PetMeds widens net loss while sales drop

American online pet pharmaceutical player PetMeds posted a 22% decline in net sales to $40.6 million (€37.4M) in the third quarter (Q3) of fiscal year (FY) 2025, ending 31 December 2025.

Net loss for the period amounted to $10.5 million (€9.7M), significantly higher than the same quarter in 2024, when it registered $0.7 million (€0.6M) in net loss.

Gross profit decreased 41.4% to $9.5 million (€8.7M), leading to a gross margin decrease of 7.8 percentage points (p.p.) to 23.3%.

9M2025

For the first 9 months (9M) of FY2025, net sales reached $136 million (€125.2M), down 22% YoY, while net loss stood at $53.2 million (€49.0M).

Gross profit dropped 32.8% to approximately $36.3 million (€33.4M) during the period, with gross margin decreasing by 4 p.p. to approximately 26.6%.  

Higher consumer promotional usage and lower sales impacted overall performance. 

Inventory loss

One reason for the gross margin decline was inventory write-downs related to purchases intended for a wholesale distribution transaction that did not materialize. 

“As a result, the inventory was then offered through alternative wholesale channels and the Company’s direct-to-consumer platform, including at significant promotional discounts,” the company explains. “Despite these efforts, sell-through was limited.”

This resulted in approximately $2.3 million (€1.9M) in unsold inventory as of December 2025, comprising non-prescription pet medication products, food and supplements. According to PetMeds, 70% of the supply is at risk of expiration. 

After third-party deals and promotions failed, management concluded that the inventory’s carrying value exceeded its net realizable value.

Unsolicited buyout attempts

In December, PetMeds received public, unsolicited and non-binding acquisition proposals to acquire all of the outstanding shares of the company at prices ranging from $4 (€3.68) to $4.25 (€3.91) per share in cash, which implied an equity value of up to $89 million (€75M).

They include offers from SilverCape Investments, a Singapore-based investment firm, announced on 11 December, and from Cardone Ventures, a US-based, billionaire-backed investment firm.

After SilverCape made the offer public, the company said in a statement that it would review and consider the proposal “to determine the course of action that it believes is in the best interests of PetMeds and its stockholders.” 

But in a stock filing, it said that these and potential new offers “could result in substantial costs to the company and divert management’s and the board’s attention and resources from our business.”

“We also may be subjected to stockholder litigation in connection with these events. Our stock price could be subject to significant fluctuations or otherwise be adversely affected by speculative market perceptions about these events, risks and uncertainties,” it adds.