Petco Bets on Highly Engaged Pet Parents to Ignite Growth

The company completed the first two phases of its operational plan in 2025 by strengthening its economic model and improving its retail fundamentals. Now, with greater financial flexibility, it plans to focus on sustainable top-line growth, Anderson said.

During research conducted last year, Petco identified as its most engaged customers a segment it calls “Passionate Explorers,” Anderson said.

“These are pet parents who are highly invested in their pets and seek innovation, expert support and a welcoming shopping experience across the full pet journey,” Anderson said, adding that “2026 will be informed by this strategy work.”

To support its next phase of growth, Petco will focus on “compelling product, trusted store experience, services at scale and an integrated omnichannel platform,” according to an earnings presentation released Wednesday.

In the consumables segment of products, Petco plans to expand its range of fresh food and install an additional 1,000 freezers in its stores; add new brands and flavors more often; and ramp up its owned brands business, Anderson said during the call.

“Of note, those that buy fresh food from us make over four more trips per year and spend over 50% more annually than dry-food-only customers,” Anderson said.

Similarly, in supplies, the company will target newness and innovation. This category includes beds, bowls, collars, leads and toys. The latest additions to Petco stores include tarantulas as companion animals as well as gardening products and plants that are pet-friendly.

In services, Petco plans to continue growing its wholly owned services businesses. These include vet hospitals, vaccination clinics, grooming and dog training.

“This business was a strong performer in 2025, and we are expecting continued growth in 2026,” Anderson said.

For its store experience, Petco aims to build community, excitement and customer loyalty through its product and service initiatives as well as fun events for families and pets.

Here, the company’s efforts are inspired by industry findings that Gen Z’s preference for in-store experiences is much higher than that of Gen X or millennials and similar to that of baby boomers.

“We see this as a huge long-term opportunity, with the Petco Health and Wellness Company, Inc., model well positioned to capture Gen Z’s desire for experiences and connections,” Anderson said.

For its omnichannel shopping initiative, Petco plans to dial up its digital marketing and relaunch its loyalty program in 2026 after improving its website performance and its eCommerce fill rates in 2025.

“Our goal is to offer a more personalized and relevant loyalty experience that is seamlessly integrated within our app,” Anderson said.

In the fourth quarter, Petco recorded year-over-year declines in sales, with net sales down 2.4% and comparable sales down 1.6%, according to a Wednesday earnings release.

During the earnings call, Petco Chief Financial Officer Sabrina Simmons attributed the declines to “our decision to move away from unprofitable sales, which was our strategy throughout 2025.”