Petco Health and Wellness Company, Inc. (WOOF) announced a $1.5 billion refinancing of its outstanding term loan, following a $50 million voluntary prepayment made in December 2025. The new financing is intended to extend the maturities of the current debt, improve liquidity, and support the company’s capital‑structure strategy as it navigates a high‑leverage balance sheet.
The refinancing comes as Petco’s total debt stands at roughly $2.97 billion, with a debt‑to‑equity ratio of 2.57 and an Altman Z‑Score of 1.02, indicating a distressed financial position. By extending maturities, the company aims to reduce near‑term repayment pressure and create a more favorable debt profile, while the prepayment demonstrates a commitment to deleveraging. The terms of the new loan are not disclosed, but the move signals management’s focus on long‑term financial stability.
Petco reaffirmed its guidance for the fourth quarter and full fiscal year 2025. Management expects net sales to decline 2.5% to 2.8% year‑over‑year, driven by softer demand in core retail segments and competitive pricing pressure. Adjusted EBITDA is projected at $395 million to $397 million for the year, with Q4 adjusted EBITDA of $93 million to $95 million. The guidance aligns with the company’s prior outlook, indicating confidence in cost control and margin maintenance despite the sales dip.
CEO Joel Anderson highlighted the company’s resilience in the pet‑care category, noting that “our focus on operational excellence and disciplined spending will keep us on track to meet profitability targets.” Petco operates over 1,500 stores and continues to close under‑performing locations to optimize its footprint. The company’s strategy emphasizes service‑based revenue growth, loyalty programs, and selective expansion in high‑margin segments.
Investors responded cautiously, with a modest positive reaction that reflected confidence in the refinancing and the reaffirmed guidance. The market’s tempered response underscores the importance of debt management and the company’s ability to sustain profitability amid a challenging sales environment.
The refinancing and guidance reaffirmation provide a clearer view of Petco’s financial trajectory. While the company faces a high debt load and a low Altman Z‑Score, the extended maturities and disciplined cost strategy position it to navigate short‑term headwinds and pursue long‑term growth opportunities in the pet‑care market.
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