Pets at Home announced its profit had fallen in line with expectations in its performance update, but warned of the struggles ahead.
The group said profit before tax for the year was expected to be £133m, which met previous guidance.
It added trends in the final quarter of the year had developed broadly as expected across its Retail and Vets arms, despite a “challenging and volatile UK consumer backdrop”.
The firm boasted record numbers of its Pets Club members and continued growth of its Vets business.
It said it expects to finish the full 2025 financial year in a net cash position, following the return of around £85m to investors throughout the year.
In the last year, Pets at Home completed its new digital platform and network optimisation.
Following the introduction of the new platform, the company said it now has two “major strategic programs” designed to help the business to return to growth in the next year.
Looking forward, the group said it expected the current market conditions and consumer backdrop to continue into the new financial year.
But, it anticipated further growth in profit following on from “exceptional levels” delivered in the past two financial years.
In its Retail arm, the group said it expects to outperform the market as its investments in digital bear fruit.
However, the company added that it will take a hit of £18m due to increased employers’ national insurance contributions.
Due to higher costs, it said it expected profit for the 2026 financial year to decline to around £115m to £125m.
David Hughes, analyst at Shore Capital, said: “The continued decline in the Retail arm is likely a cause for concern for investors, however the ongoing growth in the higher margin Vet business is encouraging and if the business does gain market share, it does have the potential to emerge stronger as and when the consumer does recover.”
Pets at Home’s next scheduled update is pencilled in for May 28, where it will post its full results for the 2025 financial year.