Petco Faces Sales Challenges Following Loyalty Program Relaunch
Petco’s relaunch of its loyalty program, Petco Perks, has had an unexpected impact on the company’s net sales, according to CEO Joel Anderson during a Q2 2026 earnings call. The point redemptions by customers significantly surpassed what the company had forecasted, leading to challenges in their financial results.
Financial Impact and Strategic Adjustments
Initially, before the updated Petco Perks launch, the company’s sales were trending above their Q2 growth forecast of 0.3%, reported CFO Sabrina Simmons. However, the unexpected redemption rates contributed to a “mid-single-digit millions” decrease in sales, causing yearly sales to remain flat. Petco has implemented post-launch strategies to manage this redemption surge, and the company is optimistic that this phase has peaked. Their strategy now includes enhancing the program’s personalisation capabilities to fuel sustained expansion, Anderson stated.
Changes and Customer Engagement
The revamp of Petco Perks aimed to streamline customer interaction, mitigating previous engagement barriers caused by difficult redemption processes. As of late June, the loyalty program rewards members with 10 points per dollar on most products, and 30 points per dollar on private label brands. These points can be redeemed, with 1,000 points equating to a $1 discount.
Growth and Future Prospects
Despite these setbacks, Petco recorded a 0.6% year-over-year growth in same-store sales for the second quarter of 2026, marking its second consecutive quarter of growth after experiencing declines for four consecutive quarters last year. Anderson expressed optimism about the future of Petco Perks, highlighting its potential as a growth catalyst over the long term. He is particularly encouraged by early results from personalised offer tests, anticipating a positive business impact to materialise in 2027.
Reporting based on coverage first published by retaildive.com.