Following today’s release of Pets at Home’s figures for the 12 weeks ending 4th January 2024; Jamel Boughedda, retail analyst at GlobalData, a leading data and analytics company, offers his view: “Despite Pets at Home showcasing another resilient quarter, with group revenue gaining 4.3% to £362.4m, the retailer has lowered its profit guidance as trading in its retail business has not been able to keep up with expectations. Pets at Home lowered its underlying profit before tax guidance for FY2023/24 from £136m to £132m, with its strong veterinary and consumer performance unable to hold up its retail business, which is not expected to improve in Q4 as it comes up against an exceptionally strong trading period last year.
“Pets at Home’s retail division has been unable to live up to prior levels of growth as it came up against a strong comparative (+8.0%), falling below its expectations. Sales of more discretionary accessories remained “soft” this quarter, as consumers cut back on buying less essential products for their pets. However, retail revenue still increased 3.7% on a like-for-like (l-f-l) basis, with customers still treating their furry companions over the Christmas period. The retailer needs to continue to expand and improve its ranges to achieve a bounce back in accessories sales, with a focus on trading consumers up, especially through its premium own brands on items such as collars, gifts, and harnesses, but also by expanding its seasonal ranges, something the retailer previously commented on when it reported a strong performance over Halloween.
“Performance in Pets at Home’s veterinary services has not wavered, with Q3 l-f-l revenue increasing 13.3%. This marks yet another quarter of double-digit growth as the health of pets is an area that consumers have to spend on, and owners’ average spend in this market increased. The addition of new vet talent and more advanced procedures supported Pets at Home’s veterinary performance as owners continue to prioritise their pets despite their squeezed discretionary spending. The essential nature of veterinary services, combined with Pets at Home’s improved services and the opening of three new practices in the year to date has meant its vet group performance has been resilient and this momentum should continue into its next financial year.”
