WOOF Stock Forecast & Price Target

Petco Health and Wellness Co Inc. has demonstrated significant operational efficiency, highlighted by a gross margin expansion of approximately 120 basis points year-over-year, surpassing forecasts, thanks to strong contributions from both products and services. The company is strategically closing unprofitable locations and enhancing vendor partnerships, which, alongside improved pricing strategies, have enabled an increase in full-year adjusted EBITDA guidance despite ongoing tariff challenges. Additionally, the growth trends in the pet care market, coupled with effective inventory management and the potential for accelerated rollout of veterinary services, suggest a robust outlook for both revenue and profitability.

Petco Health and Wellness has experienced a decline in net sales by 2.3% year-over-year, with comp sales down approximately 1.6%, indicating potential ongoing share loss to e-commerce competitors. The company's guidance for 3Q2025 suggests continued challenges, projecting low-single-digit declines in net sales and only a slight increase in full-year adjusted EBITDA to between $385-390 million. Additionally, downside risks include ongoing margin pressures, difficulties in expanding veterinary services, and vulnerabilities to competitors with stronger e-commerce capabilities, all contributing to a negative outlook for the company's stock.