Pets at Home warns of challenging retail environment but says digital and vets are paying off

Pets at Home says economic headwinds will likely weaken earnings in its next fiscal year, although investment and streamlining should still mean growth.

Although it expects to meet the £133 million ($172M/€159M) profit before tax (PBT) for FY25 that it has previously projected, it highlighted the volatility of the consumer backdrop but also noted that it had grown its subscription Pets Club to record high numbers and recruited more veterinary staff. FY2025 results are due at the end of May.

Shares tumble

The UK retailer issued a pre-close statement on 31 March that rattled investors, with its shares losing more than 11% in early trading, as it says PBT for FY2026 could be off by £115 million ($149M/€137M) to £125 million ($162M/€149M) compared to FY2025.

It blamed current economic conditions and a subdued consumer backdrop while noting that the trajectory for the UK economy and inflation was uncertain. It also highlighted the additional costs, including a rise in employers’ national insurance contributions from April, which would add £18 million ($23M/€22M) to its wage bill.

While the firm expects its retail operation to show a year-over-year decline in PBT despite keeping costs under tight control, it believes it will outperform the market thanks to investment in its digital channels.

Vets business

Pets at Home expects a brighter FY2026 for its veterinary services division, which now accounts for more than half of its PBT thanks to stellar performance in the past 2 years.

The company says the rollout of veterinary practices will accelerate, with at least 10 planned for FY2026 and 15 more in the pipeline.

The UK’s veterinary services industry is the subject of an ongoing investigation by the Competition and Markets Authority (CMA) to identify whether veterinary businesses, large and small, are providing pet owners with a good choice of reasonably priced services.

In the most recent update on 21 March, the CMA’s inquiry chair acknowledged the strong response to its consultation but said the authority had yet to form provisional conclusions.

It had been hoped that the inquiry would be completed by May 2025, but Pets at Home expects it to be sometime in the summer before this happens.