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

PetMed Express (NASDAQ:PETS) released its earnings results on Tuesday. The company reported ($0.31) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.11) by ($0.20), FiscalAI reports. PetMed Express had a negative return on equity of 91.69% and a negative net margin of 17.34%. The company had revenue of $35.77 million during the quarter, compared to analyst estimates of $62.00 million. During the same period in the prior year, the business posted $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 Trading Down 8.7%

PETS traded down $0.10 on Wednesday, hitting $1.10. 308,555 shares of the company’s stock were exchanged, compared to its average volume of 278,195. The firm has a market cap of $23.96 million, a PE ratio of -0.80 and a beta of 0.82. The stock has a fifty day moving average of $1.40 and a two-hundred day moving average of $2.05. PetMed Express has a twelve month low of $1.06 and a twelve month high of $4.10.

Analyst Upgrades and Downgrades

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