PetMed Boosts growth strategies amid prescription sales decline with new partners and cost cuts

PetMed Express is focusing on technology upgrades, strategic collaborations, and cost discipline to regain growth after a quarter of declining prescription sales, as it reports a narrowed loss and stabilising revenue.

PetMed Express said it is leaning on cost discipline, technology upgrades and new partnership channels as it tries to restore growth after another quarter of weaker prescription sales. In its fiscal first quarter, net sales fell 19.9% to $41m, though revenue remained above $40m for a third consecutive quarter, which management described as a sign of stabilisation.

The net loss narrowed sharply to $6.1m from $34.2m a year earlier, helped by the absence of last year’s goodwill impairment charge. Gross margin slipped to 27.6%, while adjusted EBITDA worsened to a $3.4m loss. But general and administrative costs fell 13.5% and advertising spend dropped 30.2% as the company cut underperforming media.

Chief executive Leslie C. G. Campbell said PetMed is broadening customer acquisition beyond traditional advertising. Recurring sales rose to 61.5% of gross sales, while new customers totalled about 70,000 and acquisition cost fell to $60 from $71.

The group also launched a co-branded online pharmacy with Rural King, covering 150 stores across 17 states, and completed an enterprise-wide SAP rollout in May. It has also agreed a $37m sale-leaseback of its Delray Beach headquarters and distribution centre, and is still reviewing an unsolicited $3-a-share cash proposal from Silver Cape Investments.