Pets at Home expected to increase profits but supply chain costs rise
Pets at Home continued to enjoy strong growth thanks to the boom in pet ownership during the pandemic, revealing that profits are expected to beat expectations.
Bosses said sales reached £319.4million in the 12 weeks to December 30, a jump of 5.8% from the same period a year ago.
Its retail business saw particularly strong growth ahead of Christmas, up 9.8% as customers turned to more premium brands to pamper their pets.
The company’s veterinary business saw sales increase by 4%.
But the company warned that inflationary pressures hitting the economy are starting to take hold, with supply chain costs rising.
The retailer said this included targeting rent reductions, procurement savings and “operational efficiencies”.
Despite cost pressures, bosses are confident that underlying pre-tax profits will beat expectations, coming in at at least £140m.
Pets at Home’s VIP loyalty program has seen strong growth, up 13% year-on-year to seven million members, with more than one in four making purchases in-store and online.
Membership levels at his club for puppies and kittens have jumped 60%, with 24,000 new members signing up every week, and bosses have pointed out that members typically spend a third more than non-group members.
However, less growth was seen in the company’s First Opinion veterinary practices, with new client registrations at 9,200 per week, compared to 9,000 in the same period a year ago.
Chief Executive Peter Pritchard said, “Our unique, omnichannel pet care strategy continues to deliver strong revenue growth, reflecting continued momentum in customer acquisition, engagement and spending, as benefits of our continued investment in capability and capabilities are really starting to materialize.
The boss announced his retirement from the company in November last year; however, there has been no update from the company on who will succeed him when he retires this summer.
Pets at Home said: “The search for his successor is well advanced and a further announcement will be made in due course.”