Pets at Home has stated that its profit before tax is set to drop to between £115m-125m in the 2026 financial year, as it continues to operate in a "subdued consumer backdrop".

In the retailer’s pre-close statement, it reported that its profit before tax for the 2025 financial year is expected to reach £133m, which it said was "in line with previous guidance".

The update comes after Pets at Home lowered its profit expectations at the end of 2024.

The firm said that in the year to 27 March 2025, it expects to be in a net cash position, having returned £85m to investors in this period.

However, looking to the 2026 financial year, Pets at Home said it expects the "current market conditions and subdued consumer backdrop to continue".

This comes as business costs are set to increase through rises in the national living wage and employer national insurance contributions.

The firm added that it remains "highly cash generative" and will continue to deploy capital in line with its "established framework".

Investment director at AJ Bell, Russ Mould, commented: "Continued pressure on Pets at Home’s retail arm means investors were sick as the proverbial parrot with the company’s latest update, which included a damaging downgrade to profit guidance for the current financial year.

"Pets at Home still hopes to take market share thanks to investment in its digital platform and continued progress in getting customers to sign up to its loyalty scheme. It needs to generate some momentum with sales to mitigate the impact of rising costs associated with changes in last year’s Budget.

"The struggles on the retail side mean the company is increasingly leaning on its vet operation, which is performing strongly but is operating under somewhat of a cloud given an ongoing CMA probe into the sector."

Pets at Home will announce its 2025 full-year results on 28 May.

---