Petco Health and Wellness pany(US:WOOF)2025-11-25 21:10Financial Performance - Petco reported Q3 2025 net sales of $1.5 billion, a decrease of 3.1% year over year[4] - Comparable sales declined by 2.2% year over year, indicating a continued challenge in sales performance[4] - Operating income increased by $25.2 million to $29.2 million, reflecting improved profitability[4] - GAAP net income rose by $26.0 million to $9.3 million, marking a significant turnaround[4] - Adjusted EBITDA for Q3 2025 was $98.6 million, an increase of $17.3 million year over year[4] - The company tightened its full year 2025 net sales outlook to a decrease of 2.5% - 2.8%[4] - Full year 2025 adjusted EBITDA guidance was revised upward by $6 million, now projected between $395 million and $397 million[4] - For Q4 2025, net sales are expected to decline in low single digits year over year, with adjusted EBITDA projected between $93 million and $95 million[5] Operational Adjustments - Petco plans to close approximately 20 stores as part of its operational adjustments[4] Year-to-Date Performance - Net income for the 39 weeks ended November 1, 2025, was $11,641, a significant improvement compared to a net loss of $87,979 for the same period in 2024[17] - Adjusted EBITDA for the 39 weeks ended November 1, 2025, was $301,873, representing an increase of 25.6% from $240,403 in the prior year[21] - Net sales for the 39 weeks ended November 1, 2025, were $4,446,339, down from $4,564,332, a decline of 2.6%[21] Asset and Liability Management - Total current assets increased to $1,007,400, up from $973,619, reflecting a growth of 3.9%[14] - Cash and cash equivalents at the end of the period rose to $249,423, compared to $121,021 at the end of the same period last year, marking a 106.2% increase[17] - Total liabilities decreased to $4,047,528 from $4,080,800, indicating a reduction of 0.8%[14] - Total assets increased slightly to $5,205,124 from $5,194,430, reflecting a growth of 0.2%[14] Cash Flow Analysis - Cash flows from operating activities provided $160,528, a substantial increase from $81,680 in the previous year[17] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $67,758, compared to a decrease of $15,628 in the same period last year[17] - For the 13 weeks ended November 1, 2025, net cash provided by operating activities was $90,090,000, compared to $20,724,000 for the same period in 2024, representing a significant increase[25] - Free Cash Flow for the 13 weeks ended November 1, 2025, was $60,646,000, a recovery from a negative Free Cash Flow of $(10,288,000) in the same period of 2024[25] - For the 39 weeks ended November 1, 2025, net cash provided by operating activities was $160,528,000, up from $81,680,000 in 2024, indicating strong operational performance[25] - Free Cash Flow for the 39 weeks ended November 1, 2025, was $70,568,000, compared to $(9,361,000) in the prior year, showing a positive trend[25] - Cash paid for fixed assets decreased slightly from $(31,012,000) in 2024 to $(29,444,000) in 2025 for the 13-week period[25] - Cash paid for fixed assets for the 39 weeks ended November 1, 2025, was $(89,960,000), a slight decrease from $(91,041,000) in 2024[25] Profitability Metrics - Gross profit margin improved by approximately 75 basis points to 38.9% as a percentage of net sales[4] - The Adjusted EBITDA margin improved to 6.8% for the 39 weeks ended November 1, 2025, compared to 5.3% in the prior year[21]