Headquartered at Delray Beach, Florida, PetMed Express (PETS, Financial) is America’s largest pet pharmacy. It offers a wide selection of products, including prescription and non-prescription pet medications and supplies for both dogs and cats. It is a licensed pharmacy that conducts its operations in 50 states.
Financial performance (second quarter)
Net income during the quarter was $8.8 million, versus $4.9 million in the prior year quarter.
Sales increased during the quarter and were $66.7 million, a 10% increase from $60.8 million.
Average order value increased to $85 during the quarter, versus $82 in the prior-year quarter.
New order sales increased by 9% from $10.7 million and were $11.6 million in the current quarter.
Gross profit as a percentage of sales increased to 35.2% during the quarter, compared to 29.7% in the prior year quarter.
The company had $68 million cash and cash equivalents as of Sept. 30, compared to $58 million in the prior-year period.
Gross profit during the quarter was around $23 million, which was $18 million in the prior-year quarter.
Six-month performance
Net income during the six month period was $18.0 million, or 88 cents diluted per share, compared to $11.5 million, or 56 cents diluted per share in the prior-year period.
Net sales also increased for the six-month period by 10% to $146.4 million, compared to $133.3 million in the prior-year period.
Known to return value to shareholders
During the fiscal year the company paid a quarterly dividend of 19 cents per share and has also upgraded the dividend to 20 cents per share for the first quarter of fiscal 2018.
Focus areas
- Building brand recognition.
- Increasing customer base.
- Maximizing reorders.
- Developing incremental revenue opportunities.
- Focus primarily on retail customers.
- Increasing sales.
- Improving service levels.
On a concluding note
2017 was a good year for this company as it made both top- and bottom-line progress. It is committed to return capital to the shareholders. The company has an integrated marketing campaign that includes online marketing, direct mail/print and e-mail.
It is an emerging company that has a good track record. It has gained investors’ confidence by delivering consistently and has a market capitalization of approximately $850 million. It boasts of a strong cash balance, too. There was a rise in operating expenses in the current quarter, which can be attributed to its focus on its campaigns, which again are an important factor driving the increase in sales. Its focus on advertising efficiency has already contributed to the boost in sales.
The U.S. has witnessed an increase in pet spending in recent years (a rise of around 10.7% to $66.9 billion in 2016, as per American Pet Products Manufacturers Association). The pet medication market is valued around $4.3 billion and is on the rise. This company holds tremendous potential in the near future. It has a broad customer base and has served around 9.5 million satisfied customers. Looking into its present performance, adding this company may reap shareholder returns.
Disclosure: I do not hold any position in the company.
