The Pompano Beach, Fla.-based Internet retailer saw a whopping 18% increase for second-quarter sales versus a year ago, and a 17% increase for the first six months of 2007 vs. a year ago. The company's second-quarter net income increased 37%, to $4.5 million, or $0.18 diluted per share, versus net income of $3.3 million, or $0.14 diluted per share, for the same quarter in 2006.
Menderes Akdag, CEO/president of the company, said during a conference call with analysts Monday morning that he was pleased with the results. Asked if he attributed the quarter's success to the national advertising campaign featuring actress Betty White, which started in January he said: "The numbers don't lie, obviously."
Net sales for the quarter ended Sept. 30 were $51.5 million, compared to $43.8 million for the same quarter in 2006. Net sales for the six months ended Sept. 30 were $110.6 million, compared to $94.5 million for the same period in 2006.
Of that total, reorder sales increased by 25%, from $28.1 million to $35.0 million, for the quarters ended Sept. 30, 2007 and 2006, respectively, and for the six months ended Sept. 30, 2007, reorder sales increased by 21%, to $75.0 million, compared to $62.0 million for the six months in the prior year.
"We are doing a better job of communicating with our customer base," Akdag told analysts. "We are communicating more often, staying in front of them, basically."
For the quarter, the company spent $8.1 million on advertising compared to $7.7 million for same quarter a year earlier, for an increase of 5%, Akdag says. For the first six months of the year, the company spent $16.6 million compared to $16 million a year ago, an increase of 4%.
In the national TV spots, White speaks to pet owners from what appears to be her home about the value of using flea, tick and heartworm medications year-round, which is important to protect pets from skin irritations, allergies and diseases.
The company acquired approximately 222,000 new customers in this year's second quarter versus 212,000 for the same quarter in the prior year. Internet sales increased by 23%, to $33.7 million for the quarter, versus $27.4 million for the same quarter in the prior year, and for the six months ended Sept. 30 Internet sales increased by 24%, to $71.6 million, compared to $57.6 million for the same six months in the prior year.
Approximately 65% of all sales were placed on the company's web site for the second fiscal quarter, compared to 62% for the same quarter in the prior year.
The company will focus its upcoming efforts in three areas to capitalize on the pet industry growth trend, says Akdag. They are: 1) capturing additional market share, 2) increasing reorders with personalized communication and health education content and 3) improving current service levels. The company is revamping its web site, which will result in better customer service, he adds, though he gave no date for the site going live.
Founded in 1996, PetMed Express claims to be the nation's largest pet pharmacy, delivering prescription and non-prescription pet medications and other health products for dogs, cats and horses at competitive prices direct to the consumer through its 1-800-PetMeds toll-free number and on the Internet at 1800petmeds.com.