Pets at Home, based in Cheshire, has revised its profit expectations downward, citing lower-than-anticipated progress in its retail business. Despite resilient growth in the third quarter, the company stated that retail performance did not meet expected levels. The revised full-year underlying pre-tax profit estimate is around £132m, factoring in no sequential improvement in the retail business run rate through Q4.

 

During the 12 weeks ending January 4, 2024, the company reported a 4.3% increase in group revenue to £362.4m, with a 4.4% rise in like-for-like revenue. While consumer revenue grew by 6%, retail sales increased by 3.5%, and like-for-like retail sales rose by 3.7%.

 

Pets at Home emphasized its robust balance sheet and anticipated ending the year in a net cash position. Despite the challenges, CEO Lyssa McGowan highlighted the company's resilience and expressed optimism about long-term sector growth. She mentioned ongoing initiatives such as the new distribution center and the upcoming launch of a digital platform, a crucial element of the growth strategy.

 

McGowan underscored the significance of the digital platform, aiming to enhance user experience, facilitate cross-selling, and increase the share of the wallet. The company remains well-positioned for the future, having opened new pet care centers, completed refits, and expanded its veterinary division during the year.

 

John Coldham, co-head of the retail sector (UK) at Gowling WLG, commented on the challenges faced in the first half of the year and highlighted the company's efforts to diversify revenue streams through digital investments, veterinary services, and grooming facilities. He noted the growth of VIP members and the potential impact of a new app on customer engagement. Despite increased costs due to inflation, the company's online investment and a new distribution center are seen as key elements in meeting rising demand and appealing to investors.