PetMed Express Earnings Preview

While PetMed Express (Nasdaq: PETS  ) missed estimates last quarter, investors hope that it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings on Monday. PetMed Express is a nationwide pet pharmacy. The company markets prescription and non-prescription pet medications and other health products for dogs, cats, and horses direct to the consumer.

What analysts say:

• Buy, sell, or hold?: Analysts like PetMed Express better than competitor China Nepstar Chain Drug overall. Zero out of two analysts rate China Nepstar Chain Drug a buy compared to one of eight for PetMed Express. Analysts haven't adjusted their rating of PetMed Express for the past three months.
• Revenue forecasts: On average, analysts predict $60.6 million in revenue this quarter. That would represent a decline of 1.1% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.15 per share. Estimates range from $0.13 to $0.16.

What our community says:
CAPS All-Stars are solidly behind the stock with 96.4% assigning it an outperform rating. The community at large concurs with the All-Stars with 97% awarding it a rating of outperform. Fools are keen on PetMed Express and haven't been shy with their opinions lately, logging 323 posts in the past 30 days. Even with a robust four out of five stars, PetMed Express' CAPS rating falls a little short of the community's upbeat outlook.

Management:
PetMed Express' income has fallen year over year by an average of 26.1% over the past five quarters. The company's gross margin shrank by 3.8 percentage points in the last quarter. Revenue fell 1.1% while cost of sales rose 4.9% to $49.5 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q1	Q4	Q3	Q2
Gross Margin	32.8%	34.3%	37.5%	36.5%
Operating Margin	10.3%	12.7%	15.6%	12.6%
Net Margin	6.6%	8.1%	10.0%	8.1%

For all our PetMed Express-specific analysis, including earnings and beyond, add PetMed Express to My Watchlist.

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