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.
