Sellers' net profit increased by 287%, and the US pet market grew rapidly

Affected by the epidemic, people have spent more time at home. In order to make their home life less lonely, many people choose to keep a pet to accompany themselves. In the context of the continued downturn in the global economy due to the impact of the epidemic, the "pet economy" has gone against the current and ushered in explosive growth in many countries.

The United States is the world's largest pet economy. With the rapid development of the pet market, the growth rate of Petco, an American pet retailer, is also very rapid. According to the latest financial report data, Petco's net income increased by 287% compared with last year .

In addition to the US market, the prospects for the pet products market in countries and regions such as Europe, Japan, and China are also very bright.

Petco announces first quarter results, net income up 287%

U.S. consumer confidence has further deteriorated amid concerns about rising inflation and other economic pressures, but Petco 's latest first-quarter results show that consumers are continuing to spend money on their pets.

Petco , one of the largest pet retailers in the U.S., reported first-quarter net sales of $ 1.476 billion, up 4.3% year-over-year . Comparable sales increased 5.1% year-over -year and 33.5 % over the past two years , marking the 14th consecutive quarter of growth for the metric.

It is worth noting that the pet retailer's net profit during the period was $23.8 million, up 287 % from the same period last year , and operating income increased 5% year-on-year to $ 49.9 million . At the same time, Petco 's active customer base continued to expand. In the quarter , Petco added nearly 400,000 net new customers , a double-digit year-on-year increase.

For the current fiscal year, Petco expects net revenue to be between $6.15 billion and $6.25 billion, adjusted EBITDA to be between $630 million and $645 million, and capital expenditures to be between $275 million and $325 million.

During the earnings call, Petco executives said they are considering expanding the company's product line , which could include pet food and gourmet food. In addition, as Petco grows, they will continue to prioritize the pet health and wellness category , which could become a key differentiator for pet retailers as competition in the pet market intensifies .

Despite a continued decline in U.S. consumer confidence, Petco executives believe the retailer will continue to grow in the year ahead , thanks to a booming pet market. According to Nielsen data, the pet supplies category was the fastest growing of the 30 categories it tracked in March and April 2022.

Overview and prospects of pet industry development

Petco's profitability is closely related to the encouraging development of the foreign pet industry in recent years. With the continuous growth of the economy and the continuous improvement of living standards, people have begun to pursue spiritual satisfaction while satisfying their material life.

On the one hand, people are paying more and more attention to cultivating life interests and pursuing personalized experiences. On the other hand, changes in traditional family structures and increased work pressure have led more and more young people to invest their emotions in pets, and the pet industry has developed as a result.

The United States is the world's largest pet-raising and pet-consuming country. More than half of the households in the United States keep pets. The huge number of pets has generated a relatively stable market demand. The number and proportion of households keeping pets in the United States are as follows:

It is not difficult to find that keeping pets has a wide family base in the United States. Between 2004 and 2020 , the proportion of American households with pets remained above 60%, and reached 70% in 2020. The work-from-home policy caused by the ongoing epidemic has prompted more American families to choose to keep pets as companions .

Among them, the number and proportion of households raising dogs and cats as pets in the United States are both high. At the end of 2020 , the number of households raising dogs as pets was 69 million, accounting for 54% of all households in the United States; the number of households raising cats as pets was 45.3 million, accounting for 35% of all households in the United States.

The huge consumer group has generated huge market demand. From 2015 to 2020, the sales, per capita GDP and growth rate of pet products and services in the United States are as follows:

Since 2016, the growth rate of the U.S. pet market has been higher than the growth rate of per capita GDP. In 2020, when the per capita GDP of the U.S. market had negative growth, the market size of pet food and services reached a high growth rate of 9.3%.

In 2020, the scale of pet food and services in the United States reached 107.29 billion U.S. dollars, an increase of 48% compared with 2015. According to the forecast of the American Pet Research Institute , the scale of the U.S. pet market will reach a staggering 155.04 billion U.S. dollars in 2025, with a compound growth rate of 7.46%.

Sales data for 2021 released by the American Pet Products Association ( APPA) also showed that the pet industry's annual sales broke the record again to reach $123.6 billion after breaking the $100 billion mark for the first time in 2020, and are expected to continue to grow in 2022 .

Overall , spending in all categories has increased. Spending on pet food and treats reached $50 billion , and care was $34.3 billion . At the same time, sales of pet supplies and over-the-counter drugs increased by 17.8% year-on-year to $29.8 billion; other service categories including grooming and dog walking also increased by 17.3 % to $9.5 billion.

Among these expenditures, young people of the millennial and Generation Z are the main force of online purchases. They are willing to spend more on pets and are more experimental in purchasing types, including food, snacks, toys, care and other types of products.

In addition to the United States, the pet industry has a certain market size in China, Europe, Japan and other emerging countries. The number of pets and the scale of consumption in Europe are both at a relatively high level. Previously, most European families kept large dogs, but in recent years, the number of small dogs has increased significantly.

Japan is also a country with a large population of pet owners and consumers. Its pet spending is mainly reflected in pet food, pet supplies and pet maintenance fees. Although the number of pets in Japan has been declining in recent years, the overall consumption scale is still growing.

According to APPA, despite the pressures of inflation and supply chain in 2022, the pet industry in the United States will still grow at a relatively gratifying rate . The development of the pet industry in Europe and the United States is relatively mature compared with emerging markets , and the work-from-home environment under the epidemic has once again increased the market demand for pets and related products.

Under such circumstances, domestic sellers such as Yuanfei Pet, Tianyuan Pet and Zhongheng Pet have all entered the pet industry and achieved sales growth . Under the market dividend, many small and medium - sized sellers have entered the industry . However , as far as the current situation is concerned, pet products are developing in the direction of intelligence and specialization. When sellers enter the market, they should combine the changes in consumer demand and work harder on product innovation .

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