Pets at Home continues to benefit from the huge boom in pet ownership during the Covid-19 pandemic with bosses predicting profits will be up nearly 50% compared with a year ago.
The retailer revealed sales jumped 25.7% in the 16 weeks to July 15 to £377.8 million with customers trading up to more premium products and making use of the firm’s vet business.
Food and accessories sales were up both instore and online – despite the reopening of all non-essential retailers during the period.
Omnichannel sales – where customers order products online or in-store for collection – was up 21.4% compared with the same period a year ago – and has more than doubled on pre-pandemic levels.
In Pets at Home’s vet business, like-for-like sales were up 44.7% with the number of profitable practices increasing, the company said.
Inflation and the ongoing costs associated with the pandemic continued to put pressure on the business, and will take £9 million out of profits this year, it added.
But bosses said the soaring sales will more than offset the hit, with underlying pre-tax profits for the year expected to be £130 million – the top end of analyst expectations – and would be up 49% on the previous year.
Pets at Home enjoyed a strong period during the pandemic, with stores remaining open as an “essential” retailer.
A surge in pet ownership also helped the business, and bosses issued a series of profit upgrades throughout the year.
The company said: “The UK pet care market is robust, with the ongoing increase in pet ownership, combined with the prevailing trends of pet renewal, humanisation and premiumisation, creating a long-term tailwind for growth across both the underlying market and our business.”
But despite the impressive numbers, the City was not won over and shares tanked more than 4.5% by mid-morning.
Some analysts had hoped for another profit upgrade and warned that supply chain pressures could hit the business later in the year.
Jonathan Pritchard and John Stevens, retail analysts at Peel Hunt, also suggested the company’s valuation could be close to its peak.
They said: “In other words a brilliant company in a brilliant sector, but the shares now are interesting rather than exciting.”