PetMed Express, Inc. (NASDAQ:PETS) Q3 2019 Earnings Conference Call - Final Transcript
Oct 21, 2019 • 08:30 am ET
offset by increases in reorder sales for the quarter, and increases on both new and reorder sales for the six months. Sales were negatively impacted, by increased online competition and aggressive pricing in the market that forced us to reduce prices. As I just mentioned, the manufacturers minimum advertised price policies should bring in general pricing discipline into the market.
The average order value was approximately $85 for the quarter compared to $87 for the same period last year. The decrease was due to the price reductions. For the second fiscal quarter, net income was $6.7 million or $0.33 diluted per share compared to $10.8 million or $0.52 diluted per share for the same quarter of the prior year, a decreased diluted earnings per share of 36%. And for the six months, net income was $12 million or $0.60 diluted per share, compared to $23.3 million or $1.14 diluted per share a year ago. a decrease to diluted earnings per share of 48%.
In addition to decreases in sales, the decreases to net income were mainly attributable to lower gross profit margins due to price reductions.
Operating margins sequentially improved by 430 basis points in the September quarter compared to the June quarter. Reorder sales increased by 1.4% to $61.9 million for the quarter, compared to reorder sales of $61 million for the same quarter of the prior year. For the six months, the reorder sales decreased by 2.2% to $129.6 million compared to $132.5 million for the same period last year.
New orders sales decreased by 22% to $8.1 million for the quarter compared to $10.4 million for the same period the prior year. For the six months, the new order sales decreased by 23% to $20.3 million compared to $26.3 million for the same period last year.
We acquired approximately 98,000 new customers in our second fiscal quarter compared than 117,000 for the same period, the prior year and we acquired approximately 238,000 new customers in the six months, compared to 286,000 for the same period a year ago. The seasonality in our business is due to the proportional of flee, 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 second fiscal quarter, our gross profit as a percent of sales was 28.6%, compared to 35.4% for the same period the prior year. And for the six months, our gross profit as a percent of sales was 27.9% compared to 34.8% for the same period a year ago. The percentage decreases can mainly be attributed to price reductions, in response to increased online competition.
Gross margin sequentially improved 130 basis points in the September quarter compared to the June quarter. As I mentioned in the beginning, we now have direct relationships with all the major manufacturers, which may help improve our gross margins in the future.
General and administrative expenses were up about $100,000 compared to the same quarter last year. For the