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Why PetMed Express, Inc. Stock Jumped 18% in July

What happened

Shares of PetMed Express, Inc. (NASDAQ: PETS) jumped last month after the nation's largest pet pharmacy delivered a strong second-quarter earnings report. According to data from S&P Global Market Intelligence, the stock climbed 18% in July.

So what 

PetMed Express beat expectations again as revenue increased 10% to $79.7 million, topping the consensus at $77.3 million. A shift to higher-margin products drove gross margin up 350 basis points to 34.5%. That led EPS up from $0.32 to $0.45, which bested estimates at $0.38. Sales from new orders were up 14% in the period as the company added 169,000 new customers. Order value also increased from $82 to $87 in the quarter.

CEO Menderes Akdag said, "We were encouraged with increases in both new order and reorder sales during the quarter, along with an accelerated increase to net income for the second consecutive quarter."

Now what 

PetMed Express has been an under-the-radar winner recently, as the stock is up nearly 250% over the last three years and has more than doubled this year after posting back-to-back blowout earnings reports.

The company did not issue guidance, but I'd expect the stock to continue to outperform, as spending on pets continues to outgrow the greater economy and PetMeds' leading position in the industry gives it a competitive advantage.

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