Pets at Home share price jumps as it shakes off flea problem
Pets at Home shares have risen by five per cent in early morning trading as the retailer put a bad flea season behind it and expanded with seven new superstores across the UK.
The FTSE 250 pet products and services retailer said like-for-like sales rose by 2.2 per cent in the third quarter to 31 December. That compared with 1.8 per cent growth in the first half of the year, when the cold weather held back the need for anti-flea treatments.
Merchandise like-for-like sales increased by 1.7 per cent, driven by a rise in health-conscious customers buying advanced nutrition products for their pets. Pets at Home’s vet and grooming services also performed well, up by 8.5 per cent.
Total revenues grew by six per cent to £404.5m and the group said it was still on track to hit full-year targets.
The retailer, which floated in 2014, has grown to 413 stores across the UK with 205 grooming salons as well as 359 veterinary practices, run mainly as joint ventures. It wants to grow to 500 stores, with up to 25 Pets at Home stores, five Barkers, 55 vet practices and 60 grooming salons due to open in 2016.
In December, the company launched a trial convenience store concept in Dorking called Whiskers 'n Paws, targeting high street shoppers. Seven new superstores also open in the quarter, as well as a fourth high-end dog specialist store called Barkers.
“One of the things we have learnt from trips to the US is we need to innovate on formats,” chief executive Nick Wood said, adding that the popularity of services such as grooming and advanced nutrition products showed there is still plenty of potential for growth yet in the UK.
“Advanced nutrition is 25 per cent of total pet food market in the US whereas here it is 11 per cent. And if you reflect that in the UK four in 100 dogs get professionally groomed compared with one in 10 in the US – there is a lot of room to grow,” Wood told Morning Wire
Pets at Home’s loyalty scheme, VIP club, has over 4.2m members after adding 250,000 in the quarter, with 64 per cent of store sales are now covered by the loyalty card compared with 61 per cent last year.