Latest news with #LyssaMcGowan
Daily Mail
7 days ago
- Business
- Daily Mail
Pandemic boom in demand for puppies and kittens 'is over', says Pets at Home boss
The boss of Pets At Home has said that a pandemic boom in demand for puppies and kittens is over as the company warned weak demand is not expected to recover soon. Chief executive Lyssa McGowan pointed to 'normalising levels of new pet ownership' after a 'massive' Covid-driven increase faded. This 'feels like a real headwind' for the FTSE 250 business as puppy and kitten owners tend to 'spend a lot of money in retail in the first year,' McGowan added. The number of new cat and dog owners is not growing at such a rapid rate. 'We are lapping years of boom with – not quite bust – but much lower growth and stabilisation,' she said. Pets At Home reported revenues little changed at £1.48billion while profits rose 14 per cent to £121million, as it warned consumer confidence would continue to be 'subdued' this year. But McGowan said she was hopeful the group would be able to boost sales of products for ageing pets, such as salmon oil or supplements which help with aching joints. And a record number of owners signed up to its loyalty scheme, with members rising 5 per cent to 8.2million. Labour's Budget has also piled £18million in annual costs onto the business, contributing to an 11 per cent decline in its share price since the October statement. Higher costs include National Insurance Contributions and minimum wage increases, which McGowan described as 'significant and unexpected'. In response, the business is increasing its use of automation and artificial intelligence across its 450 stores and distribution hubs. McGowan would not be drawn on whether this would mean fewer jobs. And the chief executive warned that the looming threat of a cyber attack was now 'the new normal' after high-profile episodes involving retailers such as Marks and Spencer. 'Of course it concerns me, it would concern every retail chief executive in the UK and world right now,' she said. 'Clearly there has been a focus on this industry and we are extremely vigilant. I don't think it is going away.' Retail sales slumped 1.8 per cent to £1.3billion for the year to March 27. In contrast, its veterinary services division saw sales improve by 16.8 per cent to £175million. McGowan also admitted that the group faced 'ongoing uncertainty' from an investigation by the Competition and Markets Authority (CMA) into the veterinary sector.
The Independent
31-03-2025
- Business
- The Independent
Pets at Home shares drop as rising costs to eat away at profits
Shares in Pets at Home have tumbled by more than a 10th after it warned over declining profitability this year thanks to subdued consumer confidence and a raft of higher business costs. The company said it had seen challenging and volatile conditions for UK consumers in recent months. It nonetheless expects to report an underlying pre-tax profit of £133 million for the year to March 27, which is what analysts had forecast. Pet owners signing up to the brand's loyalty scheme have reached record numbers amid more available vets and nurses, it said. Pets at Home sells small animals like rabbits and hamsters and products for pets including dogs and cats through its retail division, and also provides veterinary healthcare and grooming services at centres across the country. It makes more than half of its underlying profits through the vet arm, which has grown to more than 440 general practices in shops and as standalone centres. But the business warned its retail arm will come under pressure from weakness in the UK pet market, with consumers continuing to tighten their belts amid wider economic uncertainty. Pets at Home said it is focusing on things it can control like keeping a tight control of costs, with plans to make significant savings through cost-cutting and productivity initiatives. It is preparing for costs to lurch upwards this year, expecting a roughly £18 million impact from higher national insurance contributions and the increased national minimum wage. Taking into account expectations for consumer demand and costs, Pets at Home said it expects underlying profits for its retail division to decline year-on-year. It is forecasting group underlying pre-tax profit to decline to between £115 million to £125 million for the year to the end of March 2026. Lyssa McGowan, Pets at Home's chief executive, said: 'We are making good progress in delivering our strategy of building the world's best pet care platform, although the market remains challenging with subdued consumer confidence and the business facing significant external cost headwinds in 2025.' She said the vets business continues to 'outperform the market' with new openings planned this year, while the retail side is 'well placed for future growth as the short-term pressures ease the and the consumer environment improves'. Russ Mould, investment director for AJ Bell said: 'While Britons are famously devoted to their furry friends, consumers have less disposable cash to spend on toys and treats, and are focusing more on the essentials which is making life difficult for a specialist like Pets at Home. 'There is also competition from larger, non-specialist rivals like the supermarkets who have more capacity to compete on price. 'Pets at Home still hopes to take market share thanks to investment in its digital platform and continued progress in getting customers to sign up to its loyalty scheme. 'It needs to generate some momentum with sales to mitigate the impact of rising costs associated with changes in last year's Budget.'
