PetMed Express (NASDAQ: PETS) reported its second quarter financial results on Monday and topped analysts’ estimates, sending shares skyrocketing by 36% during late afternoon trading hours.
For the quarter, PetMed’s reported earnings of USD 0.33 per share on revenue of USD 69.9 Million. FactSet analysts expected earnings of USD 0.26 per share on revenue of USD 69.7 Million.
Despite the quarterly beat, PetMed’s reported that net income fell from USD 10.8 Million during the second quarter last year to USD 6.7 Million at the end of the quarter. Moreover, revenue also slipped from USD 71.4 Million a year ago, representing a 2% decline.
However, during the quarter, the Company made improvements to its reorder sales and gross and operating margins.
Gross margins improved by 130 basis points from 27.3% in the June quarter to 28.6% in the September quarter. Operating margins increased by 430 basis points from 7.7% in the same period.
PetMed’s said the improvements are largely due to obtaining direct purchasing relationships with major manufacturers and implementation of the minimum advertised price (MAP) policy by some of the major manufacturers.
Additionally, PetMed’s also launched its customer rewards programs that allows customers to accrue points to receive future discounts on orders. The Company mentioned that the program increased customer engagement and should also help promote future reorder sales.
PetMed’s Board of Directors also declared a quarterly dividend of USD 0.27 per share on the Company’s common stock. The dividend will be payable on November 15 to shareholders of record at the close of business on November 4.