Costs hit Pets at Home profits but it is ‘resilient’
Retail chain Pets at Home has reported a fall in interim profits as it came under pressure from higher freight and energy costs.
The group said underlying pre-tax profit dropped by 9.3 per cent to £59.2 million over the half-year to October 13, compared with the same period a year earlier. It noted that this was in line with expectations as it held profit targets for the year and hailed a “resilient” pet care market.
Chief executive Lyssa Mcgowan said the performance showed “progress” as the business notched up “new records for customer numbers in recent months”.
Pets at Home said new customer numbers are “strong” after it benefited from an acceleration in people registering for its Puppy & Kitten club membership over the half-year. It highlighted that consumer demand has stayed strong as a result of record levels of UK pet ownership, despite pressure on household budgets.
The company also told investors it is actively managing cost headwinds, such as unfavourable foreign exchange rates, energy costs and wage rises.
Lara Martinez, an analyst at Third Bridge, noted: “The UK saw a massive increase in pet ownership during Covid and our experts expect growth, albeit at a slower pace, to continue over the next two to five years as a structural shift in working patterns takes hold.
“Pets owners will strongly resist trading down their pet food and pet care purchases during an economic downturn.”
Mcgowan told investors: “Our first-half performance shows progress and resilience across the business.”