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A woman takes a selfie with a dog
Ezequiel Becerra | AFP | Getty Images
A company responsible for keeping pets healthy may have just won earnings season.
PetMed Express soared more than 30% on Monday after the online pet pharmacy said its quarterly profit topped Wall Street’s estimates. The company reported earnings of 33 cents per share, while analysts were expecting earnings per share of 26 cents, according to Refinitiv. PetMed has missed estimates the last three quarters.
Despite beating expectations, PetMed’s net income fell about 36% since the same period last year as PetMed was forced to lower prices in a competitive pet-loving environment.
“Sales were negatively impacted by increased online competition and aggressive pricing in the market that forced us to reduce prices,” said Menderes Akdag, PetMed chief executive officer, on the earnings call.
Monday’s rally in the stock erased PetMed’s entire 16% year-to-date decline, but Credit Suisse, one of the three firms to cover the stock, said the improvement in tainted by a 16.2% fall in new customers, as companies like Chewy and Vetsource gain traction.
“While PETS faces several challenges, with intensifying competitive dynamics, we admit 2Q marks a turnaround in PETS margin deterioration, a trend we expect to continue,” said Credit Suisse research analyst Erin Wright.
PetMed, which has a market value of about $392 million, also announced a quarterly dividend of 27 cents per share on PetMed’s common stock.
—with reporting from CNBC’s Michael Bloom.