PETQ - Earnings call 3 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the PetIQ Inc.

Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.I would now like to turn the conference over to Katie Turner, Investor Relations. Please go ahead.

Katie Turner

Good afternoon. us Webcast. Third joining Conference XXXX for and Call you on Quarter PetIQ's Earnings Thank

risks materially prepared you Glasman, forward-looking press reports today's annual the forward-looking Chief we financial filed discussion For company's forward-looking remarks, issued detailed in please course a release implied Executive Chairman Cord begin, management Officer; cause statements. call, and management or Commission of to the Christensen, could the within on report other expressed to federal and this and current time XX-K described and to may that will Exchange Zvi remember time expectations the note today today's that management's with involve uncertainties These for actual risks and events Chief laws. any statements those to from differ call, Please on Officer.Before from will measures. that securities of refer refer of from non-GAAP Financial Securities could during the company's on the hear materially or these statements today.Please made in differ beliefs those the meaning based statements results make certain actual and and Form from are and

GAAP. most believes for presented financial in investors, to measures a refer considered non-GAAP in the or measures with While the the isolation release is the for company provide intended with accordance non-GAAP for will information be to reconciliation these a GAAP. financial presentation financial today's accordance information prepared useful information measures to not of this in as of Please comparable substitute

turn for Christensen. presentation supplemental In that, like addition, to Cord website posted over I'd call its PetIQ reference.And the has with on a to

McCord Christensen

of quarter outlook. to Thank you, overview everyone. financial for begin the will financial results. us Katie, I'll good appreciate our and with today We an highlights, review afternoon, our key then results third joining record discuss quarter Zvi you and

Michael, questions.For expectations Zvi, to our John answer your exceeded Finally, be again. our will yet quarter, available third results the and I financial

Our The to We approximately QX our adjusted of outlook strong our margin of sales in growth execution favorable promotional to team to and our of top to in growth million. increase with and expansion been work adjusted gross raise last and and where of million, products operations. in $XX net seeing significant across million with from business full third EBITDA QX are XX%. This helping broad-based our and achieve increase to record as $XX EBITDA make a diligent product portfolio. adjusted the $XXX initiatives invest from us to of and $XXX million. line our of areas decisions quarter result leverage us highlights above include: thank in year QX of growth, to key to of for and their advertising and improve our third we fuel returns SG&A expenses investments quarter an million able the QX sales in have year-to-date helped for our achieve I'd increase the their of of of $XX.X reported dedication our services a XXX strategic pleased everyone our XX% like business of of guidance even spend was result a EBITDA. to net million, had results, our we few an support XXXX ahead net record we points manufactured and year are sales improved better-than-expected And be outlook.A $XXX hard basis

channels year, this resellers by more period. were XXXX.Turning over-the-counter operations, category. record prior continue the to of Flea growth a quarter leverage XX, capture was Product disproportionate an PetIQ's of dramatically year segment to the sales across third capital years the to working X outperformed for sales the brands across favorable segment Pet XX% growth Tick to brands as Flea on at this compared the & XX.X%, continued million, quarter company's helped Roxie online. of ] driven through and net and $XXX.X for achieve expectations the retail, nearly category & our increase Tick in X.X% Tick year.In of the brands protection is as increased higher all season over-the-counter brand broad-based Tick Flea of the At & of & from Flea strongest one over-the-counter period growth by net Armor to third brands. sales X.Xx you and increase we for and third the The grew and providing Our contributed The year us quarter QX increase parents seasons improved weather compared When Tick earnings Capstar increasingly of XX% including this of in generated basis. detail. our Flea Much in XX.X%. category. September & portfolio the pets acquisition exceptional are XXXX broader QX and categories. of helped the Products products cash reduced of the prior [ an a XXXX, top organic combined, an we also for growth the sales outperformed of had with amount this the for this PetIQ's an Rocco product fueled the XX of category look Pet & outperformed of Net online In of the last X year PetIQ's XX% in category category. of of

Tick XX.X% XXX for XX, the for year September category prior has in even its market portfolio. the trajectory Flea maintained basis than XXXX, an unit our doubled XX.X% business manufacturer over share, share we more captured years gained XX period.On surpassed increase growth & results an of also the by over brands the in manufacturing of has and largest period. greater the PetIQ as category the dollars, fast-growing year [ weeks is gaining we XXX supplement evidenced basis the within ended the category which versus compete category pet the points As The last basis, amount X the our This a quarter, now quarter. points up of prior OTC ]

Our pet XXXX, along household supplement need products trends to categories. give category continue continue confidence well come to to quarter supplement many these product double-digit to period.Strong XX.X% should growth positioned continue grew important pet in of share to consumption that the our compared very year in see PetIQ gain is accelerated years for rates in expanded penetration third us and with states these the portfolio the prior growth

are our grew that and XX.X% the [ first to addition, we leading brand ahead points in have were team pleased our Minties exited XXXX strategic In both our Luv XXXX, to we year-to-date. The fit Minties and ] And for well, then for Roxie The product the business grew share Roxie Rocco of us. of Rocco gains. XXX%.The share. portfolio, for half third QX. category and and Pur quarter the meaningful growth treat Pet Dental QX several base basis of our we very Pur has executed grown brands & determined brand and at XX% gained & XX strong offerings posted Xx Luv true in not grew of brand in a outperformed [ newest noncore ] category the offerings projections. The Remember, of better-than-expected

a for to on evidenced driving will PetIQ the Roxie in forward Rocco QX, spend investments we are Our enhanced supplements the return continue and & continue as that and & to from and other are excited growth core as Rocco focused Rocco product pet to Rocco support continue categories next We premium initial in years. more & our to great into new advertising can growth believe third pet & brands about expect very build in the Zvi brands. products expectations internal And investments Pet & are treats.We brand look prioritizing detail & consumption our we quarter distribution and as the by to needs both with our pet around the on categories give lean efforts Stain and efforts and the look extend brand premium its to the potential Stain like and the for awareness XXXX beyond.Now we Roxie on our premium outpaced Odor Across segment. advertising we to initiatives to increase over brand's Odor into focusing We QX in offerings brands, long-term Roxie and Roxie and in our see promotional categories. increase growth. QX. its encouraged of core of these success these success of their XXXX several for Services promotional

$XX.X XXXX approximately gross period as million, from net Our increase with an year margins third reported prior Services of and initiatives. segment to our profit quarter of improvement showing dollars solid XX% operational the revenue segment compared

to and to hygiene. are wellness on We focus test that we from the learn continuing X centers converted

generating controls demand. remains labor by and cost are positive, with matching take initial improved we Our traffic pet incremental veterinary enabling

variety grooming and and pilot pet We wellness and offers committed and services. veterinary are affordable PetIQ Walmart that services, a accessible care, a center also offering excited and to hygiene with of are existing partner on have collaborated to pet Walmart new including products care.Both

to are save pleased late to open on their money [ health in wellness evolving the ways offer pet and With wellness needs. location more we pet parents ] September,

We with are initial parents. together far response the and as will pleased fast continue to pet and learn from

and are opportunity optimistic about We the locations. the additional

segment close future XXX late in Services in announced earnings in to we quarter, we release, effort to today's wellness optimization profitability. the As initiated centers third improve an

the we geographic our into after cost we and focusing marketing a team decision next each $X.X of our of as pandemic labor growth, as for to centers expect strategic veterinary the of the clinics the the after million approximately anticipate brands.Our assessment wellness sales reinvesting and the growth market generate on our to since operational came net assessment and XX mobile over initiatives of market. in well months, community all savings future opened manufacturer financial primarily of which We

to record We expenditures evaluated to square also we that on the for hygiene-focused areas to hard with future office believe continues for results corporate convert that to QX potentially and able the not locations success these core closing, help incredible and where manufacturing in XXXX. the year into in to expect level look to the execute right determined employees an achieve based values align the of our high position and is total team in In of the we we and have closed to the QX, the year centers. for more mission overview, helping wellness decision appreciate our well centers experienced be remaining well available ability would distribution close our footage. a our in convert that their work in over as believe the and us our and future.With XXXX end this a date locations better returns.In strong XX as offering forward to to our and continued XXX we us we business commitment We us to like our call I'd dedication to turn We business in highest facilities to the with and our to Zvi. well future end these

Zvi Glasman

Cord. you, Thank

seeing our has our our to business results variable areas increase and generation in efforts these for year beyond.Now our reported December quarter. expand third for the more help and continued and fixed financials quarterly Our At the achieve cash of increased of record profit Products important driven business well to in our fuel we've teams increase year, margins for QX $XXX where us raise believe efficiencies extremely compared Rocco across success, results position our sales Roxie. driven profitability executed growth decisions segment outlook. detail both as will our and on expenses by in shifting XX, QX We operating all better-than-expected to made ending an last These an gross favorable strategic million, to net to to focus well and approximately to well & both of XXXX time, XX% Services and spending of from of outlook us same our the increase leverage are the our sales, We the net addition as and the have sales for returns. we XXXX. ability 'XX areas

a net to sales, year as from well the the higher categories.Third of XXX favorable product As profit as strong from across growth XX.X% Cord QX operating compared $XX.X as increased quarter year. while last shift and in leverage had mentioned, we to channels broad-based manufacturing We dollars million, XX% mix to period. gross prior basis gross efficiencies points XXXX sales on benefited margin our increased expanded product

had Services of of to increased in operating to in a were the for improvement percentage to year profit decreased $XX.X a third SG&A net QX segment compared compared the million $XX.X and 'XX to sales QX third quarter million XX.X%. $XX of last million also efficiencies Our from adjusted gross solid higher quarter points $XX SG&A expenses sales million as the as XXX compared prior basis year. was period. XXXX.SG&A

expense prior growing A&P As of SG&A SG&A to primarily adjusted in relative to continue of period. business our leverage points related optimization. basis efficiencies brand in The manufactured due a growth expenses net to to of segment decrease to we in for sales, portfolio.We investments costs leverage It's adjusted the continued recorded of year the net our SG&A percentage XX.X%, of million the a health was SG&A XXX quarter related increased long-term and worth compared and sales. quarter third of while restructuring to XXXX also that $X.X Services and the noting the support was leverage

XXXX, expenses related XXXX. quarter and $X.X in fourth million $XX.X for a of total restructuring the full of million in of of resulting additional expect year We the

expect costs million, Importantly, will and which million projected in an we the the $X.X to cash nature P&L fourth in noncash result and reflected the $XX.X which are as company's charge obligations, restructuring million $X related total $XX related to not incur of to bringing to charges of the expect balance additional restructuring lease in $X.X of million, of million.Accordingly, are costs currently settle $X.X pay sheet, to most our quarter. and depreciation expenditures to to million reserves cash cash liabilities recorded of in the total P&L amortization projected optimization the inventory are expected be we total to in

quarter quarter of XXXX. was the of million XXXX. prior company ended for working last to driven XX expect adjusted expected company cash We The total from as for for the This year approximately EPS $XX.X to optimization cash and generated approximate our was sheet The be QX third equivalents of company's the approximately $X QX the highest to loan, to costs of is generate basis centers for the cash $XX.X capital leases quarter points the term of at million and million, basis, related a the million convertible $XXX.X the XX.X%, which from $XX $XX are 'XX XXXX.From We to balance to period. for XX, million, related free Services of adjusted last of to year-to-date net QX closing expenditures And increase $X.X from EPS we income XX% cash September and of comprised in year, compared $XX.X losses our are $X.X of the generated EBITDA XXX I range cash $X.X $XX.X million $XX.X inclusive to by XX, to above a on million quarter recoup QX $XXX.X third annual in of $XX.X top capital liquidity $XX.X million. reported Adjusted earnings of net of September income had increased we profit we an compared increase or our the cash end million as record mentioned. our the despite charges related EBITDA months EBITDA the compared million restructuring debt third of million as of expect of from representing XXXX.Turning company operations total million we an $XX.X million, projected of million of $X.XX, benefits. increase the ABL, XXXX. of the from to history third third of of perspective, million was reported segment cash QX an $X.XX and as or year, adjusted in of margin EBITDA XXXX, an to increase an was was $XX.X expect XX.X% of incur quarter and operations optimization. approximate in million.We cash for well XXXX, debt, flow million its

our availability the which undrawn.Total we plus $XXX.X define liquidity, to million as on as hand $XXX addition cash In is XXXX. was cash on ABL company's million XX, September hand, debt of

While we note have no our is would that facilities ample intention of making flexible. additional borrowings, our we are liquidity and credit

up end period, year improved Keep the at and calculated of mind, third under in Our timing working XXXX, XXXX.Now facilities net tick quarter due our of some the capital, QX a higher prior the primarily our the credit will XXXX to from capital. earnings in of expected turning guidance. in net inventory driven us as X.Xx, leverage of increased was to the well our to changes to working down by start of bit X.Xx in leverage position terms potential

net For today year. we as guidance the press year midpoint will ending earlier XX, is is our outlook consistent presentation.We increase compared to $X.XX Cord and billion optimization now of in compared Services sales the in that billion, prior in are inclusive to EBITDA of we're net with release announced that Note, ranges, the $X.XX segment sales what to raising expect the we and our of December reference XXXX, adjusted I the percentages, discussing of today's and earnings XXXX. approximately discussed increases XX% presented remarks. as an This

year an of when compared $XX Obviously, an the year, XXXX. record We last for EBITDA, sales net fourth lowest of contribution for extremely flat positioned consistent items.First, the few million quarter to 'XX, sales quarter periods, and compared XX% looks and XXXX year far increase $XXX QX so you the For as to a the will representing a the implied to and math of prior straightforward the expect range XXXX. do net and excellent results, EBITDA with year. had to to adjusted it we million, adjusted on it increased great reflects approximately QX full the year with end we well EBITDA of be of adjusted

our of think was we $XX A&P. expect the total to outperformance $X as an occur well million XXXX quarter relative now Second, of of million third A&P. timing remaining our XXXX. we QX We to the $X we are recognized of and in position of we outlook we and XXXX $X in to was initiatives, you of spent as of in million for a QX, support $X expected increase us to to QX call, This million during about $X this spend in had that stated fourth and there the the growth XXXX, for on the our higher development EBITDA million strategic the finally, the sales last year, investments but on million continuing our based success which on the quarter, in be marketing from of in of spent is orders.And actually we QX with make based start mentioned the of to quarter incremental approximately continued of brands

all as your John will on Cord, mission affordable are our deliver stakeholders XXXX. it for our health and results in concludes for pet strong adjusted first of would available At PetIQ, of months to Michael, we continue convenient XX% remains approximately growth value EBITDA Operator? and and my deliver optimistic now Our and we XXXX, and quarter were and for opportunities both for items.In parents.That strategic our our these record I up not smarter, to closing, growth questions. third team for the team review. pet for about our be X financial for sales net reported execute wellness initiatives

Operator

from first [Operator Rupesh Parikh Oppenheimer. question Instructions] Our with comes

Rupesh Parikh

quarter. strong very a on Congrats

So with wanted to kick pet I it guess the just off, overall I category.

results. there So of out clearly, not clearly your that's slowdown, some but concerns a up in showing

in So the what any I'd category. commentary you're seeing just overall And even of love into terms to are you October, hear pet guys what seeing? then in

McCord Christensen

strong, over-the-counter a compete don't we've medication and lot have the coming in on ] Look, of [ seen disclosed through, we whether or strong strong, prescription touch numbers otherwise. it's had categories Yes.

pet in Michael, seeing look the a can and is for data So closer priority not add I Michael, health than to we're do. because clearly, little, do you But people, that? our watch anything you category. a probably want to that add

Michael Smith

starting trend is some an Michael. to comments, it's slowdown Animal To in. see seeing Rupesh, Health in some Yes. Cord's that area while pet. we're categories not are

brand the If Tick believe Flea you compete performed categories window. supplements treats. we're look at up we've updated, dental in double-digit a July, we as how healthy and the for actually seeing The pet and just balance healthier than category beyond perspective, momentum in And if October, the the quarter, that, look the report over in categories our those at our I August, increases we X%. above from it continued which September got up of & even

Rupesh Parikh

center just there helpful. way a And year, loss and Is That's to perspective? optimization. QX related then revenue Great. into service next just the quantify for from impact a the modeling to

Zvi Glasman

Do with or... you numbers get that

McCord Christensen

Yes, Zvi. go ahead,

Zvi Glasman

sales expected year $XX sales We're lower so of the of year, million. is we next seasonally $X about and this a loss $XX a always business. of QX of part and look, approximately million million Yes,

Rupesh Parikh

ready such you ] curious puts in your And final could Okay. era outlook. in lapping Great. just [ But this at any highlight juncture? next know comfort maybe takes And you then then XXXX strong aren't your I for question. and this year. to one give guys initial growth

McCord Christensen

year, we had extremely strong have, Yes, a I situation think obviously, pace this where weather. our we like

every we've never second strong we that strong As And had the project it happens, happens. the have if weather third for We to year. seen weather a in quarter as it quarter. be

conservative going we'll relative that So definitely XXXX. be into to

XXXX run We look other what lot in great that We we you think the are, things understand as It'll there of next led more pull when in have have we data give that to to things year had going we've general, at is. a we've next strong up, once and I be year been update we base, since this to But right, see great a get it.But as we're definitely growth next year. of and extremely have in an we'll to year. a kind every recovery back, that and expect of weather general, quarter, of we're category. guidance but inflation recovery going we as years we'll what rates I there. what be we into caused and going think again, in base be to We year. to to a kind in the also a the the the we're had, get and Flea ready are on year, weather And that consumers understand not saw at get of the had think, got year and line I dig how year definitely some our it's & for performance updates this we year, the we'll XX weather performing because the OTC into we've conservative Tick

Operator

with question comes Chappell Truist from Bill Securities. next The

William Chappell

on congratulations quarter. the Also

next A&P reinvest the First, of just trying to from rationalization to the both savings the fourth understand into kind cost the plans in in reinvest year. and quarter

sales? quarter, there program understand, push the of go? next it do I the Flea Or Or largely over, could in on it something? to Why just not does going mean major now? trying some With missing Tick money promotion & I'm And am a is with why benefit big that season or where fourth I quarter year? that fourth towards kind

McCord Christensen

to, started as see A&P, that. we QX sales We're into we a push of properly, the year going to with to brands the We match and start Bill, for will that investing that funnel, to very, which to conversion. ready drive to we top and of A&P awareness. that little start of We're drives in of in have invest next we're it think, properly. conversion shows into we our to in that to top Because number we into and ability drives once starting benefits way. in opportunity positive to QX, to lead goes our a funnel our to Typically, starting We're an continue it we're investing think which definitely drive know, year, then brand to more very working. awareness get but really the from obviously, ability build year. And QX this drive tracking you see next obviously the heavily will build be

we're can conversion to that to to want into that we starting it. of continue brand where And do drive get we season. top So momentum really the that's that funnel, and the something to the support brands fortunate get we're, we as awareness drive again, and then

William Chappell

And it. on... then Got

Michael Smith

to on that, Bill. Just build

Tick you at note important to all to I think of largest revenue. it's our that not XX%. it's to our but & closer QX, our Flea when revenue, is of category, close XX% it's And look

be of most where have where into QX actually quarter there the dog So actually categories our for area we the inverse opportunities with aren't the Minties will is that portfolio white at look it's category. we leaning treat category, largest building the profile. that well. an And it's are space compete year we in brand that the and as seasonal with that And if you

William Chappell

get to sure dog for make some stuffer. I'll stocking it. my Got Minties

So understand. I

rationalization, of two model? On locations? back you these would I on Services guess, expect stores clinic the them the I I actually and pet 'XX? to side, Tractor One, can in assume that hygiene locations you the earnest are revenue implication left of in suitable down are that start Would for to recoup road? you the to expect some mean or questions. or Supply available are then And that small stores also so mobile some go in the XXX the

McCord Christensen

and ready extremely well. have to about first, ability We're services going do the in of locations not that. XXX about positive things how more and definitely think general, Yes, Bill, are Things we're are left converting I declare add stores start are tons going. those to victory

there's you stores small look into If recoup a business. we're at percentage can think closing, actually that pets we clinic the community the the

financials we we'll coming it model, money But that better and just them that we if we that we of do simple. great, back it can't a can't COVID if to the we're out if aren't so we investing convert some lose we get the And definitely It's hygiene had permanently. to do veterinarian, to return. get the had into get a put things to what know of

Operator

The William Andersen Blair. Jon next from comes question with

Jon Andersen

year, bit talk with of quite or time I you guess, had about, little a resets conversations you've on the by 'XX the retailers this few Could resets. early spring a

distribution? if be well. of front those that wondering And on that, kind of or as could what perhaps the worth on innovation mentioning notable might terms in the expecting you of Just comment discussions, incremental tone you're anything the

McCord Christensen

I'll can retailer it's Jon, talk reviews you, let whether Michael. back take Michael for innovation at and the ahead, I go [ them then about ], but and line

Michael Smith

some I do Tick category would further largely say line are done. a category depends our distribution with for right from moderate Flea Yes, perspective, we're some by I happy and reviews expect those We penetration now results. of say, gain, it & some leaning very about sizes. tertiary in are some brands a partners wellness that our of initiatives into how Health encouraged process, the but in pack some space. retail and and additional kind of our of still is bit little new

of then play will the volume best and the portfolio that of year in category. making about ] very [ candidly that in excited well of our treats, placing us for of to know, that partners momentum X/X lot for next we're we're XXXX.And consumption. very which Minties you out as category portion continue on encouraged the a that for the voting we're have behind vote we portion where in allocation are biggest that lives, us brand in for plans Minties the in a the category the launch plans, they promotional We investment of Customers position about seeing today. in is retail up premium lay category, that that on retail for once that shelf category. value-oriented XXXX partners We're market innovation the their about and hits piece brand proportionately space primarily proposition the are our in and As

XXXX. win a So the to us and how of think some net we positive the our definitely about be we'll are positioned for retail partners parts with as customer in

McCord Christensen

watch year we're where been to innovations have leaning built we're around general, winning, say, year. would in great we've we'll in we're I where it, Jon, And been have a and next winning, able the just

Jon Andersen

Okay. the economic us ] kind wellness any comments, incremental brand And -- from with business, limitations up the and required been perspective, little how And finally, that on in Services, now can that is Walmart. what your a with from of in or and you good manufactured collaboration model differs that be until your the you've about maybe more talk seeing for that just all about demand? with support CapEx a centers doing the remind any [ release you're you you bit growth then to of press why with or might in prepared Could mentioned Walmart what better that a you? capacity

McCord Christensen

would area an really the we've with do in always a of we're investments need general, think and done. front capacity be that. to to we brand, get keep a run in to growth keep where say in aggressively pursue amount in with When access have and going in I strong rates go to what I Look, with in of good shape up what we say, stayed molds to front equipment to we But the very next year in the the needs we've stay up keep that. of need out plenty can of capital to capacity like had minimal things up and that's and surprised with we place we Minties with with

closest John, good the really the project. you're in we're to So shape.Look, Walmart

be want about you talk and great. it, update, If would that an to give

John Pearson

This is John Pearson.

think referencing I was here. he Sorry,

entered we program. project the The is, Walmart partnership We've year it's initial working main pilot. difference been this the Excited a now. have Walmart. launched on to a branded with for into about So

So they pet the are the the ones location. that driving are to parent

On necessary. attention that the and the the main draws veterinarian That's the facade difference services, and to external labor now. them external, operator also bring equipment with they with investment model we're be an to the in an to staff made really the the right and and the partnering

Jon Andersen

think John, unfold, next And it's well over XX expectations how it XX location -- do months? one for are to you what -- -- the things in is might I if your now? go this

John Pearson

that, there, see one And of on [ success we're we're we the now, the future more but location, privileged as on it. not with of pilot decisions. Right information that share we'll and outside we'll work focused Walmart to any ] Yes. expect closely close on keep

Operator

Lawrence Our Instructions] [Operator next from Benchmark. John comes with question

John Lawrence

the criteria? you the crux be Congrats Or some just it talk just board? Could of what what again rough you stores sort Was for across give quarter-on-quarter. a the about of the a either just little -- just ]? the you it bit regional? [ Was criteria Anything cash flowing? not close, was elected to kind the would can

McCord Christensen

a we make I all we you those Yes, a market. patient know, We during could with to out closed stores of locations good data do John, good COVID We run get to came think, to very different COVID. as were set decisions. the

if we year do going great That model was couldn't It spending a to to time be different. $X we that's has be a progress. a we something weren't add market, we lot criteria.So on you good we to million the we time. on things was that's financially, can something feel veterinary have put it, because and we access you at different. to a in on the couldn't of We when things, and As look, where accelerate position what like And going business seeing hygiene for get of do to to a if not right. we of or providing was areas return. if And to gone the main a good long going that other the labor you're have have into, have where it look and million other veterinarians handle return, something market just a had $X in

it really a I is. more the and places lot the So that's put that's crux, make what money. think that We just we can have money

John Lawrence

dark you work like it the compared on that side, would the there old secondly, -- a when Is but just at the half model the fair, any model? XX% to be in mean something like you and the here at look more Services shot of revenue, I the cost look And close? new is model

McCord Christensen

I that. wouldn't say Yes.

seeing And is, to you for a up market we're have able to do to the where we're we're place with labor the what with model, our bring have in when marry really we veterinary that ability And general, really into pets centers. that. model wellness the in demand strong hygiene think clinics. our mobile trying I add you

pet. comes of that's And sure the it the in there or are hygiene do day, labor have P&L, at they they a the of them do start needs we to when can pets, pets taking overall have need to very there, when -- so to and down what taken they both pay so keep making it care end the and they're And pet ability well, their need the when there, really want care ability at P&L extremely the whatever no put it's of with when think the the we you the we the veterinarians very really they model labor what for to have what is relationships, similar, parent we the stores, unique to. have what vet building that.And look for and but they want services for

John Lawrence

question for Last me. Great.

that leverage? mix? just gross As margin? Or of up that points, of scale basis gross most what's is main we product is all driver know, the it XXX Or

Zvi Glasman

to operations on it efficiently as also to more is efficiency. at we efficiency look just then ]. mix operate it's [ It's but describe Part some of a -- and And work word is use some to the increased scale. continue making volume, our efficiency

Operator

Cord This any I closing turn would concludes for conference session. to our remarks. over like to question-and-answer Christensen the

McCord Christensen

such such everyone appreciate after a into ] our that year. everybody. hard We having when We gone you the PetIQ appreciate to quarter. a you the reporting the we us let partners for work. full year all for Thank and today, you forward [ strong of to employees to Thank thank great We and first ability joining deliver look to Yes. talk Thank you result. the us the have you.

Operator

The concluded. attending presentation. conference for has you today's Thank now

may disconnect. You now

PetIQ (PETQ) 7 Nov 232023 Q3 Earnings call transcript