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Pets At Home Group PLC on Tuesday reported lower profit in a half-year when it focused on transitioning stores to its new distribution centre in Stafford.
The Wilmslow, England-based pet supplies retailer said pretax profit declined 35% to £34.7 million in the 28 weeks to October 12 from £53.4 million a year prior.
Revenue rose 6.5% to £774.2 million from £727.2 million. Cost of sales increased 9.7% to £419.0 million from £382.1 million, while administrative expenses increased 9.6% to £248.6 million from £226.8 million.
The company maintained its interim dividend at 4.5 pence per share. It added that the first £25 million of its £50 million buyback programme has been completed, with the second £25 million tranche to start soon.
Pets At Home highlighted that it has transitioned its stores to the new Stafford distribution centre as it builds a new digital platform.
‘The first half saw us move our store logistics operations into our new Stafford DC. This was the period of highest risk in our move to a single DC and the DC is now fulfilling deliveries to 100% of stores, with
availability having now normalised. However, in getting to this position, we experienced a period of disruption during Q2. From the early part of Q2, we saw a deterioration in our in-store availability from normal levels of around 95%, to around 80% at peak disruption,’ the company said.
Chief Executive Lyssa McGowan said: ‘As we stand today, through our point of peak investment, with the benefits of our new distribution centre and new digital platform still ahead of us, we look to the future with confidence that we can deliver our plan, to build the world’s best pet care platform.’
For the current financial year 2024, Pets At Home expects consumer sales to grow in line with its medium-term goal of 7% and expects an underlying pretax profit of £136 million, in line with current analyst consensus and similar to financial 2023’s £136.4 million. The company’s last financial year ended on March 30.
Pets At Home shares were up 1.5% at 291.60 pence each on Tuesday morning in London.
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