Specialist pet retailer Pets at Home Group reported total revenue growth of 6% in today’s FY16 trading update. While full year profit outlook is "broadly in line with expectations," Q2's performance is not what investors hoped it would be.
For the 28 week period ending 8 October 2015, total revenue growth grew to £404.5m for the Handforth headquartered company. Like for like sales increased by 1.8%, down from 4.2% the previous year. Growth was driven largely by increasing strength in Advanced Nutrition, VIP Club, Services and Omni-channel. Meanwhile, merchandise revenue increased by 4.2% to £362.6mn.
Pets at Home continued to expand across the UK with the opening of six superstores and two Barkers stores, as well as a large number of salons and veterinary practices, in line with the FY16 rollout targets.
“We remain pleased with the growth of advanced nutrition, vet and grooming services during the first half of the financial year, supported by growth maturity in the VIP loyalty scheme,” said Pets at Home CEO Nick Wood.
Growth was offset by continued seasonal challenges to Health & Hygiene products, as well as evolution in mix in selected grocery and accessories categories.
“Whilst trading in parts of the business has been weaker than expected, the core strategic drivers are performing well and in order to support their growth, we continue to invest in our colleagues and seamless shopping experience,” Wood added. “As we highlighted previously, profit growth will be weighted to the second half, as the strong Health & Hygiene comparatives ease. Our full year profit outlook is broadly in line with market expectations.”