Pets at Home Shares Tumble, Expects Lower FY26 Profit

The share price of Pets at Home (LON: PETS) fell sharply on Monday after the UK’s largest pet care retailer warned that its profit for the next financial year would decline. 

The company now expects underlying profit before tax (PBT) for FY26 to be between £115 million and £125 million, down from the £133 million forecast for FY25.

It cited ongoing economic uncertainty, subdued consumer demand, and rising costs as key challenges. 

Pets at Home shares are down more than 14% in early Monday trading, priced around the 201.6p mark.

Pets at Home expects inflationary pressures, including increases in the National Living Wage and new packaging regulations, to increase costs.

“We are facing cost increases including the externally imposed headwinds of NLW/NICs (c£18m impact) and new packaging regulations (£2m), the rebuild of variable pay (c£10m) and we are investing a further £3m in marketing costs to drive sales,” the company stated.

Retail PBT is anticipated to decline year on year, despite cost-saving measures and productivity initiatives aimed at limiting operating cost growth to 5%.

Despite these headwinds, Pets at Home highlighted progress in its strategic transformation. The company completed its network optimisation and transitioned online sales to a single distribution centre, while also launching a new digital platform that has driven strong subscription growth.

“We remain highly cash generative and committed to our ordinary dividend,” the company said in a statement, noting that capital expenditure will return to normalised levels below £50 million in FY26.

Pets at Home’s Vet Group, now contributing over half of group profits, is expected to continue growing, with at least 10 new practices and 15 extensions planned for FY26. 

However, the company acknowledged the backdrop remains challenging, with subdued retail market growth expected to persist.

Pets at Home will release its full-year results on 28 May 2025.