Petco: Some Signs Of A Turnaround, But Far From Changing My Mind (Q2 Review)

Gytis Zizys 4.86K Followers Follow Summary Petco Health reported flat Q2 revenue at $1.49B, with operational improvements largely driven by one-off tariff refunds rather than core business gains. WOOF's balance sheet remains challenged, with $1.46B in long-term debt and an interest coverage ratio of just 1.5x, highlighting ongoing financial risk. Management reaffirmed FY26 guidance, incorporating tariff-refund benefits, and Q3 Adj. EBITDA guidance of $100–$103M fell below Q2, dampening investor sentiment. I maintain a neutral rating, awaiting sustained operational momentum and clearer evidence of a genuine turnaround before considering an upgrade. patty_c/iStock Unreleased via Getty Images Petco Health ( WOOF ) just reported its Q2 results, which did not make me think that the company is well on its way to a turnaround just yet; however, we can see some bright spots here and This article was written by Gytis Zizys 4.86K Followers Follow MSc in Finance. Long-term horizon investor mostly with 2-5 year horizon. I like to keep investing simple. I believe a portfolio should consist of a mix of growth, value, and dividend-paying stocks but usually end up looking for value more than anything. I also sell options from time to time. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.