Petco Q1 net loss deepens to $15.1M despite $1.5B sales and $97.3M EBITDA beat
WOOF•Petco reported Q1 net sales of $1.5 billion, up 0.2%, with comparable sales rising 0.7% and adjusted EBITDA climbing 8.8% to $97.3 million. The company swung to a $15.1 million loss versus a $3.6 million expected loss, posted a $69.1 million cash outflow, reaffirming full-year sales guidance up to 1.5%.
1. Q1 Financial Performance
Petco posted net sales of $1.5 billion in Q1, up 0.2% year-over-year, with comparable sales rising 0.7%, the first increase in five quarters. Adjusted EBITDA jumped 8.8% to $97.3 million, but the company swung to a $15.1 million net loss, deeper than the $3.6 million analysts had forecast.
2. Balance Sheet and Cash Flow
Free cash flow recorded an outflow of $69.1 million during the quarter while total debt stood at $1.48 billion against $166.8 million in cash, resulting in net debt of $1.32 billion. Operating income reached $24.6 million, reflecting ongoing cost actions and product mix improvements.
3. Guidance and Outlook
Management reaffirmed full-year 2026 guidance for flat to 1.5% net sales growth and adjusted EBITDA of $415 million to $430 million. For Q2, the company expects approximately 0.3% net sales growth and $110 million to $112 million in adjusted EBITDA, citing tariff refunds and fuel cost variables as key factors.
4. Analyst Perspective
Jefferies maintained a Buy rating, describing the quarter as a solid start and highlighting the positive shift in comparable sales driven by new product, store, and seasonal initiatives. The firm views Petco as undervalued relative to peers given its early-stage self-help story.
