Petco’s first quarter results for 2026 were met with a significant negative market reaction, reflecting investor concerns over flat sales and a larger-than-expected GAAP loss. Management attributed the quarter’s performance to early progress in its “Phase III Reach for the Sky” strategy, highlighting improvements in consumables, particularly in the cat category, and continued strength in its services business. CEO Joel D. Anderson emphasized the return to positive comparable sales and noted that recent moves to expand product newness and invest in fresh and frozen food options contributed to sequential improvements. Anderson described the quarter as “an initial proof point of our inflection to growth,” but acknowledged that broader macroeconomic conditions remain dynamic.
Is now the time to buy WOOF? Find out in our full research report (it’s free for active Edge members).
Petco (WOOF) Q1 CY2026 Highlights:
- Revenue: $1.50 billion vs analyst estimates of $1.49 billion (flat year on year, 0.7% beat)
- Adjusted EPS: $0.03 vs analyst estimates of $0.03 (in line)
- Adjusted EBITDA: $97.33 million vs analyst estimates of $92.11 million (6.5% margin, 5.7% beat)
- Revenue Guidance for Q2 CY2026 is $1.49 billion at the midpoint, roughly in line with what analysts were expecting
- EBITDA guidance for the full year is $422.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 1.6%, in line with the same quarter last year
- Locations: 1,378 at quarter end, down from 1,393 in the same quarter last year
- Same-Store Sales were flat year on year (-1.3% in the same quarter last year)
- Market Capitalization: $776.7 million
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Petco’s Q1 Earnings Call
-
Michael Lasser (UBS): Asked about market share inflection across categories, CEO Joel D. Anderson said that while Petco has not yet regained share, sequential improvements in consumables, supplies, and services signal the strategy is taking hold.
-
Katharine McShane (Goldman Sachs): Inquired about consumer behavior by income cohort and competitive pricing. Anderson responded that purchasing trends were consistent across demographics, while CFO Sabrina Louise Simmons noted no plans for reactive pricing moves and limited impact from tariff refunds in guidance.
-
Kaumil Gajrawala (Jefferies): Queried the comp level needed for expense leverage, to which Simmons replied that low single-digit comparable sales are sufficient for the economic model to drive margin expansion.
-
Oliver Wintermantel (Evercore ISI): Sought clarity on what drove positive comps and gross margin expansion. Anderson credited execution across all four strategic pillars, while Simmons pointed to strong units per transaction and improved basket size.
-
Steven Emanuel Zaccone (Citi): Asked about timing and impact of cross-selling initiatives. Anderson said these efforts are just beginning, with integration between services and retail teams offering considerable future opportunity.
Catalysts in Upcoming Quarters
In the coming quarters, we will be closely monitoring (1) the ramp-up and customer adoption of the new Petco Perks loyalty program, (2) continued productivity gains from the optimization of veterinary hospitals, and (3) the impact of new product introductions—especially in trending categories like cat and health supplements—on overall store traffic and basket size. Execution on expense control and omnichannel enhancements will also be important to watch.
Petco currently trades at $2.71, down from $3.05 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
Our Favorite Stocks Right Now
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
