Pets at Home shares up 20% as pet ownership grows

Shares of Wilmslow-based pet and vet retailer Pets at Home Group Plc rose 20% on Friday after it published a trading update for the 16 weeks from March 27 to July 16, 2020, showing “exceptional momentum” amid “heightened demand for pet ownership, a good proxy for longer term growth …”

Pets at Home said total group revenue was down 1% for the period with a LFL (like-for-like) revenue decline of 13.5% over the initial eight weeks offset by LFL revenue growth of 12% over the subsequent eight weeks.

Revenues soared 71% at the firm’s “omnichannel” line — defined as “orders placed online at and in-store using our order-in-store service for both delivery to home and collection in-store, plus subscriptions to monthly flea & worm treatments …”

Pets at Home Group shares rose about 20% to around 310p to give the firm a current stock market value of around £1.5 billion. The shares have risen about 50% over the past 12 months.

In its outlook, Pets at Home said: “We have responded quickly and adapted well to changes in customer behaviour, and this has been reflected in momentum returning across all areas of the business ahead of our previous expectations.

“It remains difficult, however, to make a clear assessment of the near-term outlook and could be misleading, at this stage, to extrapolate our recent exceptional momentum across the rest of the year. 

“Increasing pet ownership helps drive the growth of our business and the market overall, but the uncertainties over the duration and ongoing impact of social distancing restrictions in the UK, risk of a second lockdown, as well as macro headwinds are all factors that mean we need to remain focused and agile over the coming months.

“We also recognise that costs relating directly to the impact of the pandemic will remain elevated, and that the current year’s business rates relief will not mitigate the estimated financial impact of COVID-19.”

Pets at Home Group CEO Peter Pritchard said: “In spite of the rapid, wide-ranging and devastating effects of the pandemic, we have remained open for our customers throughout the period and we are emerging as a stronger business.

“The inherent resilience in our pet care model and the underlying pet care market, as well as encouraging signs of increased pet ownership, all underpin our confidence in seizing the future and progressing specific, strategic priorities.

“The significant investment in our omni-channel business is a good example of this, representing an important milestone, not just for our business and customers, but also as part of our commitment to longer term regional job creation and retention. 

“While much has changed, and continues to do so, we remain confident in the long-term sustainability of our pet care business, where the love of pets and the role that they play in our lives is only increasing.”