Petco Reports Adjusted EBITDA Growth with $6.8M Tariff Refund Impact
Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) reported second-quarter net sales of $1.49 billion in 2026, a slight increase of 0.05% year-over-year, with comparable store sales rising by 0.6%. Adjusted EBITDA reached $122.2 million compared to $113.9 million the previous year, aided by a $6.8 million net benefit from IEEPA tariff refunds. Excluding this refund, normalized adjusted EBITDA rose only marginally by about 1.3%. The company's gross margin improved slightly to 39.7%, but remained largely flat without considering the tariff benefits. Operating cash flow for year-to-date increased significantly to $130.6 million from $70.4 million, and free cash flow rose to $60.8 million compared to $9.9 million in the prior period. Petco ended the quarter with $293.5 million in cash, up from $188.7 million a year earlier. Despite these improvements, concerns remain about whether the turnaround is self-funded or reliant on one-time benefits like tariff refunds. The company reaffirmed its full-year guidance for net sales growth of flat to 1.5% and adjusted EBITDA between $415 million and $430 million.
Tickers: $WOOF
Topics: adjusted_ebitda cash_flow inventory_management tariff_refunds