Financial Data and Key Metrics Changes - For the first quarter of fiscal 2023, sales were $70.2 million, a decrease of 11.5% compared to $79.3 million for the same period last year [22][40] - Net income was $2.8 million or $0.14 diluted earnings per share, down from $4.4 million or $0.22 diluted earnings per share year-over-year [61] - Adjusted EBITDA for the first quarter was $6.3 million, or $0.31 on a diluted basis, compared to $7.1 million or $0.35 on a diluted basis for the same quarter last year [61] Business Line Data and Key Metrics Changes - Reorder sales decreased by 7.8% to $63.3 million for the quarter ended June 30, 2022, compared to $68.7 million for the same quarter the prior year [40] - The AutoShip subscription program saw an increase in adoption, with approximately 34% of revenue derived from this program during the June quarter [51][57] Market Data and Key Metrics Changes - The total U.S. pet market is over $100 billion in annual sales and is expected to reach $120 billion by 2024, with the addressable pet medication market at approximately $10 billion [25] - The company operates in a resilient market, with pet ownership in U.S. households increasing over time, currently at seven out of ten households [34] Company Strategy and Development Direction - The company is transitioning from a focus on existing customers to also generating new customer acquisition, particularly through the AutoShip program and telemedicine initiatives [50][64] - A strategic partnership with Vetster aims to enhance telemedicine capabilities, integrating virtual vet services into the company's offerings [26][45] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a slow start to the flea and tick season due to colder temperatures but noted a rebound in sales as temperatures warmed [2][70] - The company remains optimistic about new customer acquisition initiatives and expects improvements in the upcoming quarters [88] Other Important Information - The company has a strong balance sheet with approximately $105.4 million in cash and cash equivalents and no debt as of June 30, 2022 [9][43] - The Board of Directors declared a quarterly dividend of $0.30 per share, payable on August 19, 2022 [15] Q&A Session Summary Question: What does the seasonal mix look like this year compared to historical trends? - Management noted a slow start to the quarter but observed a rebound in sales through May and June, indicating recovery in the parasiticide business [70] Question: How is the company addressing customer behavior in a tougher macro backdrop? - Management indicated that brand loyalty remains strong, with minimal evidence of customers trading down in prescription medications [84][85] Question: Can you provide details on new customer growth for the quarter? - The company reported acquiring approximately 69,000 new customers during the quarter [86] Question: How is the inventory situation given ongoing supply chain issues? - Management stated that inventory levels are normalized and that direct relationships with manufacturers help mitigate supply chain concerns [110]
PetMed Express(PETS) - 2023 Q1 - Earnings Call Transcript