Shares in Pets at Home (PETS) rallied 5.3% to 211p after the UK pet care leader reiterated its FY26 outlook and avoided another damaging profit warning. To recap, former CEO Lyssa McGowan stepped down in September last year, carrying the can for a share price-crunching earnings alert from the Cheshire-headquartered company.
| Share price: 211p (+5.3%) | PE: 14.1 |
| Market cap: £891m | Yield: 6.6% |
Investors were relieved as the pet accessories-to-veterinary services provider insisted third quarter trading ‘fell within the range of our expectations’. Pets at Home also flagged sequential growth improvement in the retail consumer business.
For the third quarter to 1 January 2026, total group revenue fell 1% year-on-year to £358 million with like-for-like sales down 0.7%. This leaves Pets at Home on track to deliver full year underlying pre-tax profit in line with consensus of £93 million, which would represent a decline from last year’s £133 million.
PRICE CUTS REVIVE VOLUMES
During the quarter, vet group consumer revenue was up 5% while retail consumer revenue softened 1.1%. Nevertheless, Pets at Home highlighted positive volume growth across food and accessories in the retail consumer arm.
‘Q3 saw sequential improvement in growth during a period where we invested in our relative price position,’ said the FTSE 250 firm, code for price cuts to entice cash-strapped pet owners away from the competition. ‘Online remains the fastest growing channel, delivering low teens growth throughout the quarter,’ added the company.
Ian Burke, Pets at Home’s interim executive chair, commented: ‘I’m pleased to report continued strong performance in our vet business and sequential improvement in retail, as we continue to implement our Retail Turnaround Plan. One of our key early actions as part of this plan included investing in our customer offer, reducing the price of over 1,000 products by an average of 12%, ensuring our customers know they can trust us to provide great value for them and their pets.’
Pets at Home also stressed that subscription sales remain a strong growth area, representing 15% of consumer revenues.
The specialist retailer recently named former Waitrose managing director James Bailey as its new CEO, while Sarah Pollard takes over from Mike Iddon as CFO in March.
Sentiment towards Pets at Home is likely to remain poor given prevailing weak consumer confidence and an ongoing CMA (Competition & Markets Authority) probe into the UK veterinary sector.
Price cuts may be stoking volume growth in the retail business, but this comes at the expense of gross margins, so the stock is for risk-tolerant investors only at this stage.
Read the press release here: https://www.petsathomeplc.com/investors/regulatory-news/
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