American Pet Products Association (APPA) data forecasts that
Americans will spend upwards of $62.75 billion on their pets this year
(http://dtn.fm/n76B4), with the supplies segment continuing to rank a close
third, just behind veterinary care and food, at around 23.8 percent of the pie.
With nearly 163 million cats and dogs alone occupying households and hearts
throughout this great country, the consolidative forces within the pet supply
industry that sparked merger talks between the two biggest players recently,
privately-owned (CVC Capital Partners and the Canada Pension Plan Investment
Board) PETCO and PetSmart, are quite easy to understand. There is a massive,
steadily growing market out there to be tapped and the domestic pet store
industry, which has grown to some $18.5 billion in revenues as of this year and
which is on track to grow by just over three percent per annum through 2021,
has become fiercely contested territory.
The aforementioned merger talks may have collapsed under the
pressure of scrutiny from U.S. antitrust regulatory authorities, but that
collapse merely set the stage for the $8.7 billion leveraged buyout of PetSmart
(again via private equity, this time led by BC Partners). Any savvy investor can
smell the opportunity here, especially for what an IBIS World report out
earlier this year explained as the hottest segment moving forward: premium
products and services. Another recent report, this time by Packaged Facts from
late 2015, sees the overall pet industry growing to nearly $92 billion in sales
by 2019, and affirms the general consensus about high-income households being a
major demographic for pet product brands.
Little surprise then in all of this market momentum that
innovative developer of high-quality, super-premium pet toys and accessories,
OurPet’s Company (OTCQX: OPCO) has continued to wow investors with its bottom
line performance metrics. A combination of ingenious product
development/design, guided by a deep management bench of industry veterans, and
pitch-perfect product execution when it comes to the interests of its core
markets, has collectively buoyed the company’s net income and revenue
performance. Amid boisterous consumer activity, as people continue to respond
strongly with positive feedback to the company’s newest designs, OPCO’s raw
financial performance has climbed to levels surpassing even the company’s own
previous YOY records set in Q4 2015 (ended December 31). For Q1 2016 (ended
March 31), OPCO posted handsome net revenue gains of 10.3 percent compared to
Q1 2015, and a whopping 24.7 percent increase in net income over the same
interval.
Primary driving force behind the company’s ever-growing
portfolio of lovingly engineered pet products, Dr. Steve Tsengas, was keen to
point out the company’s marketing efficacy at the time of the Q1 financials
release. Noting in particular how good for business the Q1 kick-off every year
of OPCO’s newest offerings was, done via the widely-attended international
trade show presented by the APPA and Pet Industry Distributors Association in
Orlando, Florida, known as the Global Pet Expo. Dr. Tsengas’s multi-decade
quest to bring the power of his vast experience in holistic, integrated and
naturopathic health to the development of high-end, signature pet brands, is
really starting to pay off for shareholders nowadays. What with the successful
introduction this year of the company’s Intelligent Pet Care™ line, featuring
BlueTooth® and wireless connectivity, for its SmartScoop® – Intelligent Litter
Box, SmartLink™ Feeder – Intelligent Pet Bowl, and SmartLink™ Waterer –
Intelligent Water Fountain.
The debut of other products, like the company’s 100% Natural
Switchgrass BioChar litter, further enhances its growing brand presence among
those key high-income households that every product developer today is trying
to court. And OurPet’s Company has a thriving online ecommerce presence, both
via its own site and ecommerce giants like Amazon, where the company’s products
typically have superb reviews/ratings from customers.
While small physical operators in the industry continue to
come under fire from big-box specialty stores, the industry continues to
consolidate and more of the retail transactions migrate to digital (with mobile
leading the way), a company like OPCO is supremely well-positioned to profit
through a tight mix of killer designs that have lasting brand/product appeal.
Appeal that is based on robust materials, intelligent engineering, and a
deep-seated need to understand the psychology of pets, so that products can be
made to enhance the lives of what are for most households just another beloved
member of the family.
For more information, visit the company’s website at
www.ourpets.com
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