UK's Pets At Home lifts profit view as dog owners splurge on toys

Outbreak of the coronavirus disease (COVID-19) in Milton Keynes
A pet groomer tends to a dog at The Groom Room, at pets at home in Milton Keynes, following the outbreak of the coronavirus disease (COVID-19), Milton Keynes, Britain, June 8, 2020. REUTERS/Andrew Boyers/
  • Sees annual profit towards upper-end of 126 mln-136 mln stg
  • Q3 vet business segment revenue rose 18%
  • Shares up as much as 13%

Jan 31 (Reuters) - Britain's Pets At Home (PETSP.L) raised its full-year profit forecast on Tuesday after customers splurged on toys, accessories and treats for their four-legged companions this Christmas, sending the company's shares soaring as much as 13%.

Dog owners were the big spenders, buying over half a million treats including Christmas tarts over the period, the pet retailer said.

The company, which has physical stores and an online presence, ramped up its online offering and banked on subscriptions for regularly-used items to rake in record profits when work-from-home policies during lockdowns spurred pet demand in Britain.

"It was particularly pleasing to see our accessories category return to growth, supported by the strong performance in our Christmas range, demonstrating that consumers still want to treat their beloved pets in these challenging times," Chief Executive Officer Lyssa McGowan said.

Britain's largest pet supplies retailer, which also offers grooming and veterinary services, said revenue from its vet business rose 18% and its retail revenue was up 7.6%, on a like-for-like basis, in the third quarter.

Shares of the company were trading 10.5% up on the day at 366 pence by 0925 GMT.

"Pets at Home is purring away nicely and its strong revenue growth across both retail and veterinary services in the third quarter reflects the fact that its target market is simply much bigger following the pandemic," Mark Crouch, analyst at social investing network eToro said in a note.

British retailers who performed better than expected this Christmas period, however warned that most customers would tighten their belts in 2023.

Pets At Home, founded by British businessman Anthony Preston in 1991, said freight container rates continued to move favourably but warned of a challenging inflationary environment.

The company now expects its annual underlying profit before tax to be towards the upper-end of a current consensus range of 126 million to 136 million pounds ($155 million-$168 million), from its previous outlook of 131 million pounds.

($1 = 0.8115 pounds)

Reporting by Radhika Anilkumar in Bengaluru; Editing by Sherry Jacob-Phillips and Emelia Sithole-Matarise

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