Pets at Home Group (PETS) H1 2025 earnings summary

Executive summary

• Delivered resilient performance and outperformed a subdued UK pet care market, with strong execution in both vet and retail segments and a 4% year-over-year consumer revenue growth.

• Continued to grow market share, with Pets Club members up 3% year-over-year to 8.1 million and average consumer value rising to £175.

• Advanced digital transformation, nearly doubling app sales and expanding subscription revenue to 12.4% of total.

• Significant investments in new distribution center, digital platform, store refits, and automation are largely complete, positioning for future growth.

• Strategic focus remains on building an integrated, omnichannel, consumer-centric platform to drive growth and shareholder value.

Financial highlights

• Group consumer revenue reached £1,048.6m (+4.1% YoY); Vet Group revenue up 18.6% to £92.8m; Retail revenue up 0.1% to £696.3m.

• Underlying PBT rose 14.1% to £54.5m; statutory PBT up 47.3% to £51.1m; EPS 7.9p (+52% YoY); interim dividend 4.7p (+4.4%).

• Free cash flow increased 43% to £33.1m; over £50m returned to shareholders via dividends and buybacks.

• Group gross margin flat at 46.3%; Vet Group margin up 97bps to 54.4%, Retail margin down 31bps to 45.2%.

• Costs in the first half were £205 million, down 3% year-over-year.

Outlook and guidance

• Guidance for the remainder of the year assumes no improvement in the subdued consumer market, with only modest profit growth expected.

• No expected change in normalization or inflation trends for the rest of the fiscal year; some unwinding anticipated in the spring of next year.

• Long-term outlook remains positive, with expectations for market growth to return to historic norms (~4%) and company targeting 300bps outperformance.

• FY26 cost headwinds of £18m anticipated from National Living Wage and NIC changes; mitigation efforts ongoing.

• Capex for FY25 expected at ~£55m, with focus on investment efficiency and productivity.