Petco Health and Wellness Company, Inc. Securities Lawsuit Investigation

Shamis & Gentile P.A., a law firm that advocates for investors who are victims of securities fraud, is investigating potential claims against Petco Health and Wellness Company, Inc. (WOOF).

If you purchased or held Petco Health and Wellness Company securities and suffered losses, you may be eligible to join this securities investigation and seek compensation.

The matters described are allegations, not findings of fact. No court has determined liability.

About Petco Health and Wellness Company

Petco Health and Wellness Company, Inc. is an omnichannel pet health and wellness retailer incorporated in Delaware. As of February 3, 2024, Petco operated 1,423 pet care centers and 288 full-service veterinary hospitals across the U.S. and Puerto Rico. The company offers a mix of consumables, supplies, exclusive and national brands, and services such as grooming, training, and veterinary care, with digital channels supporting buy online, pick up in store (BOPUS), curbside, and same-day delivery options (10-K 2024, 10-K 2025).

Petco has positioned itself as a health-focused pet company, emphasizing its commitment to premium, healthy pet foods with no artificial ingredients and leveraging trends such as “pet humanization” and “premiumization.” According to company filings, Petco has targeted younger, health-conscious consumers who are said to treat pets more like family members and invest in premium products (10-K 2024, S-1/424B4 2021).

The company is classified as a “controlled company” under Nasdaq rules, with significant voting and director nomination rights held by its principal stockholder, Scooby Aggregator, LP, which is jointly controlled by CVC and CPP Investments (DEF 14A 2025).

What's being investigated

The investigation centers on allegations that Petco may have made misleading statements or omissions regarding the sustainability of its pandemic-era growth and its ability to capitalize on pet industry trends. According to public filings and investor reports, Petco consistently highlighted the benefits of pandemic-related tailwinds, such as increased pet adoption, and asserted that these trends would continue to drive growth and profitability even after the pandemic subsided (10-K 2024, 10-K 2025, Petco Q2’23 release).

Petco also promoted its transformation into a health-focused retailer, emphasizing its unique position to benefit from “pet humanization” and “premiumization.” However, investors allege that as pandemic-related tailwinds faded, Petco’s sales and profitability declined significantly, raising questions about the accuracy and completeness of the company’s prior disclosures. By mid-2023, Petco’s financial performance reportedly deteriorated, with further declines and strategic pivots occurring through 2025 (MarketWatch, Apr. 2025, PR Newswire, July 2025).

Key timeline

• 2019 — Petco announces removal of artificial ingredients from its nutrition standards, laying groundwork for its health and wellness positioning (S-1/424B4 2021).
• Jan. 14, 2021 — Petco completes its IPO and rebrands as Petco Health & Wellness, emphasizing “premiumization/humanization” trends (S-1/424B4 2021).
• Aug. 24, 2023 — Petco issues Q2’23 results, revising FY2023 guidance downward due to discretionary pressure; stock drops approximately 20.6% (Petco Q2’23 release, AP News, Aug. 24, 2023).
• Mar. 13, 2024 — CEO Ron Coughlin steps down; R. Michael Mohan becomes Interim CEO (WSJ, Mar. 2024).
• May 14, 2024 — Glenn Murphy appointed Executive Chair, acquires 1.5 million shares, and supports CEO search (WSJ, May 14, 2024).
• July 29, 2024 — Joel Anderson named CEO (Investopedia, July 2024).
• Q4 FY2024 (reported April 2025) — Petco reports sales down ~7% year-over-year; FY2025 guidance indicates a slight sales decline but projects double-digit Adjusted EBITDA growth (MarketWatch, Apr. 2025).
• Feb. 17–18, 2025 — CFO transition: Sabrina Simmons appointed CFO, succeeding Brian LaRose (PR Newswire, Feb. 18, 2025).
• June 5–6, 2025 — Q1 FY2025 comparable sales down 1.3% year-over-year; stock declines approximately 23% (PR Newswire, July 2025).

Why investors may be concerned

Investors allege that Petco may have made misleading statements or failed to disclose material information about the sustainability of its growth drivers, including the impact of fading pandemic tailwinds and the company’s ability to maintain premiumization strategies. According to the complaint and analyst reports, Petco’s board and officers may have lacked effective systems to monitor and report on mission-critical risks, such as product standards and shifting sales mix, or may have disregarded warning signs as financial performance declined (DEF 14A 2025, 10-K 2025, Marchand, Del. 2019, Boeing, Del. Ch. 2021).

Stockholders also contend that the influence of controlling shareholders and the composition of the board—where a majority of directors are affiliated with principal stockholders—could have impaired independent oversight of risk and disclosure controls (DEF 14A 2025, United Food v. Zuckerberg, Del. 2021).

Possible legal pathways

Potential legal actions may include:

• Stockholder derivative actions: Investors may pursue claims on behalf of the company, alleging breaches of fiduciary duty by directors or officers for loyalty or bad faith, such as knowingly making false statements or failing to respond to red flags (Marchand, Del. 2019, McDonald’s, Del. Ch. 2023).
• Securities class actions: Parallel litigation may allege violations of federal securities laws based on alleged misstatements or omissions (PR Newswire, July 12, 2025).
• Section 220 books-and-records demands: Investors may seek company records to investigate potential wrongdoing or mismanagement before filing suit (Marchand, Del. 2019).
• Regulatory investigations: While not specifically disclosed, such allegations could prompt review by the SEC or other authorities.

What documentation exists so far

Key primary sources and filings include:

• Form 10-K for fiscal year 2024 and Form 10-K for fiscal year 2025 — annual reports detailing business strategy, risk factors, and financial performance.
• DEF 14A 2025 — proxy statement with board composition, governance, and compensation disclosures.
• Certificate of Amendment (EX-3.1, June 22, 2023) — amending charter to extend exculpation to directors and officers.
• Petco Q2’23 earnings release — guidance cut and financial results.
• PR Newswire, July 12, 2025 — announcement of securities class action.
• MarketWatch, April 2025 — coverage of Q4 FY2024 sales decline and guidance.
• WSJ, March 2024, WSJ, May 2024, Investopedia, July 2024 — reporting on executive changes.

What investors can watch next

Investors may monitor:

• Upcoming quarterly earnings releases and guidance updates.
• Any new disclosures in SEC filings or company press releases.
• Progress of the securities class action and any related court milestones.
• Announcements of governance or board composition changes.

If additional regulatory investigations or whistleblower complaints arise, those may also be disclosed in future filings.

FAQ (allegations-only)

What is a derivative lawsuit?

A derivative lawsuit is a claim brought by shareholders on behalf of the company, typically alleging that directors or officers breached their fiduciary duties.

Does this article mean the company broke the law?

No. The matters described are allegations only. No court has determined liability.

What types of governance reforms can result?

Potential reforms may include new board committees, enhanced disclosure controls, compensation changes, and improved oversight protocols.

Can officers be exculpated from these claims?

Under Delaware law, officers cannot be exculpated from derivative claims for breaches of loyalty or bad faith (EX-3.1, June 22, 2023; Del. SB 273 synopsis).

What is a Section 220 demand?

A Section 220 demand is a formal request by shareholders to inspect a company’s books and records to investigate potential wrongdoing.

Your Rights and Next Steps

This is an ongoing investigation that may lead to a stockholder derivative action. If you held Petco stock during the relevant period and suffered losses, you may have the right to:

• Request company books and records under Delaware law (Section 220) to investigate alleged misstatements or oversight failures.
• Participate in a derivative action if the investigation uncovers evidence suggesting breaches of fiduciary duty by directors or officers.
• Seek governance reforms or monetary recovery for the benefit of the company if wrongdoing is proven.

To preserve your rights, you must have held shares continuously during the relevant period and through any potential judgment. Derivative actions are subject to specific procedural requirements, including demonstrating that making a demand on the board would be futile due to conflicts or lack of independence (United Food v. Zuckerberg, Del. 2021).

You May Be Entitled to Compensation

If you purchased or held Petco Health and Wellness Company securities and suffered losses, you may be eligible to join this investigation. Securities investigations are time-sensitive, and your ability to participate may depend on when you act.

To join the investigation, complete the form below to provide your information and learn more about your options.

Contact / information request

If you have information relevant to these allegations, you may contact us to share documents or tips.