Price cuts at Pets at Home have helped to drive a revival in volumes for the troubled chain, while contributing to a 1.1% decline in retail revenue, according to a trading update issued this morning.
Despite 5% growth in its veterinary division revenue, statutory revenue for the group declined 1% to £358m in the 12 weeks to 1 January 2026, as like-for-like revenue fell by 0.7%. Retail transactions were “broadly flat” in the quarter.
The chain’s performance has been propped up by its expanding and increasingly subscription-based vet business – 15% of consumer revenue in the year to date has come from subscriptions, up from 12.1% in the same period in 2025 – and including joint venture pet practices group revenues rose 0.8% to £472m.
Falling “within the range of [its] expectations”, the company’s Q3 performance has kept it on course for full-year profits in line with market consensus estimates of around £90m-97m.
“I’m pleased to report continued strong performance in our vet business and sequential improvement in retail, as we continue to implement our retail turnaround plan,” said Pets at Home interim executive chair Ian Burke.
“One of our key early actions as part of this plan included investing in our customer offer, reducing the price of over 1,000 products by an average of 12%, ensuring our customers know they can trust us to provide great value for them and their pets.”
Burke took the reins at the chain in September 2025, when the company ousted ex-CEO Lyssa McGowan at the same time as it issued a surprise profit warning. Former Waitrose MD James Bailey is set to join as the company’s new CEO on 30 March, just a few days after former PZ Cussons CFO Sarah Pollard joins to head up the company’s finances.
“With a new CEO and CFO joining in spring, our focus for the remainder of the year is on building momentum behind our four turnaround plan priorities of price, product, cost and execution, to deliver our FY26 plan and to return our retail business to sustainable sales and profit growth,” added Burke.
Panmure Liberum analyst Ben Hunt saw room for optimism in the group’s recovering retail volumes.
”Pricing actions are beginning to take effect in the food and accessories categories, where performance is starting to improve, while the vets business continues to deliver solid momentum.
”Full-year profit guidance has been maintained, implying that H2 profits will decline meaningfully year on year; however, some relief is warranted that expectations have not been further downgraded,” he said.
”A new CEO and CFO are due to join in the spring, and investors will be watching closely to see what actions they implement. There is a risk that management may seek to address lacklustre market share performance and reduced profitability, potentially leading to further strategic or operational change. That said, the free cash flow yield remains supportive for a business still in the early stages of a turnaround.”
RBC analyst Manjari Dhar, however, noted there was “greater value elsewhere in UK retail” for investors than in Pets at Home.
“Pets at Home’s retail business has been underperforming for some time now, in part due to a tough backdrop, with labour cost headwind, and also due to a lack of investment in the store proposition,” she said.
“Pets has implemented turnaround actions, including investment in the proposition, but we note that it may take some time for this business to return to growth.”
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