Pets At Home trims outlook after softer demand for accessories

By Radhika Anilkumar

(Reuters) -UK retailer Pets At Home trimmed its annual profit forecast on Tuesday after weakness in third-quarter demand for pet accessories such as collars and bedding.

It now expects underlying profit before tax of about 132 million pounds ($167.5 million), down from a previous target of about 136 million, said the company, which has more than 450 pet care centres across the UK and offers grooming and veterinary services.

“That (core accessories) is where we’re seeing customers just stretch out their spend maybe go another few months without replacing,” CEO Lyssa McGowan said in an interview.

The company posted 3.7% rise in third-quarter retail revenue with its vet business up 13.3% on a like-for-like basis.

Its shares fell as much as 6% in early trade before paring losses. They were down 1.3% at 289.2 pence as of 0915 GMT.

“Pet owners are continuing to shy away from buying more lucrative, but less essential, extras,” Sophie Lund-Yates equity analyst at Hargreaves Lansdown wrote in a note citing cost-of-living pressures.

In May, the company said it was investing in a new distribution centre and a digital platform.

The third quarter could have absorbed the softer trends in accessories had it not been coupled with that investment, McGowan noted.

Pets At Home sources mostly from the UK and Europe with some accessories coming from Hong Kong and said it did not expect attacks on Red Sea shipping to impact its shelves.

Seasonal lines such as Valentines Day pet food and accessories are already in stores and stock for Easter has already reached its warehouse, McGowan added.

($1 = 0.7883 pounds)

(Reporting by Radhika Anilkumar in Bengaluru; editing by Dhanya Ann Thoppil and Jason Neely)