Pets at Home profits fall due to increased costs of energy and freight

For the 28 weeks to October 13 Pets at Home reported group underlying profit before tax of £59.2m, down 9.3% due to inflated costs associated with international shipping, the spiralling cost of energy and a year-on-year increase in investment in digital assets.

Total group revenue was up 7.3% to £727.2m for the period, with group like-for-like sales up 6.4% and customer levels hitting record numbers in the first half. 

Pets at Home said it expected no material change to its full-year guidance and continued to expect underlying profit to be in line with analyst consensus, which is currently £131m.

Group free cash flow for the period was down 54.8% to £41.4m reflecting year-on-year profit performance.

In terms of current trading, Pets at Home said the wider pet care market remains resilient and in growth; new customer acquisition is strong, with registrations into the retailer’s Puppy & Kitten club accelerating throughout H1 and customer spend maintained across the group.

However, the retailer said the ongoing “inflationary environment creates pressures for both our customers and the business. We are conscious of the challenges faced by many consumers, and continue to prioritise making pet care as convenient and affordable as possible. We will never let price be a reason not to shop with us.”

Chief executive Lyssa McGowan said: “In my first six months as CEO, I have spent my time forming a deep understanding of the business and sector, learning from the ground up how the business operates. I am more convinced that Pets at Home is well positioned to capitalise on an attractive growth opportunity in our structurally growing pet care market, supported by our unique blend of products and services, deeply embedded culture and expert, passionate colleagues, and partners.

“Our first-half performance shows progress and resilience across the business. In a challenging macro-environment, the pet care industry remains in growth across all channels, and we have continued to acquire new customers at an impressive rate, setting new records for customer numbers in recent months.” 

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