PetMed Express Beats on Both Top and Bottom Lines

PetMed Express (Nasdaq: PETS  ) reported earnings on Jan. 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), PetMed Express beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share increased significantly.

Margins grew across the board.

Revenue details
PetMed Express notched revenue of $49.6 million. The six analysts polled by S&P Capital IQ predicted a top line of $48.4 million on the same basis. GAAP reported sales were 1.8% lower than the prior-year quarter's $50.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.23. The six earnings estimates compiled by S&P Capital IQ forecast $0.17 per share. GAAP EPS of $0.23 for Q3 were 21% higher than the prior-year quarter's $0.19 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 34.7%, 70 basis points better than the prior-year quarter. Operating margin was 14.5%, 240 basis points better than the prior-year quarter. Net margin was 9.2%, 150 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $53.9 million. On the bottom line, the average EPS estimate is $0.17.

Next year's average estimate for revenue is $229.7 million. The average EPS estimate is $0.74.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 861 members out of 889 rating the stock outperform, and 28 members rating it underperform. Among 236 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 230 give PetMed Express a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on PetMed Express is hold, with an average price target of $10.17.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On January 22, 2013, at 7:27 PM, PETVET1111 wrote:

    PETS is not what it was.The drug industry has changed dramatically this year and PETS will not last.For instance,Merck has a new state of the art flea product out.Veterinarians must sign an iron clad agreement not to resell to PETS in order to be able to purchase it.Repercussions are severe.Merck and other drug companies have PETS in their sights.

    You must evaluate your forecasts and numbers given the new restrictions, as well as the internet competition.

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