Pets at Home maintains FY26 profit outlook and shifts capital returns toward buybacks

Pets at Home (LSE:PETS) expects underlying profit before tax for the 2026 financial year to come in at around £92m, in line with previous guidance. The performance reflects improving trading momentum in the second half, as the company’s retail turnaround strategy begins to deliver stronger volumes and like-for-like sales growth.

The group’s Vet Group division also continued to perform well, generating strong profit growth supported by rising transaction values and expanding revenues from its Care Plan subscription services. This performance has helped underpin overall earnings stability across the business.

Pets at Home expects to finish the year with net debt of roughly £20m after returning about £85m to shareholders. As part of a shift in its capital allocation strategy, the company plans to reduce its dividend payout ratio to 50% while increasing the scale of share buybacks, signalling a greater emphasis on repurchasing shares as a method of returning capital.

The company also welcomed the competition watchdog’s final report on the veterinary services market and said it remains comfortable with current market expectations for profit in 2027. Management added that significant hedging of energy and foreign exchange costs should help protect margins in the near term.

Overall, Pets at Home’s outlook is supported by solid financial performance, an attractive valuation and a relatively high dividend yield. The expanded share buyback programme represents a positive corporate development, although recent challenges in the retail segment and a prior profit warning highlight potential risks.

More about Pets at Home

Pets at Home Group Plc is the UK’s largest integrated pet care provider, combining retail, veterinary and grooming services. The company sells pet food, accessories and other products online and through a network of more than 450 pet care centres across the UK. Many of these locations host veterinary practices and grooming salons, while the group also operates more than 450 small-animal veterinary practices in both in-store and standalone sites.