Categories Earnings, Health Care
PetMed Express on a rough patch ahead of next week’s Q2 earnings report
PetMed Express (NASDAQ: PETS) is set to report its second-quarter earnings results on Monday, October 21, before the market opens. The pet pharmacy operator’s results will be hurt by increased competition from Chewy (NYSE: CHWY) that compel PetMed to lower prices for surviving in the market.
PetMed’s margins have fallen considerably due to the pricing and volumes weakness. The weakness was created by the stiff competition from Chewy, which got into the pet prescription medication business last year. The stock, which carried the burden, has fallen over 46% in the past two years and over 31% in the past year, despite recovering over 17% in the past three months.
PetMed’s last hope is lowering costs by fixing direct relationships with manufacturers. However, the company has been struggling to hook accord under its hoods as stiff competition continues to steal away the clients. Also, the competition is expected to increase the spending on online advertising that the company expects to be more efficient.
For shrinking costs, the company could cut down dividends due to weakness in the pricing and volumes. The current dividend payout ratio stood at 72.97% with the forward annual dividend yield at 5.80%. Investors believe that a dividend cut could be the first step to dividend withdrawal in the future.
Analysts expect the company’s earnings to plunge by 50% to $0.26 per share and revenue will decline by 2.5% to $69.65 million for the second quarter. The company has missed analysts’ expectations thrice in the past four quarters.
For the first quarter, PetMed Express reported a 58% dip in earnings due to higher online competition and aggressive pricing in the market. Net sales decreased by 8.5% year-over-year. The company’s average order value declined by 4% to $86 in the previous-year quarter.
In fiscal 2020, the company will continue to be price competitive and will focus on optimizing its marketing in this more competitive environment and being more efficient with its advertising spending.
Most Popular
Salesforce stock hit by weak guidance, co-CEO’s exit. What next?
For technology stocks, 2022 has been a challenging year, with companies losing significant market value amid prolonged stock selloff. In that respect, Salesforce, Inc. (NYSE: CRM) is among the worst-affected
Macy’s (M): Here’s a look at the retailer’s expectations for the near term
Shares of Macy’s Inc. (NYSE: M) were down on Thursday. The stock has gained 36% over the past three months and 18% over the past one month. The company’s sales
KR Earnings: Kroger Q3 sales, profit increase and top expectations
Department store chain The Kroger Co. (NYSE: KR) on Thursday said its third-quarter sales and adjusted earnings increased year-over-year. The latest numbers also exceeded the market's expectations. Net earnings attributable to
