Financial Analysis

8 . Commitments and Contingencies The Company is involved in legal proceedings and is subject to other claims and litigation arising in the ordinary course of its business. The Company has made accruals with respect to certain of these matters, where appropriate, which are reflected in the Companys consolidated financial statements but are not, individually or in the aggregate, considered material. For other matters, the Company has not made accruals because management has not yet determined that a loss is probable or because the amount of loss cannot be reasonably estimated. While the ultimate outcome of the matters cannot be determined, the Company currently does not expect that these matters will have a material adverse effect on its consolidated financial statements. The outcome of any litigation is inherently uncertain, however, and if decided adversely to the Company, or if the Company determines that settlement of particular litigation is appropriate, the Company may be subject to liability that could have a material adverse effect on its consolidated financial statements. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

3 . Senior Secured Credit Facilities The Company had a $ 1,700.0 million secured term loan facility originally maturing on March 4, 2028 (the First Lien Term Loan). As of January 31, 2026, the outstanding principal balance of the First Lien Term Loan was $ 1,500.0 million. On February 2, 2026, the Company entered into a refinancing amendment to the credit agreement governing the First Lien Term Loan and issued $ 600.0 million in aggregate principal amount of senior secured notes (the Senior Secured Notes). Among other changes, the amendment provided that certain lenders would provide new term loans to the Company in an aggregate principal amount of $ 900.0 million (the Amended First Lien Term Loan), the proceeds of which, together with cash on hand and the proceeds from the Company's issuance of the Senior Secured Notes, would be used to repay the then outstanding principal on the First Lien Term Loan. Interest under the Amended First Lien Term Loan is, at the Companys option, either a base rate plus 3.25 % or Term SOFR plus 4.25 %, payable quarterly in arrears. The base rate is the greater of the bank prime rate, federal funds effective rate plus 0.5 % or one month Term SOFR plus 1.0 %. The Amended First Lien Term Loan matures on February 2, 2031. The Company has a secured asset-based revolving credit facility (as amended from time to time, the ABL Revolving Credit Facility). The first tranche of the ABL Revolving Credit Facility, which had availability of up to $ 35.0 milli …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Net sales by product type and services were as follows (in thousands): Thirteen weeks ended Twenty-six weeks ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Consumables $ 731,279 $ 729,918 $ 1,478,106 $ 1,477,988 Supplies and companion animals 485,578 495,687 966,838 989,508 Services and other 272,363 262,924 541,008 514,432 Net sales $ 1,489,220 $ 1,488,529 $ 2,985,952 $ 2,981,928

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6 . Fair Value Measurements Assets and Liabilities Measured on a Recurring Basis The following table presents information about assets and liabilities that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): August 1, 2026 Level 1 Level 2 Level 3 Assets (liabilities): Money market mutual funds $ 243,004 $ $ Investments of officers' life insurance $ $ 16,755 $ Non-qualified deferred compensation plan $ $ ( 13,414 ) $ January 31, 2026 Level 1 Level 2 Level 3 Assets (liabilities): Money market mutual funds $ 216,676 $ $ Investments of officers' life insurance $ $ 16,109 $ Non-qualified deferred compensation plan $ $ ( 13,447 ) $ The fair value of money market mutual funds is based on quoted market prices, such as quoted net asset values published by the fund as supported in an active market. Money market mutual funds included in the Companys cash and cash equivalents were $ 242.0 million and $ 204.0 million as of August 1, 2026 and January 31, 2026, respectively. Also included in the Companys money market mutual funds balances were $ 1.0 million and $ 12.7 million as of August 1, 2026 and January 31, 2026, respectively, which relate to the Companys restricted cash, and are included in other current assets in the consolidated balance sheets. The Company maintains a deferred compensation plan for key executives and other members of management, which is funded by inve …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"4. Senior Secured Notes As part of the February 2, 2026 refinancing of the First Lien Term Loan described in Note 3 , ""Senior Secured Credit Facilities"", the Company issued $ 600.0 million in aggregate principal amount of senior secured notes. The Senior Secured Notes bear interest at 8.25 % per annum, payable semiannually in arrears, and mature on February 1, 2031 . Approximately $ 10.3 million of arranger fees and other third-party expenses relating to the Companys issuance of the Senior Secured Notes were capitalized as debt issuance costs. As of August 1, 2026 , the outstanding principal balance of the Senior Secured Notes was $ 600.0 million ($ 590.6 million, net of the unamortized debt issuance costs). As of August 1, 2026, the weighted average interest rate on the borrowings outstanding was 8.3 %. Debt issuance costs are being amortized over the contractual term to interest expense using the effective interest rate in effect at issuance. As of August 1, 2026, the estimated fair value of the Senior Secured Notes was approximately $ 601.5 million, based upon Level 2 fair value hierarchy inputs."

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2. Revenue Recognition Net sales by product type and services were as follows (in thousands): Thirteen weeks ended Twenty-six weeks ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Consumables $ 731,279 $ 729,918 $ 1,478,106 $ 1,477,988 Supplies and companion animals 485,578 495,687 966,838 989,508 Services and other 272,363 262,924 541,008 514,432 Net sales $ 1,489,220 $ 1,488,529 $ 2,985,952 $ 2,981,928

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9. Reportable Segment The Company has one reportable segment managed on a consolidated basis. The measure of segment profit or loss is consolidated net income (loss) that is reported on the consolidated statement of operations. The measure of segment assets is reported on the consolidated balance sheet as total assets. The following represents segment information for the Companys single operating segment, for the periods presented (in thousands): Thirteen weeks ended Twenty-six weeks ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Revenue $ 1,489,220 $ 1,488,529 $ 2,985,952 $ 2,981,928 Add (deduct): Cost of sales ( 898,073 ) ( 903,210 ) ( 1,820,380 ) ( 1,826,641 ) Advertising and marketing expenses ( 40,094 ) ( 37,921 ) ( 79,181 ) ( 73,367 ) Stock compensation - general and administrative ( 8,520 ) ( 8,656 ) ( 17,862 ) ( 17,979 ) Other general and administrative expenses (1) ( 494,721 ) ( 495,720 ) ( 996,091 ) ( 1,004,560 ) Interest income 2,493 909 3,989 2,268 Interest expense ( 32,556 ) ( 33,297 ) ( 65,340 ) ( 66,791 ) Loss on extinguishment and modification of debt ( 11,840 ) Income tax benefit (expense) 15,710 ( 746 ) 13,511 ( 1,241 ) Income from equity method investees 5,201 4,084 10,756 8,694 Consolidated net income $ 38,660 $ 13,972 $ 23,514 $ 2,311 (1) Other general & administrative expenses include pet care center expenses, support center labor and occupancy costs, legal, accounting, information technology, consulting costs, and depreciation and …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"1 . Summary of Significant Accounting Policies Basis of Presentation Petco Health and Wellness Company, Inc. (together with its consolidated subsidiaries, the Company) is a leading pet specialty retailer focused on improving the lives of pets, pet parents, and its own partners. The Company manages its business as one reportable operating segment. In the opinion of management, the accompanying consolidated financial statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the United States (GAAP). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Consolidated Financial Statements. There have been no significant changes from the significant accounting policies disclosed in Note 1 of the Notes to Consolidated Financial Statements included in the Companys Annual Report on Form 10-K for the fiscal year ended January 31, 2026. The accompanying consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Interim financial results are not necessarily indicative of results anticipated for the full year. The accompanying consolidated financial statements and these Notes to Consolidated Financial Statements should be read in conjun …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

7 . Stockholders Equity Equity-Based Compensation Equity-based compensation awards under the Companys current equity incentive plan (as amended, the 2021 Equity Incentive Plan) include restricted stock units (RSUs, which include performance-based stock units and market-based stock units), restricted stock awards (RSAs), non-qualified stock options, and other equity compensation awards. In addition, the Company has made equity-based compensation awards of RSUs and non-qualified stock options outside of the 2021 Equity Incentive Plan as employment inducement awards (collectively, the Inducement Awards). The Company also has an employee stock purchase plan (ESPP). The Companys controlling parent, Scooby LP, also maintains an incentive plan (the 2016 Incentive Plan) under which it has awarded partnership unit awards to certain current and former employees, consultants, and non-employee directors of the Company that are restricted profit interests in Scooby LP subject to a distribution threshold (Series C Units). No additional Series C Units have been or will be awarded following the Companys initial public offering. As of August 1, 2026, substantially all Series C Units are fully vested. The following table summarizes the Companys equity-based compensation expense by award type (in thousands): Thirteen weeks ended Twenty-six weeks ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 RSUs and RSAs $ 6,856 $ 6,908 $ 14,618 $ 14,643 Options 1,387 1,439 2,790 2,804 ESPP …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing