PetMed Express (NASDAQ:PETS) Announces Quarterly Earnings Results, Misses Expectations By $0.20 EPS

PetMed Express (NASDAQ:PETS) issued its quarterly earnings results on Tuesday. The company reported ($0.31) earnings per share for the quarter, missing analysts’ consensus estimates of ($0.11) by ($0.20), FiscalAI reports. The business had revenue of $35.77 million for the quarter, compared to analyst estimates of $62.00 million. PetMed Express had a negative return on equity of 96.35% and a negative net margin of 16.97%. During the same quarter in the prior year, the company earned $0.11 EPS.

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 Price Performance

Shares of PETS stock traded down $0.01 during mid-day trading on Thursday, hitting $1.06. The stock had a trading volume of 14,483 shares, compared to its average volume of 277,432. The firm has a market cap of $22.89 million, a PE ratio of -0.83 and a beta of 0.82. The company’s 50-day simple moving average is $1.39 and its 200-day simple moving average is $2.04. PetMed Express has a fifty-two week low of $1.06 and a fifty-two week high of $4.10.

Analyst Ratings Changes

Several equities research analysts have recently weighed in on PETS shares. Wall Street Zen downgraded shares of PetMed Express from a “hold” rating to a “sell” rating in a research note on Saturday, August 15th. Weiss Ratings cut PetMed Express from a “sell (d-)” rating to a “sell (e+)” rating in a research report on Monday. Zacks Research downgraded PetMed Express from a “hold” rating to a “strong sell” rating in a research note on Friday, September 25th. Finally, Morgan Stanley dropped their target price on PetMed Express from $2.15 to $1.40 and set an “underweight” rating on the stock in a report on Friday, September 25th. Three equities research analysts have rated the stock with a Sell rating. According to MarketBeat, the company has an average rating of “Strong Sell” and an average target price of $1.40.

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.