PetMed Express (PETS) 6 Nov 242025 Q2 Earnings call transcript

Greetings and welcome to PetMed Express Second Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder this conference is being recorded. It is now my pleasure to introduce your host Reed Anderson with ICR.

You may begin.

I'd Express welcome earnings fiscal and to here conference operator, PetMed the second you, like everybody to today call. Thank quarter XXXX well may our of the of currently statements that assumptions forward-looking used of Securities us. a as XXXX information will number Securities included risks beliefs amended Act this Certain are based Exchange that the Act involve be Litigation Reform uncertainties. These statements as have based of meaning information call within as and the XXXX on Private and we during upon include to may available these Because assumptions. Actual these results current projected. concerning and statements materially differ future from those statements events, our reflect could uncertainties involve risks, views realized should operations update respect There presentation any in forward-looking or regulation no to can applicable any or obligation as business relied or any the condition law, on be forward-looking matter be that competent undertakes nothing be be is and no financial this assurance or or or subsequent required as as matters, events, including to results publicly authority. warranty by a upon future in representation may of except of contained these legal occur will based statements PetMed's. PetMed's various recent factors in and Securities identified other our filings the our with annual operations We've risk associated most with and report Exchange Commission.

President, Now, call to Sandra? Campos. Sandra and let the CEO turn me our over

Thank joining and afternoon. call Reed, you, welcome everyone to this our

become financial pet's Through developments leader expanding and in reemphasize and and We be steadfast in initiatives priorities I've we our detailed achieved that the in our aim strategic, that enhancing adjusted and in longevity. I provide am our on consumer more time open gross long vision results, supporting will and increase we've our overview partners Robyn wellness for focus floor which healthcare. targeted year-over-year and remarks, a role I operational margin six the the been positive operational on our my sharpened questions. quarter. initiatives, to of essential we'll this to term services, Following several and after PetMed report pivotal their products PetCareRx improved pet CEO strategically to pet for a months repositioning to sequentially million financial success. EBITDA. for remains a focus parents, $X.X sequential and that pleased to them are want to and core

our These an operating annualized million track expenses on G&A $X earnings financial share financial focus priorities of in increase and cost underscoring foundation the to and on we initiatives efficiency Additionally, declined operational savings net building significant impact which in our progress, our with strong commitment made growth.Beyond a the for in strides reflect on income we've to excellence. to our cost long improvements operational deliver plans term contributed strong key last quarter. and as a strategic reduction communicated are per and

First, team. our management

where role our years operational discipline, our during addition PETS. in the from aligns rigor our perfectly into she the and growth, With accounting leadership over experience dollar Beyond, at of played Bath Bed of CFO, mid-September, complete. a objectives with multibillion helping expand retailer expertise enterprise. sustained a exponential Her financial national company technical periods strategic of from now financial brings key D'Elia, Robyn who executive in refreshed team joined XX & a Robyn is new regional

consolidation cost optimization. both the and across streamlined and largely report complete. initiative that functions resources pleased and I'm PetCareRx continued across this is PetMed's We Second, of organizations to

in QX. $X annualized the margin million achieve to track in with to that savings contributed outlined on we're we cost elimination of mentioned, and the previously As redundancies improvements

expenses for going structure lower to forward. assess cost additional to and opportunities expect reduce continue base a to we operate We cost our at

excellence. operational Third,

gains by value touchpoint. a stronger in early excellence this and shift ongoing operational and an efficiency margin quarter. greater centric customer including These focus gross we're encouraged customer across a indicators year-over-year average early towards is across reflect every order organization on initiative, While value. We wins service in seamless the prioritize

center. call customer our instance For

have Trustpilot of Our providing as rating Caroline led customer October been versus the vigilant at leadership team X.X a The stars of on June. to experience. customer Conegliano's has end X.X-star beginning positive a under about improvements

and While and able while We XX% staffing upskill we phone enhanced improved our tech have stack strengthened service third still reporting, with cybersecurity. been enhanced our training central routing and data quarter, rate improve fill architecture, pharmacy have to opportunities we added model business on by during the focusing to increase abandonment levels upgraded intelligence agents. Technology.

PETS, also of a to increase X%. Rebranding. with strengthened quarter flow prescription our we our by veterinarians, which relationship a user for This redesigning led critical stakeholder has

updated tagline now brands. is across PETS You reflected the Our Trust Care

have of We brand color and imagery new a platforms. Modernized inclusive visual website. look and a all on voice new

the and to all Later planned expeditiously this navigate modern enhanced capabilities find QX. with and Our worked and proud go design. quickly along experience products development under partner I the are recommendation Now, UI more Buy of an Encora can personalized, leadership a stable site mobile journey. website has cross-sell easily in a tech enhance adding UX who interface to which engine, our experience with been user to foundation, shopping streamlined solutions, partnership product we relaunched now purchase app, AI am in of with live Pay updated deliver software platform. With The solid by an the provides Sripad's upgraded customers team upsell enabling Umesh new

value. quantify increased related anticipate all While rates it's positive we to early trends KPIs, rates, bounce of including lower and still conversion the order higher

company, we to set consumer align while and stage launch by redundancy more for a which We've healthcare to improvements shopping our intent recurring and needs. on assortment we of products, exclusive Friday. These focused reducing product growth closely stay new phase with before refined plan customer's our our to the demand consumer foundational adding next several As closely Black attuned initiatives. pet focused

to here. our in spend retention with along gross customers. After acquisition emphasizing we're and role and a increase operational now investment QX pivotal marketing new in play customer to will marketing lapsed upgrades First, prepared reengaging drive QX,

focus month rich SEO customer pethealthmd.com will new driving later our content, launching new on Next, additional growth. content this educational site, and

ecosystem Additionally, that customers. through growth expand our our Vetster, gained strategic evolving our positioning services. insurance well-being market include key needs for and we've these understanding are to pets These pet strategy. deeper grooming telehealth term Through long and of partnerships efforts, our and the longevity a of of currently all

who Our the The stellar with of business pharmacy our value remains lies expert the technicians in company. of decades of differentiators. with unique our pharmacy experience strategic licensed PETS pharmacists have and advantages RX one

XX competitive auto-ship as all revenue and value to a a long We and advantage. Importantly, term our for create pharmacy us gives licenses prioritize our means across convenience recurring customers drives states our shareholders. that

of and mission value proposition, opportunity broaden knowledge pets be center healthy over aligns of a the our at our XX-years business to developed enhances continue RX live to expertise we our nearly positioning as with happy a growth the company. This and substantial and healthcare our see of millions pet potential deep trusted With trusted and consumer We've helping lives. customers. by

shareholder indicators turnaround clear the company will profitable are the early key to on that path take we and While show to value. time, restoring increasing encouraged growth a we're by the

ecosystem need our are states product financial Before and our discuss between financial additional to I back resources to the were that efforts more we improving welfare. With after in in animal our time organizations to nearly results local September conclude PETS our across team, are shelters we and our and communities to These their of located hurricanes and animal contributed the to my in vital by our to remarks, providing will experiencing appreciate customers, want locations acknowledge turn over extended At rescues October. home commitment support that, and Florida are shelters supported I that greatly a state distributing it of back of I financial impacted. Robyn to various proud part in and donations detail. have

departure. quarter improvement processing in expense investment $X.X basis transaction was The lower and period continued XX $XX.X were consumer decrease. Sandra. was lower Also payroll to Sales I year was the new profitability. Gross which same million were contributing an to you, a related year by basis driven will XX.X%, welcomed favorable to XX,XXX million $XX second primarily to based reflecting a second provide prior due as a million administrative the stock XXX payroll the was fees professional in decline discount XX, expenses margin as year, quarter XXXX. fiscal offset for an compared by Thank quarter. sales intentional XXXX and We the for respectively. as $XX ending our this approximately update profit rebalanced versus last expenses the customers million in as compared activity. General million well to lower executive to year-over-year a fees. Included on last for XX.X% up million higher second year benefit benefit year-over-year tax sales and $XX partially a were this September were period reduction decrease compensation results XX% last marketing increase points related settlements year This of for sequentially. in G&A improvement an the and we Profit year, mix point margin quarter pressure for primarily and quarter and $X.X an gross the now and

of million we in diluted compared gross to diluted The or go-forward continued of as this last adjusted year. for quarter net to XX% reflecting by reflects $X.X sequentially share was second basis, rebalanced loss expenses or million $X.X the intentional on the EBITDA quarter, the million profitability decrease improved $X.X solidified million EBITDA $X.XX driven cost were tax $X.X $X.XX reported our second prior in quarter. Adjusted was year reduction million million income same the $X.X our period improvement marketing $X.X brand and latest strategy. Net investment $X.X net per reduction in income per the million in benefit quarter for and for advertising progress $X.X income an last the initiatives. share Our first compared a to million in versus we the year. compared On mostly a period for spend

million strong to after the provide Our September and no for had balance we would like $XX debt. We and equivalents questions of some will Sandra cash remarks. of then and that as and call Operator? XX, concluding sheet XXXX open cash remains now

your question. Please with with Instructions] first Ryan Street comes [Operator Our Capital. question Meyers from proceed Lake

my for questions. Thanks taking

First think guys directionally, growth of seen we think should marketing the year? half of second stabilization investments, you're know in how but digit about of quarters I sort don't double growth should top decent know just I any rate one we guidance, revenue a guys two half year? the of you making if the give and the in the the business? aren't how Have line you decline, the about amount second the guidance the we but maybe for of think about me. of consecutive giving for rate

Yes, for thanks question. the Ryan asking

of So full first we and now the will in funnel of the happen all, the the products the pushing we goes after for spend, top fourth and that through well activities marketing around focused are reduced customer differentiators the bottom our from acquisition us as intentionally holidays. we to our QX, which will take all we as product along That third the awareness as transactional the brand key campaign quarter. funnel quarter, which mentioned, of have, but will going straight focused be and key that

really the stabilization growth. it's lapsed about we customers, customer we on focused are look we on our we where focused to now, new the retaining and as customers, So now of

So we're a really accelerating QX into the QX. pushing going marketing that we period that's and time QX so increase go in efforts of QX, into be as more substantial from where all our there'll starting

came a margin about how think for be that any Okay, the the at came healthy. margin going to the for for the gross gross where rest kind QX? should at quarter the QX quarter, and Maybe got look sustainable look year? thinking from changes obviously and rate we forward? it. should Should that how of Is in that And as of going we then at about there pretty we

Yes.

quarter But points. I So think gross as you was gross heavier indicated. trending, basis And margin is look quarter, indicated perspective. a historically, is QX we a margin lower heading - it Sandra up promotional into we're if period, at as our a for from the XX

our knowing past I going would that in So trending just think follow of in we're our invest heavily more just I the to marketing. kind

business. from And ordering me. Thinking that, products Customers some the customers impacting competitor. about macro Walk of products seeing as the you're have kind just is maybe as a different then for question many ordering not are last as of through us they dynamics many before. it

those. through us of kind Just walk

very onto have customers site. spending The codes comments the ask the pressured. time it's seeing or we on the coming questions they're call and feel and customer through is visits and our we're consistently, That site they're whether the promotional something that as for center that

Additionally, if when we a competitive been set, that's has you lot a very just we at promotions heavily conversion look have promotional when time more it do during and those have actually our across periods. environment,

know us more codes that more and So for and promotional telling we customer the showing looking are products. heavily us is discounted they

So we're own veterinary as believe, and medication as that continue the are that been there board, with as pharmacy overall. in getting as calls they've as seeing, that the frequency not our customers speak definitely well the reducing our veterinary the veterinary clinics not relates as but and not to to clinics they're and from the compliant we past it are only they to do we're we both also advisory within -

So that more. definitely we're new acquisition. and focusing us the a on bit impacting customer customer why that's new the But is growth now

question-and-answer This I of the turn back it concludes for portion closing to remarks. our will Sandra now call.

Thank We PetCareRx. appreciate and really your support. thank interest you And time you. in PetMed's and for your

our I new thank in stages still of during experience, key customer all we and new many we're for improve for our understanding very do and commitment will wellness, conference their our and you look drive progress their our of customer rapid steady and updating measurable mentioned, next to on on of early call, discussed we growth have pet made mission, you We that transformation, progress employees and the to improve profitability. I as initiatives Although execution of our our want dedication to ongoing and priorities. today their and core health forward much. the the passion thank

today's This teleconference. concludes

for You your lines at Thank may time. you your disconnect this participation.