Our long/buy idea on Pets at Home generated more than 10% returns for clients when British pet care business reported results that beat expectations.
On 22nd May 2019, Pets at Home shares surged more than 10% at the market open after the British pet care business reported revenues and profits that beat market expectations and upped their guidance for FY19. Management reported a 6.1% increase in underlying pre-tax profits and a 6.9% increase in revenues driven by a 5.7% rise in like-for-like sales for the period which surpassed fairly bearish expectations going into the print.
Several weeks prior to the official announcement, Woozle’s proprietary sources uncovered evidence of stronger than expected sales trends driven by improved foot traffic and average transaction value trends on better customer loyalty, positive traction from successful promotional activity, reduced price points on general merchandising, newly implemented customer service efforts, new ordering systems reducing surplus stock, and sales improvements across nutrition, grooming and live pet sales.
Our clients were able to initiate or scale their long position with enough time to capitalise on a more than 10% surge in the share price following results.