Pets at Home tumbles as profits set to drop next year
tumbled on Monday as it said profits were set to fall next year as an uncertain economic backdrop and increased costs take their toll.
In an update for the year to 27 March, the company said group underlying pre-tax profit is expected to be £133m, in line with previous guidance. It said fourth-quarter trends have been broadly as expected across the retail and vet segments, "against a challenging and volatile UK consumer backdrop".
For FY26, however, underlying pre-tax profit is expected to decline to between £115m and £125m. Broker Shore Capital said consensus expectations were for growth to £142m.
The company pointed to cost increases, including the upcoming changes to national insurance contributions and the national living wage, which will have an impact of around £18m. In addition, there will be a £2m hit from new packaging regulations and Pets at Home plans to invest a further £3m in marketing costs to drive sales.
"We expect the current market conditions and subdued consumer backdrop to continue into the new financial year," it said.
"Overall, taking into account our current view of demand and costs we expect Retail underlying PBT to decline year on year."
At 0830 BST, the shares were down 13.5% at 204.40p.
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