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San Diego, May 24, 2022 – Petco Health and Wellness Company, Inc. (Nasdaq: WOOF), a complete partner in pet health and wellness, today announced its first quarter 2022 financial results, which reflected increases in both comparable sales and profitability, on top of record comparable sales a year ago.

In the first quarter of 2022, Petco delivered net revenue of $1.48 billion, up 4.3 percent versus prior year. Net income improved by $17.1 million from prior year to $24.7 million or $0.09 per share. Adjusted Net Income¹ increased $1.7 million to $46.1 million or $0.17 per share, consistent with prior year.

“Petco’s strong Q1 results were driven by our incredible team’s ‘no excuses’ execution approach, a pet category that continues to surge, and the power of our one-of-a-kind end to end offering that now includes over 200 fully owned veterinary hospitals.” said Ron Coughlin, CEO of Petco. “This is our 14^th consecutive growth quarter and we are confident that continued category momentum—combined with our differentiated services, merchandise and advantaged Retail 3.0 omnichannel capabilities—positions us to continue delivering growth.”

Comparisons are first quarter of 2022 ended April 30, 2022 versus first quarter of 2021 ended May 1, 2021 unless otherwise noted

First quarter results demonstrated continued operational excellence, while simultaneously delivering on the promise of purpose driven performance.

Petco has maintained its full year 2022 financial guidance as previously stated, and as set out in the schedules below.

Management will host an earnings conference call on May 24, 2022 at 8:30 AM Eastern Time to discuss the company’s financial results. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast, earnings release, earnings presentation, and infographic via the company’s investor relations page at ir.petco.com. A replay of the webcast will be archived on the company’s investor relations page through June 7, 2022 at approximately 5:00 PM Eastern Time.

Founded in 1965, Petco is a category-defining health and wellness company focused on improving the lives of pets, pet parents and our own Petco partners. We’ve consistently set new standards in pet care while delivering comprehensive pet wellness products, services and solutions, and creating communities that deepen the pet-pet parent bond. We operate more than 1,500 pet care centers across the U.S., Mexico and Puerto Rico, which offer merchandise, companion animals, grooming, training and a growing network of on-site veterinary hospitals and mobile veterinary clinics. Our complete pet health and wellness ecosystem is accessible through our pet care centers and digitally at petco.com and on the Petco app. In tandem with Petco Love (formerly the Petco Foundation), an independent nonprofit organization, we work with and support thousands of local animal welfare groups across the country and, through in-store adoption events, we’ve helped find homes for more than 6.5 million animals.

This earnings release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, concerning expectations, beliefs plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not statements of historical fact, including statements regarding our fiscal year 2022 guidance, our growth plans, and execution on our transformation initiatives. Such forward-looking statements can generally be identified by the use of forward-looking terms such as “believes,” “expects,”

“may,” “intends,” “will,” “shall,” “should,” “anticipates,” “opportunity,” “illustrative”, or the negative thereof or other variations thereon or comparable terminology. Although Petco believes that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct or that any forward-looking results will occur or be realized. Nothing contained in this earnings release is, or should be relied upon as, a promise or representation or warranty as to any future matter, including any matter in respect of the operations or business or financial condition of Petco. All forward-looking statements are based on expectations and assumptions about future events that may or may not be correct or necessarily take place and that are by their nature subject to significant uncertainties and contingencies, many of which are outside the control of Petco. Forward-

looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results or events to differ materially from the potential results or events discussed in the forward-looking statements, including, without limitation, those identified in this earnings release as well as the following: (i) increased competition (including from multi-channel retailers and e-Commerce providers); (ii) reduced consumer demand for our products and/or services; (iii) our reliance on key vendors; (iv) our ability to attract and retain qualified employees; (v) risks arising from statutory, regulatory and/or legal developments; (vi) macroeconomic pressures in the markets in which we operate including inflation; (vii) failure to effectively manage our costs; (viii) our reliance on our information technology systems; (ix) our ability to prevent or effectively respond to a privacy or security breach; (x) our ability to effectively manage or integrate strategic ventures, alliances or acquisitions and realize the anticipated benefits of such transactions; (xi) economic or regulatory developments that might affect our ability to provide attractive promotional financing; (xii) business interruptions and other supply chain issues; (xiii) catastrophic events, political tensions, conflicts and wars (such as the ongoing conflict in Ukraine), health crises, and pandemics, including the potential effects that the ongoing COVID-19 pandemic and/or corresponding macroeconomic uncertainty could have on our financial position, results of operations and cash flows; (xiv) our ability to maintain positive brand perception and recognition; (xv) product safety and quality concerns; (xvi) changes to labor or employment laws or regulations; (xvii) our ability to effectively manage our real estate portfolio; (xviii) constraints in the capital markets or our vendor credit terms; (xix) changes in our credit ratings; and (xx) the other risks, uncertainties and other factors identified under “Risk Factors” and elsewhere in Petco’s Securities and Exchange Commission filings. The occurrence of any such factors could significantly alter the results set forth in these statements.

Petco cautions that the foregoing list of risks, uncertainties and other factors is not complete, and forward-looking statements speak only as of the date they are made. Petco undertakes no duty to update publicly any such forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.

	13 Weeks Ended
	April 30, 2022			May 1, 2021			Percent Change
Net sales	$	1,475,991		$	1,414,994			4	%
Cost of sales		868,317			818,009			6	%
Gross profit		607,674			596,985			2	%
Selling, general and administrative expenses		557,735			549,236			2	%
Operating income		49,939			47,749			5	%
Interest income		(20	)		(21	)		(5	%)
Interest expense		19,634			20,529			(4	%)
Loss on extinguishment and modification of debt		—			20,838			(100	%)
Other non-operating income		(314	)		—		N/M
Income before income taxes and income from equity method investees		30,639			6,403			379	%
Income tax expense		10,000			2,679			273	%
Income from equity method investees		(3,163	)		(2,425	)		30	%
Net income		23,802			6,149			287	%
Net loss attributable to noncontrolling interest		(891	)		(1,411	)		(37	%)
Net income attributable to Class A and B-1 common stockholders	$	24,693		$	7,560			227	%

Net income per Class A and B-1 common share:
Basic	$	0.09		$	0.03			226	%
Diluted	$	0.09		$	0.03			226	%

Weighted average shares used in computing net income per Class A and B-1 common share:
Basic		265,050			264,215			0	%
Diluted		265,701			265,028			0	%

	April 30, 2022			January 29, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	1,90,893		$	2,11,602
Receivables, less allowance for credit losses¹		42,221			55,618
Merchandise inventories, net		6,82,040			6,75,111
Prepaid expenses		52,129			42,355
Other current assets		81,602			86,091
Total current assets		10,48,885			10,70,777
Fixed assets		17,92,202			17,45,691
Less accumulated depreciation		(10,56,858	)		(10,18,769	)
Fixed assets, net		7,35,344			7,26,922
Operating lease right-of-use assets		13,56,879			13,38,465
Goodwill		21,83,991			21,83,991
Trade name		10,25,000			10,25,000
Other long-term assets		1,55,688			1,52,786
Total assets	$	65,05,787		$	64,97,941
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and book overdrafts	$	3,92,662		$	4,03,976
Accrued salaries and employee benefits		1,25,616			1,50,630
Accrued expenses and other liabilities		2,13,396			2,10,872
Current portion of operating lease liabilities		2,58,349			2,65,897
Current portion of long-term debt and other lease liabilities		21,789			21,764
Total current liabilities		10,11,812			10,53,139
Senior secured credit facilities, net, excluding current portion		16,37,365			16,40,390
Operating lease liabilities, excluding current portion		11,14,268			10,96,133
Deferred taxes, net		3,22,626			3,18,355
Other long-term liabilities		1,32,009			1,34,105
Total liabilities		42,18,080			42,42,122
Commitments and contingencies
Stockholders' equity:
Class A common stock²		227			227
Class B-1 common stock³		38			38
Class B-2 common stock⁴		—			—
Preferred stock⁵		—			—
Additional paid-in-capital		21,43,505			21,33,821
Retained earnings		1,66,859			1,42,166
Accumulated other comprehensive loss		(3,836	)		(2,238	)
Total stockholders’ equity		23,06,793			22,74,014
Noncontrolling interest		(19,086	)		(18,195	)
Total equity		22,87,707			22,55,819
Total liabilities and equity	$	65,05,787		$	64,97,941

	13 Weeks Ended
	April 30, 2022			May 1, 2021
Cash flows from operating activities:
Net income	$	23,802		$	6,149
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		46,967			41,607
Amortization of debt discounts and issuance costs		1,224			2,165
Provision for deferred taxes		4,832			1,708
Equity-based compensation		12,222			11,604
Impairments, write-offs and losses on sale of fixed and other assets		162			947
Loss on extinguishment and modification of debt		—			20,838
Income from equity method investees		(3,163	)		(2,425	)
Non-cash operating lease costs		105,249			105,188
Other non-operating income		(314	)		—
Changes in assets and liabilities:
Receivables		13,397			3,748
Merchandise inventories		(6,930	)		(36,008	)
Prepaid expenses and other assets		(9,896	)		(9,140	)
Accounts payable and book overdrafts		(11,314	)		20,119
Accrued salaries and employee benefits		(16,478	)		(2,483	)
Accrued expenses and other liabilities		11,290			66,120
Operating lease liabilities		(112,272	)		(116,994	)
Other long-term liabilities		(1,259	)		1,859
Net cash provided by operating activities		57,519			115,002
Cash flows from investing activities:
Cash paid for fixed assets		(65,910	)		(47,351	)
Net cash used in investing activities		(65,910	)		(47,351	)
Cash flows from financing activities:
Borrowings under long-term debt agreements		—			1,700,000
Repayments of long-term debt		(4,250	)		(1,678,111	)
Debt refinancing costs		—			(24,665	)
Payments for finance lease liabilities		(1,022	)		(593	)
Proceeds from employee stock purchase plan and stock option exercises		1,453			—
Tax withholdings on stock-based awards		(11,441	)		—
Payment of offering costs		—			(3,844	)
Net cash used in financing activities		(15,260	)		(7,213	)

Net (decrease) increase in cash, cash equivalents and restricted cash		(23,651	)		60,438
Cash, cash equivalents and restricted cash at beginning of period		221,890			119,540
Cash, cash equivalents and restricted cash at end of period	$	198,239		$	179,978

The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.

Adjusted EBITDA, including Trailing Twelve Month Adjusted EBITDA, is considered a non-GAAP financial measure under the Securities and Exchange Commission’s (SEC) rules because it excludes certain amounts included in net income calculated in accordance with GAAP. Management believes that Adjusted EBITDA is a meaningful measure to share with investors because it facilitates comparison of the current period performance with that of the comparable prior period. In addition, Adjusted EBITDA affords investors a view of what management considers to be Petco’s core operating performance as well as the ability to make a more informed assessment of such operating performance as compared with that of the prior period.

Please see the company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022 filed with the SEC on March 24, 2022 for additional information on Adjusted EBITDA. The tables below reflect the calculation of Adjusted EBITDA for the thirteen and trailing twelve months ended April 30, 2022 compared to the thirteen and trailing twelve months ended May 1, 2021, respectively, as well as the twelve-month period ended January 29, 2022.

(dollars in thousands)	13 Weeks Ended
Reconciliation of Net Income Attributable to Class A and B-1 Common Stockholders to Adjusted EBITDA	April 30, 2022			May 1, 2021
Net income attributable to Class A and B-1 common stockholders	$	24,693		$	7,560
Add (deduct):
Interest expense, net		19,614			20,508
Income tax expense		10,000			2,679
Depreciation and amortization		46,967			41,607
Income from equity method investees		(3,163	)		(2,425	)
Loss on debt extinguishment and modification		—			20,838
Asset impairments and write offs		162			947
Equity-based compensation		12,222			11,604
Other non-operating income		(314	)		—
Mexico joint venture EBITDA (1)		6,778			6,006
Store pre-opening expenses		3,359			4,029
Store closing expenses		1,860			1,103
Non-cash occupancy-related costs (2)		2,194			1,139
Acquisition-related integration costs (3)		2,236			—
Other costs (4)		5,943			10,151
Adjusted EBITDA	$	132,551		$	125,746
Net sales	$	1,475,991		$	1,414,994
Net margin (5)		1.7	%		0.5	%
Adjusted EBITDA Margin		9.0	%		8.9	%

(dollars in thousands)	Trailing Twelve Months
Reconciliation of Net Income Attributable to Class A and B-1 Common Stockholders to Adjusted EBITDA	April 30, 2022			January 29, 2022			May 1, 2021
Net income attributable to Class A and B-1 common stockholders	$	181,550		$	164,417		$	12,245
Add (deduct):
Interest expense, net		76,442			77,335			178,314
Income tax expense		60,795			53,473			9,897
Depreciation and amortization		177,791			172,431			172,876
Income from equity method investees		(11,622	)		(10,883	)		(8,575	)
Loss on debt extinguishment and modification		—			20,838			38,387
Asset impairments and write offs		10,133			10,918			13,144
Equity-based compensation		49,883			49,265			22,214
Other non-operating income		(34,812	)		(34,497	)		—
Mexico joint venture EBITDA (1)		27,609			26,837			21,061
Store pre-opening expenses		14,095			14,765			11,349
Store closing expenses		5,785			5,028			7,858
Non-cash occupancy-related costs (2)		9,169			8,114			13,179
Acquisition-related integration costs (3)		2,236			—			—
Other costs (4)		29,229			33,437			31,309
Adjusted EBITDA	$	598,283		$	591,478		$	523,258
Net sales	$	5,868,146		$	5,807,149		$	5,221,675
Net margin (5)		3.1	%		2.8	%		0.2	%
Adjusted EBITDA Margin		10.2	%		10.2	%		10.0	%

Adjusted Net Income and Adjusted diluted earnings per share attributable to Petco common stockholders (Adjusted EPS) are considered non-GAAP financial measures under the SEC’s rules because they exclude certain amounts included in the net income attributable to Petco common stockholders and diluted earnings per share attributable to Petco common stockholders calculated in accordance with GAAP. Management believes that Adjusted Net Income and Adjusted EPS are meaningful measures to share with investors because they facilitate comparison of the current period performance with that of the comparable prior period. In addition, Adjusted Net Income and Adjusted EPS afford investors a view of what management considers to be Petco’s core earnings performance as well as the ability to make a more informed assessment of such earnings performance with that of the prior period.

The tables below reflect the calculation of Adjusted Net Income and Adjusted EPS for the thirteen weeks ended April 30, 2022 compared to the thirteen weeks ended May 1, 2021.

(in thousands, except per share amounts)	13 Weeks Ended
Reconciliation of Diluted EPS to Adjusted EPS	April 30, 2022						May 1, 2021
	Amount			Per share			Amount		Per share
Net income attributable to common stockholders / diluted EPS	$	24,693		$	0.09		$	7,560	$	0.03
Add (deduct):
Income tax expense		10,000			0.04			2,679		0.01
Loss on debt extinguishment and modification		—			—			20,838		0.08
Asset impairments and write offs		162			0.00			947		0.00
Equity-based compensation		12,222			0.04			11,604		0.04
Other non-operating income		(314	)		(0.00	)		—		—
Store pre-opening expenses		3,359			0.01			4,029		0.02
Store closing expenses		1,860			0.01			1,103		0.00
Non-cash occupancy-related costs (2)		2,194			0.01			1,139		0.01
Acquisition-related integration costs (3)		2,236			0.01			—		—
Other costs (4)		5,943			0.02			10,151		0.04
Adjusted pre-tax income / diluted earnings per share	$	62,355		$	0.23		$	60,050	$	0.23
Income tax expense at 26% normalized tax rate		16,212			0.06			15,613		0.06
Adjusted Net Income / Adjusted EPS	$	46,143		$	0.17		$	44,437	$	0.17

Assumptions in the previously stated guidance include that economic conditions, currency rates and the tax and regulatory landscape remain generally consistent. Adjusted EPS guidance assumes approximately $76 million of interest expense, a 26 percent tax rate and a 267 million weighted average diluted share count. We have not reconciled Adjusted EBITDA and Adjusted EPS outlook to the most comparable GAAP outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management’s control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide outlook for the comparable GAAP measures. Forward-looking estimates of Adjusted EBITDA and Adjusted EPS are made in a manner consistent with the relevant definitions and assumptions noted herein.


Contacts:

Investor Relations		Media Relations
investorrelations@petco.com		Benjamin Thiele-Long
		benjamin.thiele-
		long@petco.com


Metric	Current Guidance
Net Revenue	$6.15 - $6.25 billion
Adjusted EBITDA³	$630 - $645 million
Adjusted EPS³	$0.97 - $1.00
Capital Expenditures	$275 - $325 million

	13 Weeks Ended
(in thousands)	April 30, 2022			May 1, 2021
Net income	$	5,133		$	4,849
Depreciation		4,294			3,400
Income tax expense		2,997			2,780
Foreign currency gain		(64	)		(145	)
Interest expense, net		1,196			1,128
EBITDA	$	13,556		$	12,012
50% of EBITDA	$	6,778		$	6,006