PetMed Express (PETS) Q1 2027 earnings summary

Executive summary

• Net sales for the quarter ended June 30, 2026, declined 19.9% year-over-year to $41.0 million, driven by lower prescription medication sales and reduced new customer acquisition, but sales have stabilized sequentially.

• Net loss narrowed to $6.1 million from $34.2 million in the prior year, mainly due to the absence of a goodwill impairment charge and reduced expenses.

• Adjusted EBITDA was negative $3.4 million, compared to negative $2.7 million in the prior year.

• Management implemented cost reductions in advertising and operating expenses to address ongoing losses and cash flow challenges.

• Major technology milestone achieved with the rollout of a new SAP ERP system.

Financial highlights

• Gross profit was $11.3 million (27.6% of sales), down from $14.4 million (28.1%) last year.

• General and administrative expenses declined 13.5% year-over-year to $11.2 million.

• Advertising expenses dropped 30.2% to $4.2 million, and customer acquisition cost reduced by 15% to $60.

• Cash and cash equivalents stood at $13.1 million at quarter-end, down from $21.4 million at the start of the quarter.

• Net cash used in operating activities was $7.7 million, an improvement from $12.3 million used in the prior year.

Outlook and guidance

• Strategic initiatives and disciplined expense management have improved the foundation for future growth and sustainable profitability.

• Management expects continued impact from macroeconomic pressures, increased competition, and changing consumer behavior on revenue growth rates.

• Sale-leaseback of headquarters and distribution center expected to close in Q3 FY2027, providing $37 million in liquidity.