This research explores the Low-Velocity Impact behavior of thermoplastic composite sandwich panels with 100% recycled Polyethylene Terephthalate (PET) foam sourced from post-consumer plastic water bottles. Being recognized as a reliable technique, hybridization using stainless-steel mesh layers was employed to reinforce the panels’ composite facesheets of sandwich panels accessible for modular housing, cold storage rooms and cargo trucks. Adequate impregnation of the reinforcement metallic mesh layer alongside proper skin-to-core adhesion was accomplished by optimizing a two-phase compression molding method. The effect of hybridization on impact response of sandwich panels with two different PET foam core thicknesses, and stacking sequence were evaluated. It was revealed that reinforcing the impacted surface of the composite sandwich panels significantly increased the perforation threshold. Moreover, analyzing the post-impact section view of the samples indicated that hybridization modified the damage propagation response of the PET foam core sandwich composites, through which the energy absorption capacity was improved.