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Why Petmed Express Inc's Shares Popped 26% Today

By Travis Hoium - May 8, 2017 at 4:00PM

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The growth engine is on high at Petmed Express Inc.

What happened

Shares of Petmed Express Inc ( PETS -0.26% ) jumped as much as 26.4% on Monday after reporting fiscal fourth-quarter earnings. At 2:55 p.m. EDT shares were still up 25.3% for the day.

So what

Revenue was up 13.8% to $63 million in the quarter and net income was up 38.5% to $7.5 million, or $0.37 per share. Analysts were only expecting $56.3 million in revenue and $0.26 per share in earnings.

Dogs playing in a park.

Image source: Getty Images.

There was a 17% increase in new orders in the fourth quarter and a 13% increase in reorders, according to management.

Now what

Not only is Petmed growing on the top line, it's improving margins as well. Gross margin was up from 31.9% a year ago to 35.1%. An increase of $3 per order to $86 helped drive the top line and margins as well. Given the top and bottom line results and the increased dividend to $0.20 per share each quarter, a nice yield for investors, I think shares still have room to run higher.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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PetMed Express, Inc. Stock Quote
PetMed Express, Inc.
$27.10 (-0.26%) $0.07

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