Latest figures from Pets at Home suggest consumers are still willing to spend more on their dogs and cats despite the cost of living crisis.
Having already benefitted from the jump in pet ownership during the pandemic, the retailer’s total sales rose 6.5% to £774.2m, driven by a 19.0% rise in its Vet division.
Revenue in its Retail unit grew 5.2% on both a total and like-for-like basis. However, the group noted that the business was impacted by short-term availability issues at a new distribution centre, with like-for-like growth of 7.1% in the first quarter, slowing to just 2.7% in the second.
Meanwhile, underlying pre-tax profit slid 19.3% to £47.8m, impacted by further investment in the business with higher logistics costs (c£8m) and a brand relaunch (c£2m).
Lyssa McGowan, Chief Executive of Pets at Home, said: “H1 has been a critical period in laying the foundations of our platform for future growth. This was the period of high activity when we relaunched our brand, launched our new DC, built our new digital platform, and made progress expanding and improving our physical assets across retail and vets.
“This period has not been without challenges, but we have been able to manage these well and are on track to finish FY24 with a refreshed, modernised infrastructure, fit to deliver growth for many years to come.”
The group revealed that the early weeks of its current quarter had started well. Its new DC is now servicing all its stores, with availability recovered and sales momentum improving. Retail LFL growth was around 4%, with “encouraging signs” following record Halloween trading and good initial sell-through of its Christmas ranges.
Pets at Home stated that it remains on track to deliver a full-year group underlying pre-tax profit of around £136m, which is in line with analyst consensus.
McGowan concluded: “As we stand today, through our point of peak investment, with the benefits of our new distribution centre and new digital platform still ahead of us, we look to the future with confidence that we can deliver our plan, to build the world’s best pet care platform.”
