Florida-based PetMed Express 4Q profit tops Street's view

ASSOCIATED PRESSMay 7, 2013 

POMPANO BEACH -- PetMed Express Inc., operator of the online pet pharmacy 1-800-PetMeds, said Monday that its fiscal fourth-quarter net income climbed 15 percent as it reduced operating expenses and improved gross margins.

The performance beat Wall Street's view, and the stock rose.

For the period ended March 31, the Pompano, Beach company earned $4.6 million, or 23 cents per share. A year ago it earned $4 million, or 20 cents per share.

Analysts surveyed by FactSet forecast earnings of 21 cents per share.

Shares of PetMed Express added 37 cents, or 2.8 percent, to $13.56 in morning trading.

The company said its quarterly gross margin -- a measure of how much of each dollar of sales that a company gets to keep -- improved as it shifted to more higher-margin products, like generics.

Operating expenses declined to $11 million from $12.7 million as it trimmed advertising spending.

Revenue fell 9 percent to $51.1 million from $55.9 million, hampered by the colder-than-expected weather. Wall Street predicted revenue of $55.4 million.

PetMed Express' full-year net income rose 3 percent to $17.2 million, or 86 cents per share, from $16.7 million, or 80 cents per share, in the previous year. Annual revenue declined 4 percent to $227.8 million from $238.3 million.

Online sales grew, comprising about 77 percent of sales for the year as compared with 75 percent of sales for the prior year.

PetMed Express said that the suspended production of Novartis brands by the manufacturer hurt its full-year revenue, but noted that the suspension was recently lifted for certain items.

The average order came to $73 for the fiscal year, down from $76 in the previous year as PetMed Express gave additional discounts to shoppers and shifted its product mix to lower-priced items.

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