Pets at Home has announced that its profit expectations for the current financial year are "unchanged", despite seeing a drop in revenue in the third quarter.

In the 12 weeks to 2 January, the pet supplies retailer saw its total revenue drop by 0.2% year-on-year to £361.6m, with like-for-like (LFL) revenue falling by 1% in the same period.

Despite these drops, consumer revenue increased by 2.3% to £468m. Pets at Home stated that this increase in consumer revenue was supported by its vet group, which offset a "softer performance" within its retail business.

In this period, its vet group’s revenue increased by 21.3%, with a 19.9% jump in LFL sales.

Pets at Home said its practices had also seen double digit revenue growth, "supported by growth" in subscriptions, visits and average transaction values.

However, retail revenue dropped by 2.4% in Q3, with LFL sales dropping by 2.8%.

Investment director at AJ Bell, Russ Mould, said: "Britons love their pets but that doesn’t mean they aren’t prepared to economise on behalf of their furry and feathered friends. It’s clear Pets at Home is finding it tricky to get customers through the doors.

"Non-specialist retailers, including the supermarkets, will often be able to outcompete Pets at Home on price and people are also less likely at the moment to splash out on anything other than the essentials for their animal companions.

"The veterinary side of the business is coming to the rescue to some extent – with an increase in subscriptions providing the company with a steady stream of income."

Looking ahead, Pets at Home stated that its underlying profit before tax guidance is unchanged for the current financial year, remaining on track to deliver "modest growth" as set out in its first half results.

It added that "against a still subdued consumer backdrop", it has maintained a "disciplined gross margin performance", supported by strong Christmas seasonal sell through.

Despite this optimism, analysts have pointed towards potential bumps in the road that could affect the business going forward.

Mould concluded: "Pets at Home and others are nervously awaiting the outcome of a probe by the competition authorities into practices in the vet industry.

"This investigation could drag on until November, meaning Pets at Home may not get much credit for how the best performing part of its business is doing until after that deadline."

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