PetMed Express (PETS) Q2 2026 earnings summary

Executive summary

• Net sales for the quarter ended September 30, 2025, declined 23.6% year-over-year to $44.4 million, with a similar 23.1% drop for the six-month period to $95.5 million, driven by reduced advertising, higher promotional activity, and lower prescription sales.

• Gross profit fell 33.9% to $12.4 million for the quarter, with gross margin dropping to 28.0% from 32.3% due to higher freight and promotional costs.

• The company recorded a net loss of $8.5 million for the quarter and $42.7 million for the six months, compared to net income of $2.3 million and $6.1 million, respectively, in the prior year periods.

• A $26.7 million goodwill impairment and $0.6 million trade name impairment were recognized in the first half, eliminating the entire goodwill balance.

Financial highlights

• Reorder sales decreased 23.2% to $37.4 million for the quarter; new order sales dropped 26.5% to $5.3 million.

• Membership fees declined 21.5% to $1.6 million for the quarter.

• Cost of sales as a percentage of sales increased to 72.0% from 67.7% year-over-year for the quarter.

• Adjusted EBITDA was negative $2.3 million for the quarter and negative $5.0 million for the six months, down from positive $2.1 million and $0.6 million, respectively.

• Cash and cash equivalents fell to $36.1 million from $54.7 million at March 31, 2025.

Outlook and guidance

• Management expects continued macroeconomic headwinds, including inflation, higher interest rates, and consumer cost sensitivity, to impact revenue growth and operational performance for the remainder of fiscal 2026.

• The company is focused on operational efficiency, cost savings, and liquidity management to navigate ongoing challenges.