Shares of PetMed Express Inc. (NASDAQ:PETS) fell as much as 16.6% in trading Monday after the company reported fiscal first-quarter results. As of 3:05 p.m. EDT, shares had recovered slightly, but were still down 13.2% on the day.
Revenue was up 10% in the quarter to $87.4 million and reorders were up 11% to $71.5 million, while net income jumped 35.5% to $12.6 million, or $0.62 per share. The problem is, analysts were expecting earnings of $0.63 per share, so results were slightly below what traders had expected.
Management also said that average order size increased $3 to $90, and the tax rate dropped from 35% to 21% because of the tax bill passed in late 2017. Both helped drive the bottom-line growth.
Traders may be disappointed with the results today, but if you look at PetMed's double-digit growth and its surging bottom line, I think there's a lot to like about the stock. Pet supplies in general are a quickly growing business, and that doesn't seem like it's stopping anytime soon. With shares trading at 15.8 times analysts' fiscal 2019 estimates, there's a lot to like about this stock, and I think it will continue to ride industry growth.