Patterson Cos. continues to benefit from the pandemic-fueled rise in pet adoptions as spending on companion animals contributed to a 17% increase in third-quarter earnings.
The Mendota Heights-based distributor of animal and dental products reported its third-quarter earnings were $57 million, or 58 cents a share. Adjusted earnings per share for the period ended Jan. 29 were 55 cents, 5 cents better than analyst expectations.
"Patterson is successfully navigating a dynamic end market environment and delivered solid top-line growth and gross margin expansion during the third quarter that builds on our strong performance during the year ago period," chief executive Mark Walchirk said in a news release.
Millions of people adopted pets during the COVID-19 pandemic and have been spending to treat, train and care for their pets. In the first quarter, Patterson made its own purchase in the companion animal market, spending $19.8 million on Miller Vet, based in West Point, Neb., and a more than 100-year-old distributor of veterinary products and supplies in the companion animal space.
It was the sixth-straight quarter of double-digit growth in companion animal sales, driving a 5% increase in Patterson's animal health segment in the quarter.
The company, which also distributes production animal products, saw operating income in the animal health segment rise 14% to $23.4 million.
The omicron variant put pressure on dental markets during the quarter, with Patterson's dental segment sales growing less than 1% to $651 million. Operating income for the segment increased 5% to $64.1 million.
Walchirk told analysts the company believes effects from the COVID-19 variant are waning. "We anticipate the most notable impact from the omicron variant is reflected in our third quarter results," he said.
The company raised its earnings guidance for the remainder of its fiscal year, which ends April 30, from the range of $1.69 to $1.79 a share to $1.86 to $1.91 a share.
Patterson shares closed Wednesday at $30.74, up 4.5%. Over the past 52 weeks, shares have ranged from $26.51 to $37.37.
