PetMed Express sales slip 1.3% in Q1
July 22, 2015 03:10 PM
Sales and new customer acquisition declined slightly, but PetMed Express Inc. posted higher net income for the fiscal first quarter.
Q1 sales were $71.63 million, down 1.3% from $72.54 million in the same period a year ago, according the retailer of pet medications and pet supplies, No. 177 in the Internet Retailer 2015 Top 500 Guide. PetMed Express does not break out web sales in dollars but said online sales accounted for 81% of total sales, or $580 million. That compares with online sales comprising 80% of total sales, or $58.03 million, a year ago.
PetMed reported that it acquired 148,000 new customers in the quarter, a 19.6% drop from 184,000 during the same period the prior year. The advertising cost of acquiring a customer was approximately $53 compared to $54 for the same quarter the prior year, president and CEO Menderes Akdag said during a call with analysts Tuesday, according to a Seeking Alpha transcript.
Despite a sales decline, net income rose 15.9% to $5.76 million from $4.97 million.
“Our average order was approximately $82 for the quarter compared to $78 for the same quarter the prior year. The increase in average order value was mainly due to a change in product mix through higher-priced items and increased doses,” Akdag said.
Reorder sales increased 1.8% to $59.6 million for the quarter compared to $58.5 million last year, he said, while new order sales decreased 14% to $12.1 million for the quarter compared to $14.1 million for the same quarter the prior year. “The decrease was mainly due to a reduction in advertising,” he said.
Advertising costs were $7.89 million, down 20.3% from $9.90 million a year ago because the return on investment “was not there,” Akdag said. “The majority of the [ad] reduction was on television.”