Petco said Monday that it has entered Phase Three of its turnaround strategy, a stage management is calling Reach for the Sky, as the company shifts emphasis from cost reduction to top-line growth. The update came at the Goldman Sachs Global Consumer and Retail Conference on Sept. 14, 2026, with Chief Executive Officer Joel Anderson and Chief Financial Officer Sabrina Simmons outlining the company's financial and operational progress.
Management expects the consumer environment to remain under stress through the rest of 2026, but the company reported two consecutive quarters of positive comparable store sales. Trailing twelve-month EBITDA was $332 million, and the stock was trading at $2.46. Petco's debt-to-equity ratio stood at 2.34.
Debt reduction has been a central milestone. Petco cut total debt by $170 million over a nine-month period, including a voluntary $75 million payment in September 2025. Net debt to EBITDA fell from 4.2x at the start of 2025 to 2.8x. Management is targeting 2.0x, a level at which it said discussions about shareholder distributions could begin.
Operationally, Petco operates roughly 1,500 stores and plans to close 15 to 20 locations in 2026 as part of its optimization effort. About half of the store fleet is due for renewal over the next three years, and a seven-store prototype has shown stronger Net Promoter Scores, higher average order sizes, more transactions and better impulse purchases.
The company completed its Hill's fresh and frozen product rollout in the third quarter and plans to rationalize its owned brands to seven core brands over 12 to 18 months. Petco also operates about 300 veterinary hospitals, which the CEO described as the company's crown jewel, with veterinary visits growing at a double-digit rate.
Strategy is organized around four pillars: wholly owned services, omni-channel capabilities, differentiated products and a relaunched loyalty program. Petco Perks replaces Vital Care. Management said customers who use multiple channels—stores, services and online—generate five times higher net sales per active customer than single-channel shoppers.
Petco also noted that it is the only national retailer offering saltwater fish as a companion animal category and that kittens have surpassed puppies in new household adoptions, with dog adoption roughly flat to slightly lower and cat adoption growing.
