PetMed Express' New Order Sales Increase, Competition Rife
Zacks Investment Research | Jun 12, 2017 09:01PM ET
On Jun 12, we issued an updated research report on Pompano Beach, FL-based PetMed Express, Inc. (NASDAQ:PETS) . Operating as 1-800-PetMeds, the company is a leading nationwide pet pharmacy. PetMed currently sports a Zacks Rank #1 (Strong Buy).
Over the past three months, PetMed has been trading above the Zacks categorized Electronic Commerceindustry. Per the last trading price, the company has gained a stupendous 83.6% when compared to the 19.9% gain of the broader industry.
We are encouraged to know that PetMed’s performance has improved in fiscal 2017, after several quarters of low new order sales. In the fourth quarter, new order sales increased 17% to $10.9 million primarily on the back of aggressive pricing. Further, reorder sales grew 13.2% year over year to $52.1 million.
The company markets its products primarily under well-known brands of medication such as Frontline Plus, K9 Advantix, Advantage, Heartgard Plus, Sentinel and Interceptor, among others.
We are optimistic to note that PetMed is currently focusing on increasing its advertising spending to drive new order sales and shifting sales to higher margin items while continuing to expand its product offerings.
On the flip side, PetMed operates in a highly competitive and fragmented pet medications market. The competitors include veterinarians, traditional retailers, other mail-order and online retailers of pet medications and other health products. Also, the acquisition of Novartis’ animal health division by Eli Lilly and Company (NYSE:LLY) has given rise to more challenges for PetMed.
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