Pets at Home has reduced its full-year profit guidance, reporting sales “not at the level it had expected” as shoppers pulled back on discretionary accessories like beds, collars and leads for their pets.
The petcare retailer now expects FY24 group underlying profit before tax to be £132m, a reduction of around 3% which assumes no improvement in its retail like-for-like run rate in the final quarter.
In the 12 weeks to January 4, 2024, Pets at Home reported a 4.3% increase in group revenue to £362.4m, with like-for-likes up 4.4%. Retail sales were up 3.5% against strong comparables from last year, but the growth “fell below our expectations”, according to the retailer.
Members of its VIP loyalty scheme increased 2% year on year to 7.7 million.
Pets at Home gained share and volume growth across food, but said discretionary spend on pets had softened and inflation slowed, which has dampened sales on accessories.
In a statement to investors, the retailer said returning accessories to growth was a “key priority for the business”, and it has already launched a range of premium accessory brands in stores in Q3 to drive growth.
It also said it hoped to launch a new service and retail digital platform for pet owners in the coming weeks, featuring a new app and website, which offers shoppers an “improved customer experience”.
Digital “foundation for growth”
Pets at Home CEO Lyssa McGowan 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.
”Importantly, we will shortly follow up launching our new distribution centre with the launch of our new digital platform, in line with our target.
“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.”
Vet group revenue for the period increased 13.4%, with like-for-like growth up 13.3%.
In the year to date, Pets at Home opened four new stores and three vet practices, completed 33 refits and 16 extensions and added eight company-owned practices to joint venture ownership.
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