30 January 2024

Pets at Home cuts profit targets as retail demand slows

30 January 2024

Pets at Home has cut its profit guidance after the pet care business was knocked by slowing retail demand.

The company, which runs about 450 retail stores and 440 veterinary practices, said growth in its retail arm was “not at the levels we had expected” in the latest quarter.

It told shareholders that group revenues grew 4.3% year on year over the 12 weeks to January 4, with 4.4% like-for-like growth.

This represented a slowdown after 6.5% total revenue growth in the previous six months.

Pets at Home said this was largely caused by its retail business, which reported sales growth of 3.5% for the quarter.

The company said this was “resilient” against a “very strong performance” over the same period last year, but that it was impacted by “soft” demand for accessories, while price inflation also slowed.

The weaker retail performance was partly offset by continued strong growth in its vet business, which saw revenues jump 13.4% over the quarter.

Nevertheless, the group said it now expects to deliver a pre-tax profit of around £132 million for the current financial year, having said in November it was on track for £136 million.

Lyssa McGowan, chief executive officer, said: “Our colleagues came together over our peak trading period to deliver a record sales performance, growing against a very strong performance in the prior year.

“While a slower market over peak meant our sales growth didn’t quite hit the levels we expected, the business remains well-positioned to benefit from long-term growth in the sector as we continue to win share and grow volumes across food, and deliver differentiated performance through our unique vets business.

“Our new digital platform is a key foundation of our growth strategy, bringing vastly improved user experience to our consumers and creating opportunities to improve cross-sell into accessories and further grow share of wallet.

“With these foundations now in place, we are well-positioned for the future.”

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