Dive Brief:
- Petco’s relaunch of the Petco Perks loyalty program weighed on net sales after “customer point redemption volumes far exceeded our initial projections,” CEO Joel Anderson said on a Q2 2026 earnings call Wednesday.
- Prior to the launch of the updated program, sales were tracking above Petco’s second quarter outlook of 0.3% growth, CFO Sabrina Simmons said. The retailer ultimately reported that its sales remained essentially flat year over year due to “mid-single-digit millions of impact” from Petco Perks.
- Petco “acted swiftly to deploy post-launch guardrails on redemption velocity,” and leaders believe the height of redemption volumes have passed, Anderson said. The company will now focus on improving the loyalty program’s personalization capabilities to support long-term growth.
Dive Insight:
Following its initial launch, Petco Perks became a victim of its own success.
The loyalty relaunch focused on removing friction from the program for customers and associates alike, according to Anderson. Point redemption had been more difficult in the prior version of Petco Perks, which limited customer engagement.
Effective in late June, Petco Perks members earn 10 points for every dollar spent on most products, and 30 points per dollar spent on private label brands, according to Petco. Users can redeem 1,000 points for a $1 discount.
The retailer reported its second consecutive quarter of same-store sales growth, up 0.6% year over year in the second quarter of 2026, according to an earnings release. While largely flat, it's an improvement from the four quarters of comp declines last year.
Despite the early challenges, Petco has high hopes for Petco Perks in the future, according to Anderson.
“We expect our new membership program to serve as a key catalyst that supports our long-term growth, and we are encouraged by early personalized offer tests,” Andersons said. “The balance of the year will be focused on these capabilities, and we expect a positive impact to emerge in 2027.”
