Pets at Home boss exits as profit warning deepens

Pets at Home plc said chief executive Lyssa McGowan has left the business with immediate effect, in a surprise leadership departure that coincides with a second profit warning of the year. Shares fell around 23% in early trading, erasing roughly £240 million from the group’s market value, and the board said a search for a successor is underway. The company added that the executive chairman will lead on an interim basis while the process runs.

McGowan, who joined the group in 2022 and was awarded an OBE in June for services to retail, led a business that operates Pets at Home stores, a veterinary division and grooming services. The retailer sells pets and pet products and runs clinics and grooming centres as part of a broader strategy to diversify beyond traditional retail. The latest update underscored a challenging environment as the pet market remained subdued. The company said sales at its stores were down around 5% year-to-date, while online sales rose by more than 10%, reflecting continued strength in e-commerce even as footfall waned. The shake-up at the top coincides with the firm downgrading its profit forecast and signaling a continued emphasis on expanding veterinary clinics as a growth driver.

On Thursday the group downgraded its guidance for the 2025-26 financial year to a pre-tax profit and amortisation of between £90 million and £100 million, from an earlier range of £110 million to £120 million. The revised target would be well below last year’s £133 million, reflecting weaker like-for-like trends and higher costs. Although the online channel has performed relatively well, the 5% fall in store sales offset much of the online growth and highlighted the challenge of translating online momentum into overall profitability.

The retailer said it still plans to open ten new vet practices during the financial year and to extend 15 existing sites, part of a broader push to diversify revenue beyond traditional retail. Chairman Ian Burke has assumed the role of executive chairman until a permanent chief executive is appointed. The board said: "The board would like to thank Lyssa McGowan for her commitment to leading the business since she became CEO in 2022."

Analysts stressed that the results reflect a tougher consumer environment and ongoing volatility in discretionary spending related to pets. Neil Wilson, UK investor strategist at Saxo Markets, said investors are “scolding this one like a naughty puppy that’s done its business where it oughtn’t” in response to the double profit warning. The company’s shares have traded under a cloud on concerns that growth in veterinary services may not offset weakness in core retail as the consumer backdrop remains challenging.

Pets at Home’s troubles come as it seeks to balance improved performance in online sales with persistent store-level softness. The company has been expanding its veterinary footprint and grooming services as a way to diversify revenue streams, while continuing to manage costs amid inflation and discounting pressures in the pet category. The leadership change adds to investor uncertainty as the board evaluates its long-term plan and seeks a permanent chief executive who can navigate a more fragile retail environment.

Weak performances in the first half of the year had already led to profit warnings earlier in the year; the latest downgrade deepens concerns about whether the retailer can sustain profitability while growing its veterinary and ancillary services. Market watchers will be watching for a clearer path to sustainable earnings, including any updates on the pace of new clinic openings and the integration of veterinary services with in-store commerce. The board’s decision to appoint an interim executive chairman signals a cautious approach as it begins a thorough search for a replacement.