PetMed Express (PETS) investor relations material

Executive summary

• Net sales for the quarter ended December 31, 2025, declined 21.7% year-over-year to $40.7 million, with a 22.7% decrease for the nine-month period to $136.2 million, primarily due to lower prescription medication sales and increased promotional activity.

• Gross profit fell 41.4% to $9.5 million for the quarter, and 32.8% to $36.3 million for the nine months, with gross margin dropping to 23.3% from 31.0% year-over-year for the quarter.

• The company recorded a net loss of $10.6 million for the quarter and $53.2 million for the nine months, compared to net losses of $0.7 million and net income of $5.4 million, respectively, in the prior year periods.

• Adjusted EBITDA was negative $7.6 million for the quarter and negative $12.6 million for the nine months, reflecting significant operational and non-cash charges.

Financial highlights

• Cost of sales as a percentage of sales increased to 76.7% for the quarter, up from 69.0% in the prior year, driven by a $2.1 million inventory write-down and higher promotional usage.

• General and administrative expenses rose 13.1% to $12.2 million for the quarter and 50.3% to $39.3 million for the nine months, mainly due to higher stock-based compensation and professional fees related to an internal investigation.

• Advertising expenses increased 26.7% to $5.3 million for the quarter but decreased 14.2% to $15.7 million for the nine months; customer acquisition cost rose to $90 per new customer for the quarter.

• Depreciation and amortization expense was $2.4 million for the quarter and $7.0 million for the nine months.

• Cash and cash equivalents decreased to $26.9 million at December 31, 2025, from $54.7 million at March 31, 2025.

Outlook and guidance

• Management expects continued challenges from macroeconomic factors such as inflation, interest rates, and changing consumer behavior, which may impact future sales and profitability.

• The company believes current cash and expected future cash flows are sufficient for at least the next twelve months, but longer-term liquidity depends on operational performance.