Pet supplies retailer Petco Health and Wellness Company (WOOF) reported record second-quarter revenue on Thursday, driven by an acceleration in recurring revenue customers and the “humanization of pets” trend.
Petco reported revenue of $1.4 billion for the second quarter, up 19% from a year ago, and topped analysts’ estimates of $1.37 billion as the pandemic pet boom continues. The pet supplier posted adjusted earnings per share of 25 cents, also beating forecasts of 21 cents.
Petco CEO Ron Coughlin told Yahoo Finance Live that the company’s recurring revenue was up 60% in the quarter, and the number of recurring revenue customers grew by 50%. Recurring revenue customers “creates stickiness, and that creates long term predictability in our earnings,” Coughlin said.
Petco has tapped into recurring revenue streams, from automatically scheduled delivery for pet food, its subscription PupBox for new pet owners, insurance, and its Vital Care membership that offers checkups, vaccinations, grooming, and discounts for $19 a month. Vital Care now has more than 100,000 members since launching at the end of last year, while Petco’s nutrition and grooming loyalty program surpassed 700,000 members, nearly doubling for the prior quarter.
