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Investing.com -- Pets at Home Group PLC (LON:PETSP) on Thursday lowered its profit guidance for the fiscal year 2026 due to weaker-than-expected market conditions, despite showing signs of improving sales trends.
The pet supplies retailer reported first-quarter retail like-for-like sales declined by 3.0%, an improvement from the 5.5% drop seen in the fourth quarter of fiscal year 2025.
However, the company noted that the overall pet market showed no growth during the period, performing below initial expectations.
As a result, Pets at Home has reduced its fiscal 2026 market growth forecast from 2% to 1% and cut its profit guidance to £110-120 million from the previous range of £115-125 million.
Despite the downward revision, the company highlighted several positive developments, including sequential improvement in trading throughout the quarter, suggesting a stronger exit rate. Online sales returned to double-digit growth during the first quarter, and the company’s performance relative to the market improved, indicating narrowing market share losses toward the end of the period.
Management continues to expect Pets at Home to outperform the market over the full year, supported by online growth, benefits from its new platform and distribution center, increased Easy Repeat subscriptions, and weaker comparative figures from the previous year.
The company’s Vet Group division delivered customer-facing revenue growth of 7.1%, with like-for-like growth of 7.8%, in line with full-year guidance for high single-digit growth and ahead of industry benchmarks. The Vet Group’s performance continues to be driven by practice maturity, market share gains, and expansion plans that include adding 10 new practices and 15 practice extensions in fiscal 2026.
Jefferies analysts have lowered their fiscal 2026 profit before tax estimate by 5% from £121 million to £115 million, while maintaining a "Buy" rating with a price target of 330p, representing 36% upside potential from the current share price of 243.40p.