Pets at Home experienced “weaker than expected” sales during its first half after seasonal challenges. This is what the analysts had to say.
“Today’s pre-close update from Pets At Home is a bit underwhelming, dashing City hopes of a pick-up in the second quarter – in fact the like-for-like sales outcome for the first half (the 28-week period to 8th October) of 1.8% is only a tad higher than the disappointing first quarter outcome and the statement notes the “continuing seasonal challenge to health and hygiene products”.
”The services side of the business is still growing nicely, but the chief executive Nick Wood flags that “trading in parts of the business has been weaker than expected” and his conclusion that “our full-year profit outlook is broadly in line with market expectations” is not exactly a ringing endorsement, so we are not surprised to see the shares down 7% or so first thing.” – Nick Bubb, independent analyst
“The first-half pre-close is disappointing, coming in slightly worse than expectations. There has been little pick up in merchandise performance since the softer first quarter, with health and hygiene being impacted by the late onset of the flea season.
“We remain confident of the long-term growth prospects and believe the progress made in other key areas (Advanced Nutrition, services, VIP numbers) is supportive of this. Management believes health and hygiene sales have been down across the market, which is supported by its conversations with suppliers.” – Adam Tomlinson, Liberum
“In spite of this like-for-like slowdown, this period did see a strong performance in Advanced Nutrition, its hugely popular VIP Club loyalty scheme, omnichannel, and services. Its Advanced Nutrition ranges continue to benefit from the ongoing trend for ‘pet humanisation’, with a more confident consumer willing to invest more into their pets to give them the very best food they can afford.
“Elsewhere, the retailer’s VIP Club added a further 300,000 members since the first quarter, with membership now at an enormous 3.9 million – highlighting both the popularity of pet ownership in Britain, but more importantly the strong appeal of the Pets at Home proposition with pet care consumers.
“While Pets at Home has successfully established itself as the leading multichannel pet retailer in the UK, physical expansion remains a core growth driver. The retailer opened six superstores over the period, as well as two Barkers outlets – its upmarket fascia specialising in products
“Going forward, Pets at Home should feel the benefit of its new store and service openings being second-half weighted with these likely to be important boosts to its overall performance.” – Greg Bromley, Conlumino