Mat Hulett, the CEO of PetMeds, stated the following in his 2nd quarter earnings release:
"We were pleased to see revenue begin to stabilize this quarter after multiple quarters of decline," said Matt Hulett, CEO and President. "This mainly reflects the continued growth of our AutoShip & Save subscription sales, which increased to 39% of our total sales for the quarter from 34% for the prior quarter."
Instead of being everything to everyone, they are likely focusing on a particular segment of the pet care market. Many companies, like Chewy, are trying to be everything to everyone. It's like being in an army and trying to attack another army straight on. You might as well roll dice. In the movie "The Patriot", the American's beat the British by fighting on their own terms. This entailed ambushing segments of the British's forces, fighting behind cover and using surprise. The Brits wanted only to fight straight on in an open field. The Brits didn't like it, but, hey, it's a war.
Most companies will go after the TAM (total addressable market) instead of a defined segment. This spreads out their "forces" too widely. PETS is likely going after a stable set of the market that will not require excessive care (think increased expenses). The sugar that PETS is offering is a discount for auto shipping. And, those customers like the sweet taste of sugar!
Sure, there are a lot of moving parts for this company to address. Their operating expenses have been high as a result of bringing on high cost talent. Their stock options have been high to incentivize those folks to come on board. They are trying to build an inclusive culture where benefits are spread more widely. They are likely working getting buy-in from employees versus forcing executive management’s ideas down on employees. People want to be part of something successful where they have added to the success. They are integrating an acquisition that is expected to add more value than cost.
The plus is that they have lots of dry powder in terms of cash on their balance sheet. The key point is that they must spend it wisely.
While the numbers haven't shown an upturn yet. When isn't it darkest before the dawn?
Be smart, be well-read, be aware and be successful.
“There may come a time when you believe you have reached the end of the road in the darkest night. That will be the moment when a dazzling new day dawns on your horizon.”
― Anthon St. Maarten
