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Pets at Home sales jump as COVID-19 drives sales

Cat hanging its head over the laptop screen, looking at the woman on the screen
People working at home during the pandemic has meant an increase in pet ownership, as people consider what they can do to improve their surroundings. Photo: Getty Images

Pets at Home (PETS.L) swung to a double digit revenue growth in its full-year 2021 interim results, driven by a boost in sales.

People working at home during the pandemic has meant an increase in pet ownership, as people consider what they can do to improve their surroundings.

“It’s no surprise in that respect. The number one reason people buy pets is for companionship, and so they’ve made a huge difference during the pandemic. For some people, the only reason they’re going out during lockdown is to walk their dog,” chief executive Peter Pritchard told BBC Radio 4’s Today Programme.

The FTSE 250-listed firm also noted its allocation as an “essential” retailer amid widespread COVID-19 lockdowns for its 12.5% like-for-like revenue growth in Q2, saying it had an “exceptional period of demand” during lockdown.

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Sales were bumped 4.1% in the six months to October, compared with the same period last year. Almost a third of sales were from the company’s pet care services.

READ MORE: European markets rejoice as Biden transition begins

Despite positive results, the retailer was the biggest faller on the FTSE 250 (^FTMC) this morning. Shares were down nearly 7% at 8.50am in London.

Chart: Yahoo Finance
Chart: Yahoo Finance

Analysts at Peel Hunt said in a note this morning: “Gross margin in retail was down by 144 bps due to the mix effect of more food: that is not a surprise. The PBT [profit before tax] outcome was broadly flat on last year.

“There is good news on current trading, which was not specified but we would imagine remains in double digits. The comp gets very tough in Q4, but management is adding roughly 10% to consensus today by saying PBT will match last year's at £93.5m [$125m]: we were on £85m, consensus was £86m.”

Looking to the future, the company said: “COVID-19 continues to create a number of material uncertainties around the near-term trading environment, from a potential escalation of current restrictions on a national level, to reversion to a tiered system of localised restrictions.”

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