(Bloomberg) -- Shares in Pets at Home Group Plc jumped after the UK retailer signaled that Britons are still willing to spend on their pets, despite rising household bills and living costs.
The stock gained as much 9% on Wednesday after the company said the pet care market continues to be robust, resulting in revenue for its fiscal year of £1.32 billion ($1.66 billion) and profit that beat estimates. The retailer, which named a new CEO earlier this year, said it is well placed to continue to grow market share in the near and long term.
“Anecdotal evidence suggests that over 90% of VIP customers are not intending to reduce their level of pet spend,” the company said in a statement, referring to its membership club for pet owners. About one third of customers who are planning to cut spending would consider switching to one of Pets at Home’s own label products, the company added.
“We continue to believe risks to Pets at Home should be relatively low in a downturn and even on our recently reduced forecasts it is supported by a very healthy balance sheet,” Liberum analyst Anubhav Malhotra wrote in a note, reiterating a buy rating on the stock.
Pets at Home, which sells pet products both online and in its stores, soared 49% in 2020 as pandemic lockdowns spurred a boom in pet ownership. The shares are down 35% this year compared with a 15% decline for the FTSE 250 Index.
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