Pets at Home Profit Falls Amid Retail Weakness as Vet Division Supports Recovery Strategy (PETS)

Pets at Home (LSE:PETS) reported a difficult performance for FY26, with statutory revenue declining 0.8% to £1.47bn and statutory profit before tax falling 28.3% as weaker retail trading and lower group gross margins weighed on earnings. Underlying profit before tax dropped 30.2%, while free cash flow also declined, leading the company to reset its capital allocation strategy. The group has reduced its dividend payout while preserving balance sheet strength and authorising a new £50m share buyback programme.

The company continues to rely on the stronger performance of its Vet division, where consumer revenue increased 5% and underlying profit rose 10.4%, supported by growing subscription adoption and higher joint venture fee income. Pets at Home is continuing to expand its veterinary footprint through additional practices and extensions. Meanwhile, a Retail Turnaround Plan introduced during the second half of the year has begun to stabilise store trading, improve customer satisfaction metrics and return transaction volumes to growth. Management said the strategy centres on volume-led growth, targeted price investment and the planned launch of the company’s own pet insurance offering in 2026 as part of its broader integrated pet care model.

Pets at Home’s outlook remains supported by solid underlying financial performance and an attractive valuation profile, including a relatively high dividend yield. The ongoing share buyback programme is viewed positively, although weaker retail conditions and the recent profit warning continue to present operational risks.

More about Pets at Home

Pets at Home Group (LSE:PETS) is one of the UK’s leading pet care retailers, operating an omnichannel network of approximately 460 pet care centres alongside a rapidly expanding veterinary services business. The group provides pet food and accessories, grooming, veterinary care and subscription-based pet wellness plans, and is preparing to enter the pet insurance market as it targets continued growth in the expanding UK pet care sector.