PetMed Express, Inc. (PETS), America’s largest Pet Pharmacy, recently reported third-quarter fiscal 2010 results. The quarterly earnings of 25 cents a share were above the Zacks Consensus Estimate by 2 cents, and rose 19% year over year from 21 cents posted in the prior-year quarter.
Net sales climbed 11.5% to $48.4 million during the quarter. Reorder sales jumped 17% to $37.6 million. New customer additions for the quarter came in at 151,000 compared to 154,000 new customer additions in the year-ago period, down 2%. Advertising spending, which is the prime factor behind the addition of new customers, climbed 6%, while general and administrative expenses declined 2%. Sales over the Internet in the quarter came in at $33.6 million, up 18%. Approximately 70% of PetMed’s orders were placed online.
Gross profit increased 8.7%, driven by an increase in net sales, partially offset by a rise of 13.2% in cost of sales. Total operating expenses increased 3.3% to $10.4 million due to the rise in advertising expenses and depreciation and amortization expenses, partially offset by the decline in general and administrative costs. Operating income increased 16% to $8.4 million.
PetMed exited the quarter with cash and cash equivalents of $56.6 million, and shareholders’ equity of $92.3 million.
PetMed offers a wide range of products for dogs, cats and horses. The company offers two types of products: Non-prescription medications and Prescription medications. Non-prescription medications include flea and tick control, bone and joint care, vitamins, nutritional supplements and hygiene products. Prescription medications include thyroid and arthritis medications and antibiotics in addition to other specialty medications.
Currently we are Neutral on PetMed.
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