PetMed (Nasdaq: PETS) shares rise on better-than-expected results

Orlando, FL 1/23/12 (StreetBeat) -- Shares of PetMed Express (Nasdaq: PETS) rose Monday after the company reported better-than-expected fourth-quarter sales of animal medicine, primarily due to a rise in online orders.

For the period ended Dec. 31, the company said sales rose 12 percent to $50.5 million, compared with $45.1 million, in the prior-year period. Net income was $3.9 million or 19 cents per share compared with net income of $4.5 million or 20 cents per share. That represented a 3 percent decline, which still beat the average estimate of analysts surveyed by FactSet, who expected earnings per share of 16 cents on revenue of $44.7 million.

The company attributed the increase in sales to higher online purchases during the period, which increased 19 percent to $38.7 million for the quarter. CEO Menderes Akdag said 150,000 new customers purchased animal medicine from the company in the last quarter, an increase of 35 percent from the prior-year period.

The increase in new customers outpaced the company's advertising expenses, which increased about 23 percent to $5.4 million. However, the cost of winning each new customer actually decreased, from $40 during the fourth quarter of 2010, to $36 in the most recent quarter.

Shares of PetMed Express Inc. rose 15 percent, or $1.65 $1.88, to $12.92 in early trading.

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