PetMed Express, Inc. (PETS), the America ’s largest Pet Pharmacy, recently reported second-quarter 2010 results. The quarterly earnings of 28 cents a share came in line with the Zacks Consensus Estimate but rose 12% year-on-year from 25 cents posted in the prior-year quarter.
Net sales climbed 5% to $62.4 million during the quarter. Reorder sales jumped 11% to $45.8 million, whereas new order sales fell 8% to $16.7 million, as the new customer additions fell 3% to 233,000 due to lower advertising spending (down 10% to $7.8 million). However, the cost to acquire a new customer fell 8% to $33 from $36 in the year-ago quarter.
PetMed also notified that the average order size for the quarter fell to $78 from $81 in the prior-year quarter due to customers purchasing smaller quantities of products.
Gross profit increased 4% driven by increase in net sales, partially offset by rise in cost of sales (up 6%). Total operating expenses fell 4% to $13.9 million due to decline in advertising expenses, partially offset by rise in general and administrative costs and increase in depreciation and amortization expenses. Operating income increased 17% to $9.8 million.
The company ended the quarter with cash and cash equivalents of $56.2 million, and shareholders’ equity of $88.4 million.
PetMed delivers prescription and non-prescription pet medications, and other health products for dogs, cats, and horses direct to the consumer at a compelling price through its toll free number and website.
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