E-commerce business surges 90%! North American pet demand will increase by $4 billion per year

After going public earlier this year, Petco released its fourth-quarter financial report on Thursday, reporting a 16.5% increase in net sales to $1.3 billion and a 17% increase in comparable sales.

The pet retailer said its full-year net sales rose 11% year-over-year to $4.9 billion , with comp sales also up 11%.

On the stock market, Petco reported a net loss attributable to shareholders of $26.5 million for the year, including a $17.5 million loss on extinguishment of debt related to its IPO. The retailer reduced its debt by 49%, or $1.6 billion, to $1.7 billion.

The platform expects net sales in the coming year to increase 8.7% year-on-year, reaching US$5.35 billion in the high-end pet market and US$5.25 billion in the low-end market .

“We closed out the year with a strong fourth quarter following our successful IPO in January, and momentum is continuing into 2021, ” CEO Ron Coughlin said in a statement. “Our pet category continues to grow as millions of new pets are added to households, driving higher earnings for us in the coming years.”

The retailer added about 1 million new customers during the quarter and said its e-commerce business grew more than 90% . But at the same time, traffic to its stores also grew. According to a February report from traffic analytics firm Placer.ai, Petco's average monthly visits increased by 1.7%.

During the pandemic, consumers have placed their affection on pets, and the number of people adopting pets has increased. According to Packaged Facts, the number of households with pets in the United States is expected to grow by 4% last year . Petco previously said that the annual demand for pet care products is expected to increase by $4 billion .

According to Coughlin, 3 million pets will find new homes in 2020, and the pet adoption trend will continue to grow in 2021 .

Late last year, Barkbox's parent company Bark also announced plans to go public through a SPAC transaction. Online pet retailer Chewy, which went public in 2019, has experienced record growth over the past year. In the third quarter, the company reported a 45% increase in net sales to $1.8 billion and an active net customer base of 17.8 million.

Petco expects continued net sales growth in the coming year and believes that the growth momentum in the segment will continue. While other categories, such as apparel, have suffered over the past year, the pet category has shown resilience, even in times of economic uncertainty.

For Petco, its e-commerce business complements its physical store footprint. Consumers complete the purchase process through online ordering, in-store pickup (BOPIS) and curbside pickup, and Coughlin pointed out that 80% of e-commerce orders are now placed through pet care centers, which can be fulfilled faster and at lower costs compared to online competitors.

E-commerce

North America

pet

Petco