Pets at Home Group PLC (LSE:PETS) dropped close to 3% on Tuesday after it issued a profit warning in its third-quarter update on Tuesday.
Profits before tax estimates for the full year dropped from £136 million to £132 million due to a weaker performance from its retail division.
Retail sales during the third quarter lifted by 3.5% year on year, behind management’s expectations, largely due to soft trading of its accessories and a faster-than-expected slowdown of inflation.
Revenues from this channel in the fourth quarter have been predicted to remain flat year-on-year, as the group faces “exceptionally strong” comparatives.
However, management is confident in the prospect of its upcoming digital platform.
“Our new digital platform is a key foundation of our growth strategy, bringing vastly improved user experience to our consumers and creating opportunities to improve cross-sell into accessories and further grow share of wallet,” Lyssa McGowan, chief executive officer, said.
The pet retailer’s veterinary business is expected to trade in line with estimates, having seen growth of around 13.5% in the third quarter.
Management said the improved performance of its vet arm was from introducing more advanced procedures, increasing prices, consumer spend growing and the acquisition of additional vets.
It led to group revenue growth for the third quarter of 4.3% to £362.4 million.
McGowan added: “While a slower market over peak meant our sales growth didn't quite hit the levels we expected, the business remains well positioned to benefit from long term growth in the sector as we continue to win share and grow volumes across food and deliver differentiated performance through our unique vets business."