Pets at Home Group (PETS) H1 2026 earnings summary

Executive summary

• Group consumer revenue grew 0.7% to £1.06bn, but group profit fell 33% to £36.2m, mainly due to retail underperformance, while the Vet Group delivered strong growth and now represents the majority of group profits and cash flow.

• Retail business faced significant challenges, including subdued consumer confidence, lagging innovation, slow adaptation to trends, and execution issues, prompting a turnaround plan focused on product, price, execution, and cost.

• The Vet Group, leveraging a joint venture model, grew revenue by 6.7% and profits by 8.3%, underpinned by sector-leading capabilities and continued expansion.

• Strategic priorities include resetting product ranges, improving pricing competitiveness, enhancing execution, and reducing support office costs by £20m by FY 2027.

• Search for a new CEO is underway, but leadership remains focused on addressing current challenges.

Financial highlights

• Group profit declined by 33% year-over-year to £36.2m, with retail profits at £3.5m and Vet Group profits at £44.9m.

• Group consumer revenue reached £1.06bn, up 0.7% year-over-year; retail revenue declined 2.3% to £680m, Vet Group revenue grew 6.7% to £376m.

• Group cash flow/free cash flow increased 2.6% to £34m, underpinned by Vet Group cash generation of £54m.

• Group gross margin declined by 80bps to 45.5%, with retail down 105bps and Vet Group up 29bps.

• Online sales grew double digits, now representing 20% of retail sales, with 30% of online orders collected in-store.

Outlook and guidance

• Full-year underlying PBT expected to be £90–100m, with guidance reconfirmed and Vet Group expected to deliver PBT over £80m.

• Retail turnaround plan is gaining traction, with sequential improvement in retail performance and further benefits expected as initiatives roll out.

• Insurance launch on track for 2026, with expected FY26 losses of £5m.

• Full-year tax rate expected at 27-28%; net debt to finish the year around £25m.