Shares in Pets at Home Group PLC (LSE:PETS) fell 8% in early trading after the company lowered its full-year profit guidance.
The retailer blamed subdued growth in the pet retail market, which it now expects to persist through the second half of its financial year. The company anticipates only modest profit growth for the year compared to previous expectations.
Going forward, October's Budget won't help with the retailer estimating that hikes to the Living Wage and Employers National Insurance would cost it £18 million annually from 2026.
Ominously, it said: "We will continue to proactively mitigate these cost increases where possible, including through our ongoing productivity programmes and investments in automation."
In its interim results for the 28 weeks ending October 10, Pets at Home reported revenue growth of 1.9% to £789.1 million, with strong performance in its veterinary business offsetting slower retail sales. Underlying profit grew by 14% to £54.5 million.
The stock was changing hands for 255.8p, down 21.2p.