PetMed Express, Inc. (NASDAQ:PETS) Q1 2020 Earnings Conference Call - Final Transcript
Jul 20, 2020 • 08:30 am ET
June 30, 2020, sales were $96.2 million compared to sales of $80 million for the same period the prior year, an increase of 20%. The increase in sales was due to increases in new order and reorder sales. Our average order value was approximately $89 for the quarter compared to $86 for the same quarter last year.
For the first fiscal quarter, net income was $7.8 million or $0.39 diluted per share compared to $5.3 million or $0.26 diluted per share for the same quarter last year, an increase to diluted earnings per share of 47%. In addition to sales growth, operating income margin improvement of 2.1% positively impacted earnings.
New order sales increased by 29% to $15.8 million for the quarter compared to $12.2 million for the same quarter the prior year. Reorder sales increased by 19% to $80.4 million for the quarter compared to reorder sales of $67.7 million for the same quarter last year. We acquired approximately 186,000 new customers in our first fiscal quarter compared to 140,000 for the same period the prior year. 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 seasons, with fall and winter being the off-season.
For the first fiscal quarter, our gross profit as a percent of sales was 27.8% compared to 27.3% for the same period a year ago, a 50 basis points improvement.
General and administrative expenses increased by approximately $1.2 million for the quarter. The majority of this increase was related to increased payroll expenses, bank service fees and telephone expenses. Stock related compensation increased by $430,000 due to an increased stock price. The additional expenses of approximately $240,000 were incurred due to COVID-19, which included the increased payroll, telephone and sanitation expenses.
We spent $9 million in advertising for the quarter compared to $8.6 million for the same quarter of the prior year, an increase of about 5%. Advertising cost of acquiring a customer for the quarter, defined as total advertising expenses divided by total new customers acquired, was approximately $48 compared to $62 for the same quarter a year ago, a 21% improvement.
We had $86.8 million in cash and cash equivalents and $43.1 million inventory, with no debt as of June 30, 2020. Cash from operations for the quarter was negatively impacted by a $25.2 million increase in inventory as a precaution due to possible shortages as a result of COVID-19. We intend to return to normal inventory levels in future quarters.
This ends the financial review. Operator, we are ready to take questions.