WOOF Stock Forecast & Price Target

Petco Health and Wellness Co Inc demonstrated a significant improvement in its gross margin, which expanded approximately 120 basis points year-over-year, driven by enhancements in both product and service offerings. The company's operational momentum is further reflected in the successful closure of unprofitable stores and effective vendor negotiations, contributing to a raised full-year adjusted EBITDA guidance amidst external challenges. Additionally, the firm's tighter inventory management and strategic pricing optimization, alongside a favorable market trend towards pet care, support a positive outlook for its financial performance.

Petco Health and Wellness Co Inc. has experienced a decline in net sales of 2.3% year-over-year, alongside a 1.6% decrease in comparable sales, indicating ongoing challenges in maintaining market share. The company’s guidance for net sales suggests a continued downturn in the low-single digits for 3Q 2025, coupled with a modest raise in the full-year adjusted EBITDA forecast, which highlights persistent underlying revenue pressures. Furthermore, risks such as margin pressure from channel shifts and intensified competition from high-growth e-commerce players are contributing to a negative outlook, particularly as the company has seen a notable decrease in sales contribution from supplies and companion animals.