Pets at Home warns over profits as market remains ‘subdued'
The chain cut its guidance for 2025-26 as it struggles against a 'subdued market backdrop and uncertain consumer environment'.
It reported a 3% drop in like-for-like retail sales over the 16 weeks to July 17, marking the third quarter in a row of falling sales.
Pets said that with market growth expected to be just 1% against the 2% forecast, it now expects annual profits to fall to between £110 million and £120 million.
This is down significantly from the £133 million reported the previous year and the guidance given in May for £115 million to £125 million.
The group said: 'At our 2024-25 results we set our full-year 2025-26 guidance based around an assumption of 2% growth in the pet retail market.
'While this scenario assumed improving growth through the year, the market growth rates experienced through the first quarter have been below those initial expectations.'
Pets also cautioned that if market conditions continue as they are, it would likely deliver a result at the bottom end of the pared-back guidance.
'Reaching the top end of guidance would require a step up in market growth, while the bottom end of guidance would imply a continuation of current subdued market trends through the remainder of the year,' it said.
Shares in the group fell more than 8% at one stage in Thursday-morning trading after the profit alert, before settling around 3% lower.
Pets said tight cost control was helping its profit margins hold up, despite a 'determination to remain price competitive' and in the face of an extra £20 million in costs this year due to a soaring wage bill.
The group said its Vet Group offering was proving more resilient, with like-for-like revenues jumping 7.8%.
It also grew its its Pets Club membership by another 1.8% to 8.1 million customers, with the proportion of revenues from subscriptions now at 14.5%.
Lyssa McGowan, chief executive of Pets at Home, said: 'We are pleased to have seen momentum in our business build through the first quarter, against a subdued market backdrop and uncertain consumer environment.'
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