Petco Stock Climbs as Retailer Forecasts Rising Adjusted Profits

Petco (WOOF) shares jumped Thursday morning as the pet retailer outlined a better-than-expected adjusted earnings forecast for fiscal 2025.

For the full year, Petco expects sales to decline by low single digits, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to rise to a range of $375 million to $390 million, compared to $336.5 million in 2024. Analysts expected the metric to come in at $371.56 million, according to estimates compiled by Visible Alpha.

Petco’s Business ‘Needed Overhauling,’ CEO Says

The retailer is planning to boost profits by cutting costs and operating more efficiently. CEO Joel Anderson said in Wednesday’s earnings call that when he took over last summer, Petco’s “foundational practices were not those of a successful consumer business and needed overhauling,” according to a transcript from AlphaSense.

The average Petco customer “remains discerning,” Anderson said, noting that the chain is reviewing its product portfolio, and plans to dedicate more shelf space to faster-selling brands. The retailer is also looking to improve its margins by “executing more targeted promotions,” Anderson said.

The retailer reported $1.55 billion in sales for the fourth quarter that ended Feb. 1, narrowly below estimates, while comparable store sales grew by 0.5%, below the 0.83% analyst consensus. Petco recorded a net loss of $0.05 per share, 2 cents larger than what analysts had expected.

Petco’s results follow online pet retail rival Chewy (CHWY), which topped estimates in its own fourth-quarter results earlier Wednesday.

Petco shares were up around 5% Thursday morning. They entered the day down just over 35% since the start of 2025.