Shares in Pets at Home (PETS) have scurried 37% higher year-to-date amid a wider retail sector rally off recent lows with household incomes holding up better than feared.

But the real catalyst for Pets at Home was the delivery of another earnings upgrade on 31 January, where the UK’s clear pet care leader raised full year profit guidance after reporting strong sales for the third quarter including Christmas, despite the cost-of-living pressures facing customers.

With robust trading momentum continuing in the fourth quarter, Pets at Home expects underlying pre-tax profit for the year to March 2023 will be towards the upper end of the £126 million to £136 million consensus range, exceeding previous guidance of £131 million.

While Pets at Home benefited from a big increase in the UK’s pet population during lockdown, unlike other pandemic fads, this involved a long-term commitment on the part of owners. Positive trading trends at Pets at Home also show new CEO Lyssa McGowan is doing a good job of filling the big shoes of predecessor Peter Pritchard, who led a successful turnaround of the business.

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