© Reuters. Christmas toys for pets on display at the Pets and Home store in Weymouth, Britain, November 10, 2023. REUTERS/Josephine Mason
By Radhika Anilkumar
(Reuters) – UK retailer Pets At Home cut its annual profit forecast on Tuesday after weakness in third-quarter demand for pet accessories such as collars and bedding.
It now expects underlying pre-tax profit of about 132 million pounds ($167.5 million), down from a previous target of about 136 million, said the company, which has more than 450 pet care centers across the UK and offers grooming and veterinary services.
“That (key accessories) is where we’re seeing customers just stretching their spending that might go months without replacing,” CEO Lyssa McGowan said in an interview.
The company posted a 3.7% increase in third-quarter retail revenue with its veterinary business up 13.3% on a like-for-like basis.
Its shares fell as much as 6% in early trading before paring losses. They were down 1.3% at 289.2 pence by 0915 GMT.
“Pet owners continue to shy away from buying more profitable, but less important, extras,” Sophie Lund-Yates equity analyst at Hargreaves Lansdown (LON:) wrote in a note citing cost-of-living pressures.
In May, the company said it was investing in a new distribution center and a digital platform.
The third quarter could have picked up softer trends in accessories if it hadn’t been coupled with that investment, McGowan said.
Most of Pets At Home’s sources are from the UK and Europe with some accessories coming from Hong Kong and it said it did not expect the Red Sea shipping attacks to affect its shelves.
Seasonal lines such as Valentines Day pet food and accessories are already in stores and stock for Easter has arrived at its warehouse, McGowan added.
($1 = 0.7883 pounds)
