PetMed Express' (PETS) profit dropped in the first quarter.
Earnings and Revenue
The company fell short of estimates with EPS of 20 cents a share and revenues of $69 million. Analysts were expecting EPS of 23 cents a share and revenues of $77.3 million.
The company's net income for the quarter was $4 million. According to the reported number, this is down 18.3% from last year's levels. Revenue fell 6.3% from $73.6 million in the same period last year.
Company Fundamental Trends
Slumping revenue in the last quarter ends The company's streak of two consecutive quarters of revenue increases.
History Against Expectations
The company missed forecasts after topping estimates in the previous two quarters. In the fourth quarter of the last fiscal year, it topped the mark by 2 cents, and in the third quarter of the last fiscal year, it was ahead by 3 cents.
Menderes Akdag, CEO and President, commented: "Although our sales were down due to a decline in average order size, we did see an increase in total orders. During the quarter ended June 30, 2012 our average order size was $73, compared to $80 for the quarter ended June 30, 2011. This reduction can be attributed to customers purchasing smaller quantities, for example a three-month supply instead of six months, additional discounts given, and a change in product mix to lower priced items. In addition, the decrease in sales for the quarter can be attributed to the unavailability of Novartis brands during the quarter, due to the manufacturer's suspended production. The sales in the June quarter might also have been negatively affected by the peak season starting earlier this year due to the warmer weather, which shifted sales to the March quarter. Cash flow from operations increased by 62%, from $8.5 million to $13.8 million for the quarters ended June 30, 2011 and 2012, respectively. To address the decrease in sales for the quarter, we are focusing on advertising efficiency and shifting sales to higher margin items, while continuing to expand our product offerings."
Estimates provided by Zacks Investment Research and company fundamentals from Xignite Financials.