10.0 million for the thirteen and thirty-nine weeks ended November 2, 2024, respectively. The change in effective tax rates for the thirteen and thirty-nine weeks ended November 1, 2025 was primarily driven by a change in earnings and a decrease in the amount of compensation associated expenses not expected to be deductible for corporate income tax purposes.
Previous wording
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. OBBBA introduces significant changes to U.S. income-tax legislation. Key provisions affecting the Company include (i) 100 percent bonus depreciation for qualified property placed in service after January 19, 2025, (ii) immediate expensing of domestic research and experimental expenditures starting January 1, 2025, and (iii) an increase to the cap on the deductibility of business interest expense for taxable years starting after December 31, 2024.
Current wording
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. OBBBA introduces significant changes to U.S. income-tax legislation. Key provisions affecting the Company include (i) 100 percent bonus depreciation for qualified property placed in service after January 19, 2025, (ii) immediate expensing of domestic research and experimental expenditures starting January 1, 2025, and (iii) an increase to the cap on the deductibility of business interest expense for taxable years starting after December 31, 2024. We have considered the impact of the OBBBA on our annual effective tax rate. These provisions did not have a material impact to income taxes in our financial statements for the third quarter 2025.
Previous wording
Our primary sources of liquidity are funds generated by operating activities and available capacity for borrowings on our $581.0 million ABL Revolving Credit Facility. Our ability to fund our operations, to make planned capital investments, to make scheduled debt payments and to repay or refinance indebtedness depends on our future operating performance and cash flows, which are subject to prevailing economic conditions and financial, business, and other factors, some of which are beyond our control. Our liquidity as of August 2, 2025 was $683.9 million, inclusive of cash and cash equivalents of $188.7 million and $495.2 million of availability on the ABL Revolving Credit Facility.
Current wording
Our primary sources of liquidity are funds generated by operating activities and available capacity for borrowings on our $581.0 million ABL Revolving Credit Facility. Our ability to fund our operations, to make planned capital investments, to make scheduled debt payments and to repay or refinance indebtedness depends on our future operating performance and cash flows, which are subject to prevailing economic conditions and financial, business, and other factors, some of which are beyond our control. Our liquidity as of November 1, 2025 was $732.9 million, inclusive of cash and cash equivalents of $237.4 million and $495.5 million of availability on the ABL Revolving Credit Facility.
Previous wording
Our primary source of operating cash is sales of products and services to customers, which are substantially all on a cash basis, and therefore provide us with a significant source of liquidity. Our primary uses of cash in operating activities include: purchases of inventory; freight and warehousing costs; employee-related expenditures; occupancy-related costs for our pet care centers, distribution centers and corporate support centers; credit card fees; interest under our debt agreements; and marketing expenses. Net cash provided by operating activities is impacted by our net income (loss) adjusted for certain non-cash items, including: depreciation, amortization, impairments and write-offs; amortization of debt discounts and issuance costs; deferred income taxes; equity-based compensation; impairments of goodwill and intangible assets; other non-operating loss; and the effect of changes in operating assets and liabilities.
Current wording
Our primary source of operating cash is sales of products and services to customers, which are substantially all on a cash basis, and therefore provide us with a significant source of liquidity. Our primary uses of cash in operating activities include: purchases of inventory; freight and warehousing costs; employee-related expenditures; occupancy-related costs for our pet care centers, distribution centers and corporate support centers; credit card fees; interest under our debt agreements; and marketing expenses. Net cash provided by operating activities is impacted by our net income (loss) adjusted for certain non-cash items, including: depreciation, amortization, impairments and write-offs; amortization of debt discounts and issuance costs; deferred income taxes; equity-based compensation; impairments of goodwill and intangible assets; other non-operating income; and the effect of changes in operating assets and liabilities.
Previous wording
Net cash provided by operating activities was $70.4 million in the twenty-six weeks ended August 2, 2025 compared with net cash provided by operating activities of $61.0 million in the twenty-six weeks ended August 3, 2024. The increase in operating cash flows were primarily driven by a decrease in inventory purchases, lower payroll and fringe benefits as well as lower operational costs, such as consulting fees. This was partially offset by lower sales and higher payouts of prior year accrued incentive bonuses.
Current wording
Net cash provided by operating activities was $160.5 million in the thirty-nine weeks ended November 1, 2025 compared with net cash provided by operating activities of $81.7 million in the thirty-nine weeks ended November 2, 2024. The increase in operating cash flows were primarily driven by a decrease in inventory purchases, lower payroll and fringe benefits, lower cash paid for income taxes, and lower operational costs, such as consulting fees. This was partially offset by lower sales and higher payouts of prior year accrued incentive bonuses.
Previous wording
Net cash used in investing activities was $58.1 million for each of the twenty-six weeks ended August 2, 2025 and August 3, 2024, and consisted primarily of capital expenditures to support our business.
Current wording
Net cash used in investing activities was $87.4 million and $89.5 million for the thirty-nine weeks ended November 1, 2025 and November 2, 2024, respectively, and consisted primarily of capital expenditures to support our business.
Previous wording
Net cash used in financing activities was $4.3 million for the twenty-six weeks ended August 2, 2025, compared with $5.9 million used in financing activities for the twenty-six weeks ended August 3, 2024. Financing cash flows in the twenty-six weeks ended August 2, 2025 were not material. Financing cash flows in the twenty-six weeks ended August 3, 2024 consisted primarily of borrowings and repayments on the ABL Revolving Credit Facility.
Current wording
Net cash used in financing activities was $5.4 million for the thirty-nine weeks ended November 1, 2025, compared with $7.8 million used in financing activities for the thirty-nine weeks ended November 2, 2024. Financing cash flows in the thirty-nine weeks ended November 1, 2025 were not material. Financing cash flows in the thirty-nine weeks ended November 2, 2024 consisted primarily of borrowings and repayments on the ABL Revolving Credit Facility.