Pets at Home: Shares crater after retailer predicts slow growth in ‘subdued market’
Animal care retailer Pets at Home described the market as subdued due to cautious consumers, and said it will grow more slowly than expected in the next six months – despite a big hit from the Budget.
Shares fell more than 10 per cent in early trades, with the retailer’s share price now down nearly 20 per cent in the last month.
In an update to markets this morning, the retailer said revenue grew 1.9 per cent to £789.1m in the 28 weeks to October 10., with like-for-like revenue up 1.6 per cent.
The slowdown was primarily seen in its retail arm, which grew just 0.1 per cent in the first half of the year.
Pets at Home said it was a “resilient performance against a declining retail market” and reflected with “the previously flagged impact of our new digital platform transition.”
Revenue growth in its vet arm “remained strong” at 18.6 per cent, with double digit revenue growth “supported by growth in subscriptions, visits, and average transaction values,” the company said.
Operating costs fell 3.5 per cent, which was driven by productivity measures offsetting cost inflation – primarily changes to the National Living Wage – as well as lower non-underlying costs and cost control, Pets at Home said.
The company said changes to the National Living Wage and employers National Insurance Contributions (NICs) announced in the Autumn budget would add £18m in cost headwinds in the financial year 2026.
Pets at Home said it will “continue to proactively mitigate these cost increases where possible, including through our ongoing productivity programmes and investments in automation”.
Pets at Home chief executive Lyssa McGowan said: “The first half of FY25 was characterised by a subdued market, against which we outperformed. In vets, our differentiated joint venture model continues to drive material outperformance over peers. In retail, our customer satisfaction is excellent, our price position is strong, and we have tight control of our cost base.
The company added that it expected the slowdown in the pets market to be short-lived.
“We are confident that market growth will improve in future, supported by long-established and unchanged structural growth trends and a stable but higher pet population.
“As growth returns to historical long-term averages of four per cent (around three per cent for retail and five per cent for vets) in future we would expect to deliver revenue and profit growth in line with our medium-term ambition,” it said.