What happened

Investors in PetMed Express (NASDAQ:PETS) are off to a great start for the week. Shares of the pet pharmacy company jumped 23% as of 10:45 a.m. EDT on Monday in response to an upbeat earnings report.

So what

Here are the headline numbers from the company's third quarter:

  • Revenue jumped 9.7% to $66.7 million. That sailed past the $63.4 million in revenue that Wall Street had expected.
  • Margin improvements caused net income to skyrocket 79% to $8.8 million, or $0.43 diluted per share. That easily surpassed the $0.30 in EPS that analysts had modeled.
  • Management credited the huge net income growth to increased sales in high-margin categories like next-generation flea, tick, and heartworm drugs. 

Traders bid up shares on the better-than-expected results.

Dog lying on grass with mouth open and tongue out

Image source: Getty Images.

Now what

Today's jump should offer some relief to investors who have held throughout the recent short attack. Last month a notable short-seller accused PetMed of distributing opioids to people through animal prescriptions. The company immediately responded to the accusation by stating that less than 1% of revenue is derived from the sale of opioids and that all sales were accompanied by a valid prescription from a veterinarian. The company affirmed that its recent profit growth was caused by increased sales of next-generation products to control flea, tick, and heartworm infestation. Today's report lends credence to the company's defense and should go a long way toward silencing the critics.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.