Is Petco going out of business? This question has been circling among investors, pet owners, and the broader retail community amid headlines about Petco store closures.
According to MarketWatch, while Petco is closing some underperforming stores to improve profitability, it continues to strengthen its core services like grooming and veterinary care.
For customers asking, “Is Petco closing stores near me?”, the answer depends on location, but the brand’s core business and customer offerings remain very much alive.
Key Takeaways
- Petco is not going out of business but is selectively closing underperforming stores to boost profitability and efficiency.
- 20–30 net store closures are planned, with the focus on higher-margin services like grooming and veterinary care.
- Investor outlook is steady, with management targeting improved margins and EBITDA despite modest sales declines.
- Pet owners can expect continuity of core services, with online ordering and nearby locations filling any local gaps.
What Is Petco?
Petco Health and Wellness Company, Inc. is one of the most recognisable names in the pet health and wellness retail industry, blending traditional retail with a comprehensive suite of pet services.
Founded in 1965 in San Diego, California, the company has evolved from a mail-order veterinary supply business into a nationwide chain of full-service pet care centres.
Today, Petco operates on an omnichannel model that integrates brick-and-mortar stores, a robust e-commerce platform, mobile app shopping, and partnerships with delivery services.
Petco at a Glance
| Category | Details |
|---|---|
| Industry | Pet health, wellness, and retail |
| Founded | 1965, San Diego, California, USA |
| Headquarters | San Diego, California, USA |
| Ownership | Publicly traded on NASDAQ under ticker “WOOF” |
| Business Model | Omnichannel: physical stores, online platform, mobile app, third-party delivery |
| Core Services | Grooming, veterinary care, pet training, and adoption events |
| Product Range | Pet food, treats, supplies, accessories, medications, health products |
| Customer Base | Millions of pet owners across the United States |
| Brand Focus | Holistic pet care, health and wellness, premium services |
Current Petco Store Footprint
Petco’s store network reflects a strategic balance between broad accessibility and operational efficiency.
While the company continues to maintain a nationwide presence, it has been rationalising its physical footprint, closing underperforming stores while enhancing profitable locations with expanded service offerings.
| Metric | Details |
|---|---|
| Total Stores | Approximately 1,393 company-operated locations |
| Recent Store Changes | Select closures of underperforming stores in multiple states |
| Net Store Closures (Latest Cycle) | 20–30 planned net closures in the current financial period |
| Closure Rationale | Improve profitability, reduce overheads, focus on high-margin services, and adapt to evolving consumer behaviour |
| Geographic Reach | Presence in urban, suburban, and select rural markets nationwide |
| Growth Areas | Veterinary hospitals inside stores, grooming services, premium product lines, e-commerce, and last-mile delivery partnerships |
What is Driving Petco Store Closures? The Business Logic
While Petco store closures have sparked concern, the underlying reasons are rooted in strategic business moves, not collapse.
The company is pruning its footprint to improve efficiency, boost margins, and align with broader pet retail industry trends.
| Factor | Explanation | Impact on Petco |
|---|---|---|
| Profitability over presence | Focus on trimming underperforming locations with weak sales or poor lease economics. | Frees up capital to invest in high-performing stores and services. |
| Margin and product mix optimisation | Reducing reliance on deep discounts and shifting towards higher-margin categories like vet care and grooming. | Improves gross margin and EBITDA despite softer sales. |
| Cost and operational efficiency | Streamlining operations, lowering fixed costs, and cutting underutilised retail space. | Strengthens cash flow and operational discipline. |
| Debt and leverage management | Addressing analyst concerns over debt levels by prioritising free cash flow and careful capital expenditure. | Supports investor confidence and financial stability. |
| Adapting to industry trends | Responding to growing e-commerce, pet service demand, and last-mile delivery partnerships. | Positions Petco competitively against online and mass retail rivals. |
Petco by the Numbers: Latest Performance and Outlook
Petco’s latest earnings paint a picture of a retailer willing to sacrifice some sales growth to protect profitability and strengthen its balance sheet.
The data below summarises the company’s most recent quarter alongside its full-year guidance.
| Metric | Q1 Performance | Full-Year FY25 Outlook |
|---|---|---|
| Net Sales | US$1.5 billion down 2–3% YoY | Low single-digit decline expected |
| Comparable Store Sales (Comps) | Down 1–2% | Similar trend projected |
| Gross Margin | +30 basis points improvement | Continued focus on margin expansion |
| Adjusted EBITDA | Higher year-on-year | US $375 million – US $390 million |
| Net Loss and Operating Income | GAAP net loss narrowed as operating income improved | Operating leverage to increase |
| Net Store Closures | 5 closures in Q1 | 20–30 closures planned |
What does this mean?
The figures reflect Petco’s intentional shift toward margin protection and operational efficiency.
While sales are modestly down, profitability metrics such as gross margin and adjusted EBITDA are improving, supported by a leaner store base and tighter cost controls.
For investors, the guidance signals a measured approach to growth that prioritises long-term sustainability over short-term revenue spikes.
Is Petco Going Out of Business? Rumours vs Reality
The question “Is Petco going out of business?” has been amplified by headlines about Petco store closures and Petco shutdown rumours, but the facts tell a different story.
Petco is not exiting the market but strategically trimming its store network to sharpen profitability, align with evolving pet retail industry trends, and redirect resources into higher-margin services such as veterinary care, grooming, and training.
The table below breaks down the rumour versus reality for clarity.
| Rumour | Reality |
|---|---|
| Petco is closing all its stores nationwide. | Petco is closing only 20–30 underperforming stores this year, out of nearly 1,400 locations. |
| Store closures signal bankruptcy or collapse. | Closures are part of a strategic “store optimisation” plan to cut costs and boost profitability. |
| Petco is retreating from the pet retail industry. | Petco remains committed to brick-and-mortar retail while expanding online sales and same-day delivery partnerships. |
| Services like grooming and vet care will be discontinued. | These services remain core to Petco’s business model and are expanding in select markets. |
| Investors should prepare for major revenue collapse. | Revenue is forecast to dip slightly, but gross margin and adjusted EBITDA are improving. |
This makes it clear that Petco store closures are not a death knell for the brand. Instead, they reflect a controlled, strategic pivot aimed at long-term stability.
Both investors and pet owners can expect the company to remain a major player in the pet retail industry, albeit with a leaner footprint and sharper operational focus.
What Pet Owners Should Expect in Affected Areas
For customers wondering how Petco store closures might affect their shopping routines and pet care, the good news is that the impact is limited and manageable.
Petco is closing only select underperforming locations, and in most cases, nearby stores or online services will fill the gap. Here is what pet owners in affected areas can expect.
| Area of Impact | What Happens | What You Can Do |
|---|---|---|
| Grooming Appointments | Bookings at closing stores will be cancelled or transferred to nearby locations. | Reschedule early to secure your preferred time and groomer. |
| Veterinary Services | Medical records and prescriptions can be transferred to another Petco or independent vet. | Request copies of records in advance to avoid disruption. |
| Loyalty Rewards and Gift Cards | Still valid online or at other Petco locations. | Redeem before expiry and link rewards to your online account. |
| Product Availability | Stock may be reduced during closing sales. | Order essentials via Petco.com or same-day delivery partners. |
| Training Classes | Sessions may be moved or refunded. | Confirm new locations or opt for virtual classes if available. |
For pet owners, the most important step is preparation. By securing service records, managing appointments early, and exploring online ordering, you can make the transition smooth, even if your nearest Petco is among the few slated for closure.
What Investors Should Watch
For investors, the real story behind Petco store closures lies in the numbers and strategy, not the headlines. The company’s shift towards operational efficiency, margin improvement, and selective footprint reduction will determine its long-term market position.
The table below outlines the key areas to monitor.
| Focus Area | What to Monitor |
|---|---|
| Store Closure Cadence | Quarterly updates on net store changes and same-store sales impact. |
| Margin Performance | Track quarterly margin changes and cost-control initiatives. |
| Adjusted EBITDA Growth | Compare actuals with full-year guidance ($375–$390M). |
| Services Growth (Vet, Grooming, Training) | New service openings, utilisation rates, and revenue contribution. |
| Omnichannel Expansion | Online order growth, delivery performance, and customer retention. |
| Balance Sheet Health | Leverage ratio, free cash flow, and debt repayment progress. |
For investors, Petco’s success will hinge on disciplined execution, closing the right stores, growing services, and expanding omnichannel reach while safeguarding margins.
Consistent monitoring of these metrics will separate noise from meaningful progress.
Where Are Petco Store Closures Happening? Patterns to Note
Petco’s planned store closures are not random; they are targeted at underperforming locations, often in markets where multiple Petco stores compete for the same customer base.
Lease expirations, foot traffic trends, and local economic conditions also play a role. The table below highlights the main patterns.
| Pattern | Explanation |
|---|---|
| Market Overlap | Closing stores located too close to other Petco branches to reduce cannibalisation. |
| Underperforming Sales | Sites with consistent revenue decline or low transaction volume are prioritised for closure. |
| Lease Expirations | Stores with expiring leases in costly retail areas may not be renewed. |
| Shifting Demographics | Areas with declining pet-owning households or shifting population profiles. |
| Competitive Pressure | Locations losing share to rivals like PetSmart, Chewy, or mass retailers. |
The closure map reveals Petco’s strategy to retain profitable stores in strong markets and exit locations that drain resources.
This targeted approach allows the company to focus its investments where customer demand and service uptake are strongest.
Timeline: Petco’s Reset at a Glance
Petco’s store closures and operational changes are part of a deliberate, phased reset. The timeline below shows key milestones that illustrate how the company is reshaping its business for profitability and long-term competitiveness.
| Period | Key Actions | Impact |
|---|---|---|
| Early Reset Phase | Analysts flag debt, margin pressure, and slowing sales. Leadership signals the need for operational discipline. | Investor caution rises with groundwork laid for store rationalisation. |
| Leadership Transition | New CEO steps in with a “back-to-basics” strategy focusing on profitability over sheer expansion. | Strategic direction shifts towards services, cost control, and footprint optimisation. |
| Operational Streamlining | 25 net store closures completed, product assortment refined and promo activity tightened. | Cost savings realised with improved gross margin. |
| Q1 Performance Update | 5 additional store closures, store count at 1,393, EBITDA and margin improve despite lower sales. | Signals that closures and cost cuts are working. |
| Guidance Reaffirmation | Management reiterates the plan for 20–30 net closures for the year with a focus on EBITDA growth. | Investor confidence is bolstered, and the strategy is seen as sustainable. |
This reset has been gradual and calculated. Each phase from leadership change, store pruning, to operational tightening, has built toward a leaner, more profitable Petco that can adapt to evolving market demands without exiting the industry.
What Happens Next? The Future Of Petco Stores
Petco’s future will depend on how effectively it executes its store optimisation plan, grows services, and navigates broader pet retail industry trends.
Below, we outline three potential scenarios investors and pet owners should keep in mind.
| Scenario | Description | Key Drivers | Potential Outcome |
|---|---|---|---|
| Base Case | Petco meets current guidance, low single-digit sales decline, adjusted EBITDA growth, and 20–30 store closures. | Continued margin improvement, stable service revenue, and disciplined promotions. | Gradual improvement in profitability with stable investor sentiment. |
| Upside Case | Sales outperform expectations, and service demand grows faster than forecast. | Stronger traffic recovery, successful marketing, and increased app and delivery adoption. | Revenue stabilises or grows, accelerated debt reduction, and stock performance improves. |
| Downside Case | Sales fall faster than planned, and cost savings fail to offset losses. | Weak consumer spending, aggressive competitor pricing, and supply chain disruptions. | Lower earnings, possible guidance cuts, and renewed investor concerns. |
While the base case appears most likely given management’s current execution, both investors and customers should watch demand trends and competitive activity closely.
Petco’s ability to grow its services arm and strengthen its omnichannel offering will be the swing factors that determine whether it trends toward the upside or slips toward the downside.
Practical Guide for Pet Owners: If Your Store Is Closing
If your local Petco is among the few slated for closure, a little preparation can ensure your pet’s care and supplies aren’t disrupted. The table below outlines the key steps to take before and after the shutdown.
| When | Action | Why It Matters |
|---|---|---|
| Before Closure | Transfer prescriptions to another Petco or a local vet. | Avoid gaps in medication or treatment schedules. |
| Before Closure | Download grooming, training, and veterinary records. | Ensures continuity of care and proof of services. |
| Before Closure | Redeem loyalty rewards and use gift cards. | Prevents unused balances from being forgotten. |
| Before Closure | Restock essential products. | Closing sales may have limited inventory toward the end. |
| After Closure | Locate the nearest Petco or alternative retailer. | Maintains access to preferred products and services. |
| After Closure | Set up online orders or same-day delivery. | Keeps supplies coming without store visits. |
By taking these steps, pet owners can smoothly transition their shopping and care routines, even if their usual store is closing. The key is acting early, before closure day arrives.
Practical Guide for Investors: Due Diligence Checklist
For investors tracking Petco’s turnaround, disciplined monitoring is essential. The table below outlines the key actions and data points to follow to separate market noise from meaningful signals.
| Action | Why It Matters | What to Monitor |
|---|---|---|
| Read quarterly earnings reports | Provides official updates on sales, margins, and store closures. | Compare reported metrics to guidance. |
| Track gross margin and adjusted EBITDA | These indicate profitability trends regardless of sales fluctuations. | Quarterly basis-point changes and EBITDA dollar growth. |
| Monitor net store changes | Confirms execution of closure plan and footprint optimisation. | Store count at quarter-end and pace of closures. |
| Assess service revenue growth. | Higher-margin services can offset slower product sales. | Vet, grooming, and training revenue contribution. |
| Watch the leverage ratio and free cash flow | Critical for financial health and debt management. | Debt repayments, interest coverage, FCF trends. |
| Follow competitive and market updates. | Industry shifts can impact Petco’s share and pricing power. | Competitor earnings, pet spending data, and macro trends. |
By staying focused on these metrics, investors can gauge whether Petco’s strategic store closures and operational resets are delivering the promised profitability and long-term resilience.
Conclusion
Petco is not going out of business; it is refining its footprint, boosting margins, and investing in services to stay competitive in a changing pet retail industry.
For pet owners, the closures are targeted and manageable; for investors, the opportunity lies in tracking execution and profitability. The company’s future will hinge on how well it balances cost discipline with service growth.
We want to see you succeed, and that’s why we provide valuable business resources to help you every step of the way.
- Join over 23,000 entrepreneurs by signing up for our newsletter and receiving valuable business insights.
- Register your business today with Entrepreneurs.ng’s Business Registration Services.
- Tell Your Brand Story on Entrepreneurs.ng, let’s showcase your brand to our global audience.
- Need help with your marketing strategy? Get a Comprehensive Marketing and Sales Plan here.
- Sign up for our Entrepreneurs Success Blueprint Programme to learn how to start and scale your business in just 30 days.
- Book our one-on-one consulting and speak to an expert about structuring and growing your business.
- Visit our shop for business plan templates and other valuable resources to guide you.
- Get our Employee-Employer Super Bundle NDA templates to legally protect your business and workforce.
- Advertise your business to over a million entrepreneurs through our different advertising packages.
Frequently Asked Questions (FAQs)
Is Petco going out of business?
No. Petco is not shutting down nationwide; it is closing a small number of underperforming stores as part of a strategic optimisation plan to improve profitability and adapt to changing pet retail industry trends.
How many Petco store closures are planned?
Petco has announced plans for 20–30 net store closures this year, following similar targeted reductions in previous years.
Why is Petco closing stores?
The closures target locations with low sales, high operating costs, or market overlap. This allows the company to focus on stronger markets and invest in services like veterinary care, grooming, and training.
Will Petco’s services be affected by the closures?
No. Grooming, training, and veterinary services remain central to Petco’s strategy and will continue in most markets, often expanding in higher-performing locations.
What happens to my loyalty rewards if my store closes?
Rewards and gift cards remain valid online and at other store locations, so you can continue using them.
Does Petco plan to open new stores in the future?
Yes, but selectively, new locations will be in high-demand areas where growth potential and service uptake are strong.
How can I check if my local store is closing?
Visit Petco’s official store locator, watch for in-store notices, or call your local branch. Local news outlets also report confirmed closures.
