Pets at Home, a popular retailer for pet supplies and services, has recently issued a warning regarding their profit growth. This warning comes as a result of weaker consumer demand, which has led to what the company describes as “unusually subdued” conditions in the market. Additionally, Pets at Home also expects to take a hit from tax increases announced in the Autumn Budget.
In the 28 weeks leading up to October 10th, Pets at Home saw total revenues increase by 1.9% to £789.1 million. While there was strong growth in their vet business, retail revenues only grew by 0.1%. This minimal growth in retail was impacted by declining retail markets and the transition to a new digital platform.
Lyssa McGowan, the chief executive of Pets at Home, acknowledged the challenges they are facing in the current pet retail market. She expressed confidence that this period of subdued growth will be temporary and that the company will return to its historical norms of growth. Despite the current challenges, the long-term outlook for the UK pet care market remains positive.
In terms of financial performance, Pets at Home reported a 47.3% increase in pre-tax profits to £51.1 million for the half year. However, the company has also warned that they anticipate an £18 million hit in the next financial year. This hit is expected to come from the increase in the minimum wage and employer’s national insurance contributions.
This news has had a significant impact on Pets at Home, as evidenced by the 10% drop in their shares on Wednesday following the announcement. Investors and shareholders will be closely monitoring the company’s performance in the coming months to see how they navigate these challenges and work towards sustainable growth.
Overall, Pets at Home remains optimistic about the future, despite the current difficulties they are facing. The company is confident in the resilience of the UK pet care market and believes that growth will eventually return to normal levels. In the meantime, they are focused on addressing the challenges at hand and ensuring that they are well-positioned for success in the long run.
