Pets at Home shares dogged by 'soft' sales

Shares in Pets at Home have fallen by 8% after the retailer reported "softer than anticipated" sales of pet food and accessories.

Third quarter like-for-like merchandise revenues at the Pets at Home, Barkers and Whiskers 'n Paws shops were down by 0.5%, although online grew "strongly".

However, overall like-for-like revenues were up by 0.1%, boosted by a strong performance in veterinary services.

One analyst described the results as "disappointing".

In the 12 weeks to 5 January total revenue for the group, including new store openings, was up by 4.4% to £203.7m

Total merchandise income was flat at £177.4m because "subdued" store sales were offset by the better online performance.

Total revenue from services rose by 47.8% to £26.3m, including joint venture vet practice fee income which was up by 26.2% to £9.5m.

The company said the profit outlook for the full year remained on track.

"With a quarter to go, our profit outlook for the year remains in line with expectations, reflecting both the continued investment in our customer offer and ongoing efficiency initiatives," said chief executive Ian Kellett.

Pets at Home has 429 stores in the UK and 411 veterinary practices. It would open 15-20 superstores, 45-55 vet practices and 50-60 grooming salons in the current financial year, it said.

However, Liberum analyst Wayne Brown said: "The material slowdown in merchandise reflects the challenges that remain in this division.

"The fact online growth has been strong yet like for like sales are negative in merchandise could be a signal of structural issues and a highly competitive market place," he added.