PetMed Express, which is more commonly known as 1-800-PetMeds, reported net income of $8.1 million, up from $6.6 million a year ago. The company’s sales rose from $68.4 million to $77.2 million during the same period. The quarter ended June 30.
In addition to total growth, the increase in net income represented margin growth of 9.7% of sales a year ago to 10.5% for the quarter just ended.
The company achieved its revenue and income growth while simultaneously cutting advertising expenses between the quarters from $10.1 million in first-quarter 2008 to $9.9 million during the quarter just ended.
It also kept its cost of sales, which had been at 62.3% of total sales a year ago, down to 62% of total sales.
“We are pleased to report a 29% increase to our income from operations for the quarter, and a 17% increase in our reorder sales, compared to a 16% increase in reorder sales for the same quarter in the prior year,” Menderes Akdag, PetMed Express’s CEO and president said in a statement.
Akdag continued, “We acquired approximately 297,000 new customers in our first fiscal quarter compared to 267,000 for the same quarter in the prior year. Our costs to acquire a new customer decreased by 12% to $33 for the quarter ended June 30, 2009, compared to $38 for the same quarter in the prior year.”
The Observer’s Take: Pets and pet care may be one of the few truly recession-resistant industries – even adult-oriented fare, long seen as impervious to market fluctuations, has taken a hit of late, largely due to the amount of free content online. But pets will always have to eat, and they will chew through rhinestone-studded collars. Owners reluctant to spend on themselves are more willing to loosen the purse strings for their companions. Don’t take my word for it: The American Pet Products Association (APPA) predicts 2009 spending on pets will top $45 billion this year – the highest it has ever been. Adds the APPA in its 2008 Pet Products Trend Report, “More and more companies traditionally know for human products are going to the dogs, and cats, and reptiles. Big name companies including like Paul Mitchell, Omaha Steaks, Origins, Harley Davidson and Old Navy are now offering lines of pet products ranging from dog shampoo, pet attire, and name-brand toys to gourmet treats and food.”
