PETS - Earnings call transcript Q3 2020

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Operator

Welcome to the PetMed Express Inc., doing business as 1-800-PetMeds Conference Call to review the Financial Results for the Third Fiscal Quarter for the quarter ended on December 31, 2020. At the request of the company, this conference is being recorded. Founded in 1996, 1-800-PetMeds is America's most trusted pet pharmacy, delivering prescription and non-prescription pet medications and other health products for dogs, cats and horses directed to the customer. 1-800 PetMeds markets its products through national advertising campaigns, which direct customers to order by phone or on the Internet, and aim to increase recognition of the PetMeds family of brand names. 1-800-PetMeds provides an attractive alternative for obtaining pet medications in terms of convenience, price, ease of ordering and rapid home delivery. would Chief turn Financial I to call time, company's the Officer, this like the to over At Mr. Bruce Rosenbloom.

Bruce Rosenbloom

Thank welcome you. everybody here today. to I'd like

statements Before listen that will the our portion Mendo session, of Officer, I conference which within call that information meaning later may in Exchange may over be be in Securities the include first this Also Commission forward-looking like and of future the and will beliefs question conference future These results Private statements be on different the from answer I'd everyone the will Chief Executive until press turn act XXXX Akdag, the to have included uncertainties. based of remind certain the that achievements to Reform events Securities materially uncertainties be assumptions a we us. based assumptions. that these are this on to our call by actual results, call. as concerning only results and the performance, President Litigation to and involve or events reflect based statements as current cause implied factors risks of upon may currently expressed future our or used statements views may Actual statements. number Because these number information available or a risks, well significantly of involve and or vary these

our recent operations, identified and most report with have other factors the our associated filings Securities Commission. We Exchange various risk and annual with

Executive Mendo President Chief of introduce Officer X-XXX-PetMed. speaker me Mendo. today's Akdag, let Now and

Mendo Akdag

brand new best us. XXth we In our feedback. to We Welcome, pet commemorate and morning. XXXX, you and website wellness consumer opportunity inspiration refresh new identity the from the a represent platform. this mostly anniversary. for logo The logo to of beginning company's on new and to came Bruce. joining embrace for brand the unveiled our you, Good brand health Thank thank

of quarter highlights third on the compare year's Now, our XXXX. ended we'll financial on XX, fiscal ended XX, our review quarter last We'll December December to results. XXXX

on third of For in same sales $XX.X to the the XXXX, order The December prior increase to was value was an increase million the average quarter were $XX.X XX, compared due compared fiscal in reorder sales. for quarter our to for year, the XX%. ended quarter same approximately $XX period million the year. $XX the sales The for prior increases

per share quarter, net to for net an of increased sales increase or quarter prior of to For prior same $X.X income share for quarter year. per diluted $X.X $X.XX income fiscal same to the $X.XX the sales compared year, quarter million or $XX.X third compared of million XX%. for the the by diluted was the million the reorder Reorder to XX% million $XX.X

strong are with reorders. continued We encouraged the

increased has of site retention and our help and customer with the new Web our platform. Our loyalty programs easy refill

New to million for period order million quarter $X.X year. sales the decreased X% prior the compared to same $X.X for the by

fiscal with XX%. in mix. the our product are quarter Spring our and increased proportion nine seasonality year. to to medications heartworm for the prior XX,XXX in third compared being of peak in considered season. business flea, off tick is and due seasons summer and the fall winter acquired approximately customers new the for However, new period sales by XX,XXX our same months, the order We The

basis points. third of increased leverage sales We XX.X% the G&A were General our to XX.X% a percent able approximately the a year were as X.X% XX prior by expenses improvement sales. to ago, compared quarter for as administrative same compared period of the quarter the sales same the XX.X% gross the to percentage and for profit an year. of quarter, was For fiscal for a

year. we're the cash $XXX.X $XX with take same was was compared had prior to quarter of months, the questions. million approximately last million months in relatively $XX to were expenses advertising the year. to the acquiring year. customer of as the For nine operations the the December costs of review. our of Advertising the to XXXX. quarter, quarter in We year. equivalent at for prior ends nine $XX.X million and compared nine and months cash This compared from a months nine was the $XX prior quarter ready it XX, the flat flat for the to cash $XX compared for Net relatively financial debt no Operator, same the $XX.X $X.X million for at inventory And for

Operator

Thank our [Operator Erin Instructions]. Suisse. Credit with Wright And from you first is question

ErinWright

the the trend for that instance with in see new the pandemic. the cohort you new customers pandemic? particularly do of the that purchasing you How during those customers anticipate two spending First, will that adopted How beyond? pets behavior for added and during were year

MendoAkdag

added by we It's that the are our seen means which the XX%, going customers which well, good that reordering, is you a increased as reorder pandemic during sales sign. have

ErinWright

numbers and to a relative terms follow-up that's as around you how program. loyalty the And of progressing to to expectations? your traction in some that or Can that speak adoption on,

MendoAkdag

Approximately XX% of in orders the being them, used fairly credits well. has it's so loyalty

ErinWright

or your other co-market thought And kind of or across question. one telehealth that platform? then around last could like services Have services contemplated platforms, pharmacy you or link you beyond

MendoAkdag

part we're the give focused year. exploring be fiscal information later on the we more them you next year and of them. We'll the in will Yes,

Operator

from with Anthony Lebiedzinski question next Our Sidoti. is

AnthonyLebiedzinski

order reasons as the in to but sales reorder why you the So down. solid would new first, were order a new down quarter? to Mando, were what obviously sales very primary sales growth point us

MendoAkdag

negatively was The our also but during peak the season. that more new it's off impacted the holidays order promotional market sales,

aggressive is advertising with the the peak we'll be more demand when So season during strong.

AnthonyLebiedzinski

sequential off step typically a margins, And bit improvement in second little there a the XQ quarter, in up year-over-year. obviously there down then so where XQ of gross between is the and season, was a versus

talk was was there about you wondering maybe I or wondering about and notable just shift between little just as just was there the RX the the between the the margin I OTC, gross credits? loyalty more? margin change business mean, bit -- impact from a So can of

MendoAkdag

a little different. the the match competitive to more was quarter, to market. compared market during to was we said, September holidays attempted the mix the be And I which as Product promotional

AnthonyLebiedzinski

And as the have credits, as about on wondering the loyalty far did gross that that of impact -- margin? just the

MendoAkdag

year promotional Speakers] quarter There discounts this were [Multiple more same the to loyalty the compared in quarter including credits. last

AnthonyLebiedzinski

to this able it, that but I not Got point. you’re guess quantify at

How So expenses, as outlook we think advertising far acquisition new as lastly that? as your customer far costs. should about for as

MendoAkdag

strong. aggressive double expenses. a peak more be I demand digit on advertising anticipate growth during We'll season would is when

AnthonyLebiedzinski

-- In next the quarter that… far or fourth as as

MendoAkdag

spring on During the in season, we'll peak conditions, what starts happens. March, the it weather see peak depends season the

Operator

from question Ben Road next with Rose Our Instructions] Research. Battle [Operator is

BenRose

is A this with relatively begin what stage that questions, and the Is complete terms assessment few improvement? in of Mendo, the to enhancements. at site of of rollout Web your the

MendoAkdag

but It by June. be of X% old design comparing testing, predicting I sales new were did is probably yet. should some We say, I the end March B A, not say completed by anticipate C, approximately would full but complete D and it some it We will completed by be sales substantially June design will completion we a the lift, B, with testing, lift. A,

BenRose

you shift number particularly has pet with your that's pet any of over would There the impact COVID. that last product Are during about adoptions much occurring? of the being months seeing mix been suggest discussion the population, that in up aging

MendoAkdag

prescriptions Product mix shifting the by to is driven veterinarians. but that's

maintenance, is beyond growth I should So is illness growing. in medications Chronic the is -- growing. There OTC prescription some coming medications are down and say.

BenRose

to Web quite while. outreach been plan your to You think know don't this? benefits know Do ability are, you that know that you this place doing them I But have a medications. is in reach formal couple have on the a one about least my let site well the veterinarian for in compound of at customer you've understood. opinion, to offer community a I

MendoAkdag

We the a compound our to We're pharmacy. not third-party it offering It's are by to veterinarians. filled customers. offering

BenRose

increasing in over Has popularity several or? the it last been quarters

MendoAkdag

it Yes, is.

BenRose

you And the to an you a customers pet terms can site, the number vet that in their customer in vet increase of have noticed directly of speak to wanting your about have inquiries on a feature conditions? ask Web

MendoAkdag

site vet to more going new is prominent. On Web be a our ask designed we

has it was design prominent. old the it not in So

we'll So see forward. going that more activity we anticipate

BenRose

I And as for PetMed as another net promoter well-established promoter merchandise question is, is score function you is that non-medication PetMed's, pet-oriented it's of branded very brand? understand there the merchandise -- brand, it, does reflecting Have have to to given PetMed the developing or a net with any thought say that. a score

MendoAkdag

medications OTC about brand. at have did do We our medications this think We not beyond time. under

BenRose

see we'll there One kind advertising a we during you in on a brand brand, And concert two then pickup way either advertising guess peak anticipating season. I then a finally, be that a and you're is, with emphasis in in Do will think campaign? the renewed secondly, if new by may increase pickup? of TV will see of I questions. the

MendoAkdag

our Yes, you year on likely from more on double advertising. budget will television We'll some last see television. activity

BenRose

of far branding new speaking. branding, to And then as kind as thoughts generally enhanced any or

MendoAkdag

Yes. advertising. refresh to Obviously, we'll our use our brand refresh in new

Operator

back showing I'm no turn I'll questions. this at to sir. And it further time, you,

Mendo Akdag

to exploring you investing wraps adding Thank today's and year, better e-commerce Thank you. This joining for platform us. of in added you. call. continue up conference The Thank customers. alternative our next ends our services. be this ways call. app We’ll mobile we'll fiscal customers the conference value acquiring service Operator, and

Operator

in participating today's for conference. you Thank

disconnect. may now You

Bruce Rosenbloom	Chief Financial Officer
Mendo Akdag	President and Chief Executive Officer
Erin Wright	Credit Suisse
Anthony Lebiedzinski	Sidoti
Ben Rose	Battle Road Research

PetMed Express (PETS) 19 Jan 212020 Q3 Earnings call transcript