Shares in pet supplies and veterinary group Pets at Home LON:PETS have dropped nearly 15% to around 234 pence since the company reported results last week, with most analysts taking a hold or negative view on the company despite a strong growth in net income. This had more to do with Pets At Home providing a relatively cautious outlook for the rest of the year than its performance so far.
The headwinds facing the company are a UK Competition Markets Authority investigation into price opacity in the UK veterinary sector, including Pets At Home, and the cost of living crisis, affecting how much money particularly younger pet owners are able to spend. However wealthier owners are proving willing to splash out, not only on premium food but also grooming and premium veterinary care.
In the third quarter Pets At Home increased revenues by 1.92% to £394.55 million and managed to boost net income of by around 49% year-on-year to £18.8m. Net profit margin rose 45.57% to 4.76% and diluted earnings per share were up by 33.3% to 0.04.
Pets At Home’s vet growth strategy is promising,…
