Pets at Home Faces Rough Patch as Profits Set to Tumble
A shock wave hit investors in Pets at Home on 31 March 2025. The company’s stock price plunged 13% in a single trading session, settling at around 205p and wiping out all of this year’s gains. This wasn’t just a case of market jitters. The company had just laid out a profit warning for the year ahead that sparked a sell-off — and for many, it was the latest blow in a four-year battle with falling shares.
Pushed up by the pandemic boom in pet ownership, many might have expected smooth sailing for the UK’s biggest chain of pet stores and clinics. But now the gloss is wearing off. Pets at Home’s latest figures show pre-tax profit for the year ending March 2025 will land at £133 million, right on target with what analysts had guessed. The problem is what’s coming next. The company is warning that for the 2026 financial year, profits could slip by as much as 13%, down to somewhere between £115 million and £125 million. That’s a lot worse than many were hoping for, and well below most forecasts.
Why Are Profits Taking a Hit?
There’s pressure coming from all sides. First up, the retail side of the business isn’t having an easy time. Customer spending is sluggish right now, and the company admits the retail environment is tough. People are tightening their belts, and even Brits’ famous love of their pets isn’t enough to fully shield sales from wider economic gloom. The company runs over 450 stores across the UK, along with grooming services and veterinary clinics under the Vets4Pets brand. But the retail side isn’t the main profit driver anymore — it’s the vet business that now brings in more than half of the group’s profits.
Then there are the cost increases weighing heavily on the bottom line. The latest rise in the UK’s National Living Wage and changes to National Insurance are adding about £18 million to the company’s outgoings next year. It doesn’t stop there. New government rules around packaging are set to cost an extra £2 million. And because Pets at Home had to cut back on variable pay for workers during tougher times, they’re now having to beef it up again, with another £10 million earmarked to get things back on track. Marketing spend is also increasing by £3 million as the company tries to boost sales and keep loyalty high in an increasingly crowded market.
The company’s response? They’re determined to keep a lid on operating costs, aiming to keep growth to just 5% through various efficiency measures. But that’s going to be a tricky balancing act when so many of their increased costs are out of their control. With the retail landscape still uncertain, Pets at Home’s margins are under real pressure.
It’s not just a bad news story, though. Despite four years of their share price sliding by nearly half — and ending the day 20% lower than this time last year, at 208.4p — Pets at Home is still the UK’s top name in pet care. The network of stores, grooming, and veterinary clinics puts them in a strong position, and many pet owners have come to see them as their go-to for everything animal-related. But investors are now asking hard questions about whether the group can adapt quickly enough to keep up with rising costs, changing shopping habits, and an economy that’s tough on both consumers and businesses. For now, at least, the stock market isn’t betting on a quick turnaround.
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