William Blair Reiterates Outperform Rating Of PetMed Express (PETS)

William Blair & Company analysts Daniel Hofkin and Mark Miller reiterated their Outperform rating for shares of PetMed Express, Inc. (Nasdaq: PETS).

The analysts said that a recent decision by BAYER AKTIENGES (OTC: BAYRY.PK) to broaden its distribution to over the counter sales would produce large savings for PetMed Express because flea and tick products represent more than 50% of its sales.

The analysts said that they don't expect significant competition from mass merchants like Wal-Mart Stores, Inc. (NYSE: WMT) and Costco Wholesale Corporation (Nasdaq: COST) because the Bayer decision does not include direct sales to them.

The William Blair & Company analysts wrote, "the most important development that coincided with our visit was the decision by Bayer’s (BAYRY.PK $71.44) Animal Health division to broaden its distribution for over-the-counter (OTC) flea and ticket products to the pet specialty channel. With most veterinarian clinics resigned to Bayer’s move—based on our independent research—we anticipate sanofi aventis’s (NYSE: SNY) Merial division will follow suit with its products."