Shares of PetMed Express Inc. (NASDAQ:PETS) soared today after the country's largest pet pharmacy reported strong fiscal first-quarter results. As of 12:32 a.m. EDT, the stock was up 19.3%.
PetMed Express surged past analysts' forecasts once again as revenue increased 10% to $79.7 million, topping the consensus estimate of $77.3 million. A shift to higher-margin products helped generate a 350-basis-point increase in gross margin to 34.5%, which in turn powered a 41% jump in earnings per share to $0.45, beating the consensus estimate of $0.38.
The company also added 169,000 new customers in the quarter, which ended June 30, an 8% acceleration from its growth the year before, and saw average order value increase from $82 to $87.
CEO Menderes Akdag called the increases in new orders and reorders "encouraging," adding that the company "continues to focus on increasing sales and improving our service levels."
Management did not provide guidance for the current quarter, nor for the rest of the fiscal year, but its second strong earnings beat in a row was an encouraging sign for near-term growth, especially with the surge in gross margin, which should carry through to the rest of the fiscal year. The pet care industry has exploded over the past generation, and should continue to grow at a robust rate, outpacing the overall economy. Shares of PetMed Express have nearly doubled this year, and with the switch to a new generation of drugs and the overall industry growth, the stock should continue to outperform.