Pets at Home raises profit expectations as trading 'normalises'

Pets at Home referenced its “investment in omnichannel capacity and customer acquisition channels”, and the adaptability of its operations, as it reported positive trading momentum today (24 September).

The retailer, which runs pet shops and veterinary services across the UK, said it expected full-year pre-tax profit to be around £73 million – a figure higher than previous market expectations.

The company, which has already reported sales momentum returning in a first-quarter update, reflecting normalisation of shopping habits and the re-instatement of services which closed in the Covid-19 lockdown, said the eight weeks to 10 September saw double digit like-for-like (LFL) sales growth year on year.

Pets at Home acknowledged Covid-19 continues to create “a number of material uncertainties around the trading environment”, and noted there is a risk of a second lockdown, but it is confident in its model and is encouraged by its recent performance.

First quarter total group and like-for-like revenue at the retailer, announced in July, dropped by 1% and 0.7%, respectively, compared to the equivalent quarter in 2019. But it was a tale of two halves with like-for-like revenue down by 13.5% in the initial eight weeks before growing 12% in the subsequent eight weeks, reflecting consumers adjusting to the lockdown period.

Omnichannel revenue – defined by the retailer as orders placed online or in-store using the company’s order-in-store service, as well as subscriptions to monthly flea and worm treatments on its 'Subscribe & Save' platform, grew by 71% in quarter one.

Pets at Home is also building a new warehouse and office facility in Stafford, with plans to move to the site in 2022.

The company said in July it wanted to consolidate its legacy infrastructure into “a single, modern, well-located and future focused platform” which will help the organisation meet changing consumer behaviours.