Petz: Mixed feelings in the second quarter of 2023

The gross revenue of the Brazilian pet retailer witnessed an 18% increase compared to R$800.7 million (€148.7M/$163.6M) in Q2 2022.

Petz’s standalone revenue accounted for R$870.2 million (€161.6M/$177.8M), marking a 16.2% growth rate. The company’s same-store sales (SSS) also increased by 5.7% year-on-year. 

The company’s standalone gross revenue grew 16.2%, largely attributed to its digital front, totaling R$312 million (€57.9M/$63.7M) in sales with a 28.4% annual increase.  

Gross revenue from acquisitions made the company R$95.7M (€17.8M/$19.6M), a 71.2% increase since last year—the company’s pet lifestyle brand Zee.Dog registered $55.6 million (€10.3M/$11.3M), while its dog training pad company Petix hit R$40 million (€7.4M/$8.1M).

Consolidated revenue for H1 2023 spiked by 20.1% to R$1.86 billion (€346.7M/$380.5M) from R$1.5 billion (€278.6/$306.5M) in the first half of 2022. At the same time, profits rose to R$738.4 million (€137.1M/$151M) from January to June 2023, witnessing a 17% increase.

Less net income

Despite revenue growth and an increase in profit margins by 14.5% to R$374.9 million (€69.9M/$76.7M) in Q2 2023, the gross margin of 39.7% fell by 1.2% since Q2 2022 due to margin pressure by Petz standalone and the consolidation of Petix. 

Overall, Petz’s adjusted net income fell by 25.1% year-on-year, reflecting a lower financial result this quarter than last year.

Revenue through omnichannel grew 27.8% this quarter, while the omnichannel ratio stood at a benchmark level of 88.6%, down 0.3% from H1 2023.

“The consumption environment proved uncertain, with demand still cooled by macro conditions, in addition to the more intense competitive scenario with marginal initiatives in favor of profitability by our competitors, which impacted our growth rate in recent months,” the company’s report states.

Quarterly outlook

The group opened 11 new stores—8 outside São Paulo, 6 of which were in new cities across Brazil. This sees the company’s physical stores grow to 231 stores in total. 

More than half (54%) of the stores are yet to complete their third year of operation, implying an expected short-term outfit once they reach their full revenue and profit potential.