PetMed Express (NASDAQ:PETS) reported a 19.4% decline in fiscal second-quarter sales as lower prescription medication sales and increased promotional usage weighed on results. The online pet pharmacy narrowed its net loss, but its adjusted EBITDA loss widened from a year earlier.
On his first earnings call as chief executive, Jeff Willard said the company is shifting its focus from stabilizing operations to fixing its core direct-to-consumer pharmacy business. Willard, who joined PetMeds six weeks before the call, said the goal is to make the company profitable at its current size before returning it to growth.
“Rebuilding customer relationships in a competitive market is a multi-year effort,” Willard said, adding that he sees a credible path back to profitability and then growth.
Sales Fall as Net Loss Narrows
Net sales for the fiscal second quarter of 2027 totaled $35.8 million, down from $44.4 million a year earlier, Interim Principal Financial Officer and Chief Accounting Officer Doug Krulik said. The decline was driven primarily by lower prescription medication sales and higher consumer promotional usage.
Gross profit fell to $9.8 million from $12.4 million, while gross margin declined to 27.4% from 28%. Krulik attributed the margin decline primarily to unfavorable product mix and lower manufacturer rebates as a percentage of sales, partially offset by lower net freight costs per order.
The company posted a net loss of $6.4 million, or $0.31 per diluted share, compared with a loss of $8.5 million, or $0.41 per diluted share, in the prior-year period. Lower general and administrative and advertising expenses helped narrow the loss, partly offset by lower gross profit.
Adjusted EBITDA was a loss of $3.6 million, compared with a loss of $2.3 million a year earlier.
Marketing Costs and Customer Acquisition
Advertising expenses fell 52.3% to $2.1 million, reflecting reduced media spending and the elimination of unproductive spending, Krulik said. General and administrative expenses declined 15.6% to $12 million, largely because of lower non-operating professional fees and severance costs, partially offset by higher technology expenses.
PetMeds acquired 41,000 new customers during the quarter at an average cost of $51 each, Willard said. That cost was down 32% from a year earlier and 15% from the preceding quarter.
Willard said the company sees opportunities to further reduce acquisition costs while improving customer retention and website conversion. Its plans include repositioning the brand, improving marketing efficiency and simplifying the path from search to checkout.
Pharmacy Focus and Partnerships
Willard identified generic medications as an opportunity to offer customers lower-cost choices while creating a potential margin benefit for PetMeds. The company also plans to maintain a full assortment of pet medications while curating its selection of other products, including food and accessories.
PetMeds is extending its pharmacy platform through white-label partnerships. It launched a co-branded pharmacy with Rural King in July and has since added Pet Supermarket as a second partner, Willard said.
As of September 30, 2026, the company had $11.4 million in cash and cash equivalents and no debt. Krulik said PetMeds continues to work toward a transaction to monetize its Delray Beach headquarters and distribution center on terms that reflect the property’s value.
Willard said the company plans to share performance indicators to show its progress against the growth strategy in the quarters ahead.
About PetMed Express (NASDAQ:PETS)
PetMed Express, Inc., doing business as PetMeds, is an online retailer of prescription and nonprescription medications and health products for dogs, cats and other household pets. The company offers products used to treat or prevent conditions such as allergies, infections, parasites and chronic illnesses, including prescription medicines, flea and tick treatments, heartworm preventatives, supplements and other animal-health products. In addition to medications, PetMeds sells pet food, treats, vitamins, wellness products and selected supplies.
