Petco is set to close 25 stores this year, on top of the 25 it shuttered last year, as it becomes the latest retailer to trim its store fleet.
The San Diego-based company disclosed it was doing roughly two dozen closings when it reported second-quarter earnings recently. Petco's net sales of $1.5 billion decreased 2.3% compared with the prior-year period, and comparable sales dipped 1.4% year over year.
Facing financial pressure, Petco, like other chains, is seeking to weed out underperforming stores from its physical footprint. It's a process that retailers such as Macy's are undertaking this year. Tariffs and consumers being more cautious about spending are also taking a toll on companies.
And in Petco's case, it is also facing a more competitive landscape, with strong rivals such as PetSmart and online companies like e-commerce juggernaut Amazon and Chewy.
Petco has already begun shuttering stores this year, according to Chief Financial Officer Sabrina Simmons.
"As a reminder, the difference between comp sales and net sales is driven by the 25 net store closures in 2024 and the additional 10 net closures year to date, bringing our U.S. store count at the end of the second quarter to 1,388," she said on the second-quarter earnings call.
But Simmons noted that on a two-year basis, comparable sales have seen gains, driven by improvements in its remaining stores.
"Our top-line results primarily reflect the decisions we are making to move away from unprofitable sales, shifting instead to a promotional strategy, better retail execution and enhanced customer experience," Simmons told Wall Street analysts.
Petco hasn't released a list of the stores it's closing in 2025. But locations in Arizona, California, Illinois, Massachusetts, Michigan, New Jersey, Oklahoma, Oregon, Pennsylvania and Washington, D.C., are among those that have already gone dark, according to Fast Company.
"In line with Petco’s full-year outlook and broader transformation to drive sustainable, profitable growth over the long term, we have been accelerating initiatives to strengthen our operating model, including optimizing our fleet of more than 1,500 stores across the U.S., Mexico, and Puerto Rico," Petco said in an email to CoStar News on Wednesday. "We are proud of the progress we have made, which includes delivering on our second quarter 2025 commitments and raising our earnings outlook for the full year."