(Reuters) -British retailer Pets At Home cut its annual profit forecast on Thursday as pet owners reduce spending on accessories and toys for their companions amid pressures on household finances.
Shares of the company, which also offers grooming and veterinary services, fell as much as 8%, and were down 4.9% at 232 pence at 1305 GMT.
Demand for pets has fallen in Britain after a pandemic-era surge, and owners are spending less on treats as economic uncertainty and sticky inflation pressure their budgets.
The company forecast underlying pre-tax profit of between 110 million pounds and 120 million pounds ($146 million-$159 million) for the year ending March 2026, down from its prior estimate of between 115 million and 125 million pounds.
Pets At Home said retail market growth was slower than it had expected in the first quarter of its financial year, and reaching the top end of its annual forecast would require an uptick.
British firms are struggling with rising labour costs, driven by higher social security contributions and minimum wage increases, fuelling concerns over potential price hikes and job cuts.
Analysts at Jefferies called Pets At Home’s profit downgrade “disappointing”, but noted encouraging signs such as improving trading trends, impressive growth from the veterinary division and smaller market share losses.
Like-for-like revenue growth in the company’s Vet unit rose 7.8% in the 16 weeks to July 17.
($1 = 0.7532 pounds)
(Reporting by Aatrayee Chatterjee in Bengaluru. Editing by Eileen Soreng and Mark Potter)
