PetMed Express, Inc. (NASDAQ:PETS) Q1 2019 Earnings Conference Call - Final Transcript
Jul 22, 2019 • 08:00 am ET
to $12.6 million or $0.62 diluted per share for the same quarter last year, a decreased diluted earnings per share of 57%. In addition to decreases in sales, the decreased net income for the quarter was mainly attributable to lower gross profit margins due to price reductions and higher advertising expenses.
New orders sales decreased by 23% to $12.2 million for the quarter compared to $15.9 million for the same quarter of the prior year. Reorder sales decreased by 5% to $67.7 million for the quarter compared to reorder sales of $71.5 million for the same quarter last year. We acquired approximately 140,000 net customers in our first fiscal quarter, compared to 169,000 for the same period the prior year. Approximately 84% of our sales were generated on our website for the quarter compared to 85% for the same period last year.
The seasonality in our business is due to the proportion of flea, tick and heartworm medications in our product mix. Spring and summer are considered peak season, with fall and winter being the off-season.
For the first fiscal quarter, our gross profit as a percent of sales was 27.3% compared to 34.3% for the same period a year ago. The percentage decrease can mainly be attributed to price reductions in response to increased online competition. We made further progress on having direct relationships with the major manufacturers in the current quarter, which may help improve our gross margins in the future.
Our general and administrative expenses were down approximately $400,000 for the quarter compared to the same period last year. We spent $8.6 million in advertising for the quarter compared to $6.7 million for the same quarter the prior year, an increase of about 29%. The increase was due to the re-addition of television advertising. Advertising cost of acquiring a customer for the quarter, defined as total advertising expenses divided by total new customers acquired, was approximately $62 compared to $40 for the same quarter a year ago. The increase was due to the re-addition of television advertising.
We had $83.4 million in cash and cash equivalents and $30.2 million in inventory, with no debt as of June 30, 2019. Cash from operations for the quarter was negatively impacted by an $8.8 million increase in inventory, the result of cost advantaged inventory buys we made during the quarter. We intend to return to normal inventory levels in future quarters.
This ends the financial review. Operator, we are ready to take questions.