PetMed Express (NASDAQ:PETS – Get Free Report) issued its quarterly earnings data on Tuesday. The company reported ($0.31) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.11) by ($0.20), FiscalAI reports. The company had revenue of $35.77 million for the quarter, compared to analysts’ expectations of $62.00 million. PetMed Express had a negative net margin of 17.34% and a negative return on equity of 91.69%. During the same quarter last year, the company earned $0.11 earnings per share.
Here are the key takeaways from PetMed Express’ conference call:
- Second-quarter sales fell 19.4% year over year to $35.8 million, primarily due to declining prescription medication sales and higher promotional usage. Gross profit declined to $9.8 million, with gross margin slipping to 27.4% amid unfavorable product mix and lower manufacturer rebates.
- The net loss narrowed to $6.4 million from $8.5 million a year ago, helped by lower administrative and advertising costs, but adjusted EBITDA worsened to a $3.6 million loss from a $2.3 million loss. The company had $11.4 million in cash and no debt at quarter-end.
- Customer acquisition costs fell to $51, down 32% year over year and 15% from the prior quarter; PetMeds acquired 41,000 new customers. Management said it sees further opportunities to improve marketing efficiency and customer retention.
- New CEO Jeff Willard is prioritizing a turnaround of the core online pharmacy through brand repositioning, a simpler website checkout, a more curated non-pharmacy assortment, and greater emphasis on generics. He described rebuilding customer relationships as a multi-year effort and aims to make the business profitable at its current size before growing.
- PetMeds has expanded its white-label pharmacy partnerships, adding Pet Supermarket after launching with Rural King in July. Management sees these partnerships as another way to reach pet owners and extend the pharmacy platform.
PetMed Express Stock Performance
PETS stock traded down $0.04 during midday trading on Tuesday, reaching $1.21. The company’s stock had a trading volume of 123,067 shares, compared to its average volume of 278,057. The stock has a fifty day simple moving average of $1.41 and a two-hundred day simple moving average of $2.06. PetMed Express has a 1 year low of $1.15 and a 1 year high of $4.10. The firm has a market capitalization of $26.23 million, a price-to-earnings ratio of -0.88 and a beta of 0.82.
Wall Street Analysts Forecast Growth
A number of brokerages have recently commented on PETS. Wall Street Zen cut PetMed Express from a “hold” rating to a “sell” rating in a report on Saturday, August 15th. Weiss Ratings lowered PetMed Express from a “sell (d-)” rating to a “sell (e+)” rating in a report on Monday. Morgan Stanley decreased their price target on PetMed Express from $2.15 to $1.40 and set an “underweight” rating on the stock in a report on Friday, September 25th. Finally, Zacks Research downgraded PetMed Express from a “hold” rating to a “strong sell” rating in a research report on Friday, September 25th. Three research analysts have rated the stock with a Sell rating. According to data from MarketBeat, the company currently has an average rating of “Strong Sell” and an average target price of $1.40.
Get Our Latest Stock Analysis on PETS
PetMed Express Company Profile
PetMed Express, Inc., doing business as PetMeds, is an online retailer of prescription and nonprescription medications and health products for dogs, cats and other household pets. The company offers products used to treat or prevent conditions such as allergies, infections, parasites and chronic illnesses, including prescription medicines, flea and tick treatments, heartworm preventatives, supplements and other animal-health products. In addition to medications, PetMeds sells pet food, treats, vitamins, wellness products and selected supplies.
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