July 31, 2020 / 7:12 AM / 5 days ago

Pets At Home first-quarter sales drop less than feared

(Reuters) - Pets At Home (PETSP.L) posted a 1% fall in first-quarter revenue on Friday while saying it ended the quarter ahead of expectations as people seeking animal company in coronavirus lockdowns offset the impact of fewer owners going to the vet.

The British pet supplies company said that active VIP members grew 20.3% in the quarter and retail revenue rose, helped by strong merchandise sales.

Shares were up 6.7% at 275.8 pence by 0717 GMT.

The company said that while group like-for-like revenue fell 13.5% in the first eight weeks, it made a strong recovery in the second-half of the quarter, jumping 12%.

“It has...been encouraging to see tangible signs of heightened demand for pet ownership, a good proxy for longer term growth in the market, as people adopt new attitudes to work and leisure pursuits,” the company said.

The company, which has 453 retail stores, said costs related to the pandemic will remain high and that current year’s business rates relief will not mitigate the estimated financial impact of coronavirus.

It remains difficult to make a clear assessment of the near-term outlook, it said, adding that liquidity remains strong.

Vet revenue was down 10.9% for the 16 weeks ended July 16, reflecting the impact of restrictions on permitted procedures during the early stages of the pandemic, the company said.

Reporting by Tanishaa Nadkar in Bengaluru; Editing by Vinay Dwivedi

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