PetMed Express (PETS) Morgan Stanley 22nd Annual Global Healthcare Conference summary

Strategic vision and transformation

• Focus on transforming the business to remain relevant in a large, evolving market, emphasizing digital modernization and customer personalization.

• Expansion beyond Rx to a balanced assortment including OTC and food, aiming to meet broader pet health needs.

• Consolidation of PetCareRx acquisition, integrating operations and processes for efficiency.

• Reestablishment of a retail-expert C-suite, with ongoing search for a new CFO and building a strong management team.

• Plans to expand private label offerings and partnerships with brick-and-mortar and marketplace channels.

Product and customer strategy

• Emphasis on creating a seamless online experience, improving product recommendations, and launching a new website.

• Focus on balancing Rx and OTC products, with supplements and complementary items to address full pet health.

• Autoship program is a key retention tool, now at 56% penetration, with ongoing enhancements for flexibility and customer control.

• Data-driven segmentation and hyper-personalization strategies to target new and existing customers.

• Expansion into equine and deeper engagement with veterinary professionals to align with market needs.

Market dynamics and partnerships

• Direct relationships with most manufacturers, with some distribution through partners like PetIQ.

• MAP pricing environment maintained, with broadened assortment to offer accessible price points.

• No significant supply chain disruptions; domestic sourcing has ensured stability.

• Veterinary advisory board provides insights on innovation, prescribing trends, and chronic/preventative care.

• Exploring deeper engagement with veterinarians and improving vet portal for prescription approvals.