PetMed Express (PETS) Teams Up with Dutch for Enhanced Pet Healt

PetMed Express, trading under the ticker PETS, has unveiled a new strategic alliance with Dutch, a provider of virtual veterinary services. This partnership is part of PetMeds’ ongoing efforts to broaden its healthcare offerings by making pet health services more affordable and accessible. With this collaboration, pet owners can use Dutch’s advanced technology and expert veterinarians to obtain prescriptions from PetMeds’ extensive range of medications efficiently.

The agreement allows pet owners to enroll in a monthly Dutch membership, offering around-the-clock virtual consultations with veterinarians across 34 states. Since its inception, Dutch has facilitated nearly 700,000 visits, addressing over 150 health conditions, including medications for fleas, ticks, allergies, and joint pain treatments.

Wall Street Analysts Forecast

Based on the one-year price targets offered by 2 analysts, the average target price for PetMed Express Inc (PETS, Financial) is $3.60 with a high estimate of $4.00 and a low estimate of $3.20. The average target implies an
upside of 1.69%
from the current price of $3.54. More detailed estimate data can be found on the PetMed Express Inc (PETS) Forecast page.

Based on the consensus recommendation from 2 brokerage firms, PetMed Express Inc’s (PETS, Financial) average brokerage recommendation is currently 3.5, indicating “Hold” status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.

Based on GuruFocus estimates, the estimated GF Value for PetMed Express Inc (PETS, Financial) in one year is $9.98, suggesting a
upside
of 181.92% from the current price of $3.54. GF Value is GuruFocus’ estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business’ performance. More detailed data can be found on the PetMed Express Inc (PETS) Summary page.

PETS Key Business Developments

Release Date: February 10, 2025

• Net Sales: $53 million, a 19% decline from $65.3 million last year.
• Gross Profit: $14.9 million, compared to $17.9 million last year.
• Gross Profit Margin: 28.1%, an 80 basis point improvement year-over-year.
• General and Administrative Expenses: $10.8 million, a 19.7% decrease from last year.
• Advertising Expenses: $3 million, down from $5.8 million last year.
• Net Loss: $700,000 or $0.03 per diluted share, improved from a $2 million loss or $0.10 per diluted share last year.
• Adjusted EBITDA: $2 million, up from $900,000 in the prior year period.
• Cash and Cash Equivalents: $50 million with no debt as of December 31, 2024.
• New Customers: Approximately 63,000 new customers with orders shipped during the quarter.
• Average Order Value (AOV): Increased by 7% to $108 from $101 last year.
• Inventory Reduction: 66% reduction in total inventory on hand, totaling $11.8 million at the end of Q3 versus $34.6 million last year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• PetMed Express Inc (PETS, Financial) achieved $2 million in adjusted EBITDA for Q3, marking a $1.1 million improvement year-over-year.
• The company successfully implemented cost-cutting measures and consolidation strategies, targeting $5 million in annualized savings.
• PetMed Express Inc (PETS) enhanced its digital shopping experience and relaunched its iOS and Android mobile apps, improving customer engagement.
• The company reported a 7% increase in average order value (AOV) to $108, indicating higher spending per customer.
• Inventory efficiency improved significantly, with inventory turn rising to 1.5% in Q3 compared to 0.9% last year, and a 66% reduction in total inventory on hand.

Negative Points

• Net sales for Q3 were $53 million, a 19% decline compared to the same period last year, primarily due to reduced advertising spend.
• The company experienced a decrease in new customer acquisition, with sales and new customer numbers falling short of expectations during the holiday period.
• PetMed Express Inc (PETS) reported a net loss of $700,000 for the third quarter, although this was an improvement from the previous year.
• The competitive and promotional holiday environment led to a strategic decision to prioritize margin protection over aggressive promotions, impacting sales.
• Despite improvements, the company is still facing challenges in capturing younger demographics, such as millennials and Gen Z, which are crucial for future growth.