UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $.001 per share PETS NASDAQ Global Select Market FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __ ...

Financial Performance - PetMed (PETS) reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of a loss of $0.06 per share, compared to break-even earnings per share a year ago, representing an earnings surprise of 283.33% [1] - The company posted revenues of $59.57 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 9.77%, and down from $71 million in the same quarter last year [2] - PetMed has surpassed consensus EPS estimates two times over the last four quarters but has not beaten consensus revenue estimates during that period [2] Stock Performance - PetMed shares have declined approximately 43.6% since the beginning of the year, while the S&P 500 has gained 21.2% [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $64.51 million, and for the current fiscal year, it is $0.08 on revenues of $265.56 million [7] - The estimate revisions trend for PetMed is currently favorable, resulting in a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Internet - Commerce industry, to which PetMed belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Chewy (CHWY), another company in the same industry, is expected to report quarterly earnings of $0.23 per share, reflecting a year-over-year increase of 53.3% [9]

Financial Performance - Net sales for Q2 FY2025 were $59.6 million, a decrease from $70.999 million in the same period last year[2] - Gross margin improved to 29.1%, up 0.8% compared to the prior year period[2] - Net income increased to $2.3 million, or $0.11 per diluted share, compared to $0.7 million, or $0.03 per diluted share, in the prior year[2] - Net income for the six months ended September 30, 2024, was $6,080,000, a significant increase of 1,544% compared to a net loss of $421,000 in the same period of 2023[19] - Adjusted EBITDA was $2.1 million, a significant improvement from an Adjusted EBITDA loss of $(1.5) million in Q1 FY2025[3] - Adjusted EBITDA for the six months ended September 30, 2024, was $561,000, a decrease of 92% from $6,772,000 in the prior year[19] Operating Expenses and Liabilities - Operating expenses decreased to $16.757 million from $19.187 million in the prior year period, reflecting cost control measures[11] - Total current liabilities reduced to $48.832 million from $72.158 million at the end of the previous fiscal year[10] Cash Flow and Cash Position - Cash and cash equivalents were $52.045 million, down from $55.296 million at the end of the previous fiscal year[10] - Cash flows from operating activities showed a net cash used of $1,128,000 for the six months ended September 30, 2024, compared to a net cash used of $215,000 in 2023[12] - Cash and cash equivalents at the end of the period were $52,045,000, down from $53,471,000 at the end of the previous year[12] - The company reported a net decrease in cash and cash equivalents of $3,251,000 for the six months ended September 30, 2024, compared to a decrease of $50,615,000 in the same period of 2023[12] Inventory and Accounts Receivable - The company reported a significant increase in inventories, netting $15,464,000 for the six months ended September 30, 2024, compared to $3,237,000 in 2023[12] - Accounts receivable increased by $1,488,000 for the six months ended September 30, 2024, compared to a decrease of $345,000 in 2023[12] Strategic Initiatives - The company is focused on consolidating operations to lower costs and improve profitability as part of its transformation strategy[4] - Future growth initiatives will include differentiating product assortments and enhancing brand awareness campaigns[4] - The company remains confident in its turnaround strategy and the investments being made to strengthen its competitive position[4] Stock-Based Compensation and Dividends - Stock-based compensation for the six months ended September 30, 2024, was $(7,631,000), a decrease of 319% from $3,488,000 in the same period of 2023[19] - The company paid dividends of $175,000 in the current period, a significant decrease from $12,404,000 in the same period of 2023[12] Acquisitions - The company acquired PetCareRx, resulting in a cash outflow of $35,859,000 in the previous period[12]

Core Insights - PetMed Express, Inc. reported financial results for the second quarter of fiscal 2025, showing improvements in net income and adjusted EBITDA, indicating progress in its business transformation efforts [2][3]. Financial Performance - Net sales for the second quarter were $59.6 million, a decrease from $70.999 million in the prior year period [2][9]. - Gross margin increased to 29.1%, up by 0.8% compared to the same period last year [2]. - Net income rose to $2.3 million, or $0.11 per diluted share, compared to $0.7 million, or $0.03 per diluted share, in the prior year [2][10]. - Adjusted EBITDA improved to $2.1 million, a significant recovery from an adjusted EBITDA loss of $(1.5) million in the first quarter of fiscal 2025, but down from $3.4 million in the prior year period [2][3][13]. Business Transformation Initiatives - The company is focused on key initiatives aimed at improving profitability and establishing itself as a leader in the consumer pet healthcare sector [3]. - Efforts include consolidating and streamlining operations between PetMeds and PetCareRx, which have materially lowered the cost structure [3]. - The company plans to enhance product assortments, brand awareness campaigns, and core marketing initiatives to drive growth [3]. Operational Metrics - Total current assets decreased to $70.779 million from $93.648 million year-over-year [7]. - Total assets decreased to $146.034 million from $169.884 million year-over-year [7]. - Current liabilities decreased to $48.832 million from $72.158 million year-over-year [7]. Future Outlook - The company remains confident in its direction and believes that ongoing changes and investments will create a more compelling value proposition for stakeholders [3].

Core Insights - Zacks Premium provides tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1][2] Zacks Style Scores - Zacks Style Scores rate stocks based on value, growth, and momentum, serving as complementary indicators to the Zacks Rank, helping investors identify stocks likely to outperform in the next 30 days [2][3] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3] - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5] Value Score - The Value Score identifies attractive stocks using ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, focusing on finding undervalued stocks [3] Growth Score - The Growth Score emphasizes a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Score helps investors capitalize on price trends, using metrics like one-week price change and monthly earnings estimate changes [4] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for selecting stocks with strong value, growth, and momentum characteristics [5] Zacks Rank - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investors in building successful portfolios [6] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41%, significantly outperforming the S&P 500 [7] Stock Selection Strategy - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize potential upside [8] - Stocks with lower ranks, even with high Style Scores, may still face declining earnings forecasts, increasing the risk of price drops [9] Company Spotlight: PetMed Express - PetMed Express, operating as 1-800-PetMeds, is a leading pet pharmacy with a product line of approximately 750 SKUs for various pets [10] - The company holds a 1 (Strong Buy) Zacks Rank and a VGM Score of B, indicating strong investment potential [10] - PetMed Express has a Momentum Style Score of B, with shares increasing by 22.1% over the past four weeks, and an upward revision in earnings estimates for fiscal 2025 [11]

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Financial Data and Key Metrics Changes - For Q1 fiscal year 2025, sales were $68 million, a 13% decline from $78.2 million in the same period last year, primarily driven by lower prescription medication sales [22] - Gross profit margin decreased to 26.4% from 28.8% year-over-year, attributed to higher promotional activity [22] - Adjusted EBITDA reflected a loss of $1.5 million compared to a profit of $3.1 million in the same period last year [22] - Net income for the first quarter was $3.8 million or $0.18 per diluted share, compared to a net loss of $1.1 million or $0.06 per diluted share for the same period last year [23] Business Line Data and Key Metrics Changes - The company reported approximately 75,000 new customers in Q1, down from 86,000 in the same period last year [22] - Operational efficiency improved with a 20% increase in inventory turns and an 11% reduction in ending inventory compared to last year [8] Market Data and Key Metrics Changes - The U.S. pet market grew 7% in 2023, exceeding $150 billion annually, with a significant portion driven by veterinary care and prescription medication [21] Company Strategy and Development Direction - The company is focusing on enhancing operational performance, optimizing cost structure, and improving shareholder returns [6] - Strategic initiatives include consolidating operations between PetMed and PetCareRx, enhancing technology, and improving customer experience [11][12] - The leadership team is committed to transforming PetMed and PetCareRx into a dynamic ecosystem for pet products and services [12] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic pressures affecting consumer spending, leading to fewer visits to veterinary clinics and lower prescription sales [25] - Despite challenges, management expressed confidence in capturing a larger share of the $150 billion pet care market through improved customer engagement and technology [27] - Early indicators show stabilization in revenue and improvement in conversion rates and margins [28] Other Important Information - The company has a strong balance sheet with $53 million in cash and no debt as of early August [24] - Recent technology improvements have led to a reduction in call wait times and improved order processing efficiency [32][20] Q&A Session Summary Question: What macro pressures drove the 13% revenue decline? - Management identified fewer visits to veterinary clinics and increased consumer requests for promotions as key macro issues affecting revenue [25] Question: How confident is the company in driving growth despite macro pressures? - Management expressed confidence in their strategies to engage customers and improve service, believing they are just beginning to tap into the market potential [27] Question: What technology issues contributed to the softness during the quarter? - Management explained that disruptions from a new order management system led to longer hold times and wait times for customer service, which have since been addressed [31][32]

DELRAY BEACH, Fla., July 23, 2024 (GLOBE NEWSWIRE) -- PetMed Express, Inc., dba PetMeds and parent company of PetCareRx, (NASDAQ:PETS) will hold a conference call on Tuesday, August 6, 2024 at 4:30pm Eastern time to discuss its financial results for the fiscal first quarter ended June 30, 2024. Financial results will be issued in a press release prior to the call. Date: Tuesday, August 6, 2024 Time: 4:30pm Eastern time (1:30pm Pacific time) U.S. dial-in number: 844-826-3035 International number: 412-317-519 ...

Investors can contact the law firm at no cost to learn more about recovering their losses Investors are encouraged to contact attorney Lesley F. Portnoy, by phone 310-692-8883 or email: lesley@portnoylaw.com, to discuss their legal rights, or click here to join the case via www.portnoylaw.com. The Portnoy Law Firm can provide a complimentary case evaluation and discuss investors' options for pursuing claims to recover their losses. On this news, PetMed's stock price fell $0.54 per share, or 11.46%, to close ...

The investigation concerns whether PetMed and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. On June 11, 2024, PetMed issued a press release announcing its financial results for its fourth quarter and fiscal year 2024. Among other items, PetMed reported a net loss per share of $0.25, compared to a net loss per share of $0.01 in the year-ago period. Although PetMed reported a net increase in sales year over year, that was outweighed by an incre ...