Patterson Companies, Inc. (NASDAQ:PDCO) Q2 2023 Earnings Call Transcript

Jonathon Block: Well, just maybe you can just speak to sort of like the reacceleration, right. If you’ve had the and I’m sort of going because there’s two different dynamics, right. One is, as you mentioned, the deflationary environment on gloves, and that should normalize per your comments on . But, Don, if we look at the and it’s been subtle to be clear, but the plus three to plus 1 ex infection prevention with price playing a bigger role. And you guys want to get back to low single digits implying a little bit of an acceleration . How do you get there, arguably if price may play less of a role next year versus this year?

Don Zurbay: Yes, well, I think we’re going to continue to execute on our strategy. I think when we break down the consumables, one thing, I would say is that in the categories we compete in, we believe we’re maintaining or taking share. We think we do pretty well in those categories. Sometimes it’s hard to stack up everything just given the way that we’re in certain categories, competitors are in certain categories, what does the market exactly look like. But I think we’re well-positioned to get back to taking share, which would probably put our companion sales, ex PPE in the short-term, but overall in the long-term above the market growth.

Jonathon Block: Understood. Thanks, guys.

Operator: Your next question comes from the line of Charlotte Cole from Bank of America. Your line is open.

Unidentified Analyst: Hi, this is Charlotte on for Mike. Thanks for taking my question. Could you just provide some more color on the trends that you’re seeing in your customers, particularly as it relates to utilization and volumes? And then just an update around spend per visit as well?

Don Zurbay: Yes, I think the industry data would talk about in the companion business vet visits being down, roughly 2%, but vet spend per visit is up 5%. So we think that’s a growing market with that dynamic. So that’s really the breakdown that I think and we would be — we would look at our data and say that we think that seems reasonable, and that that’s consistent with what we’re seeing as well.

Kevin Barry: Especially within the context of the comparisons we have a year ago, where you had a very high growth rate on visits in particular. So we’ve expected this sort of moderation in our results and our forecast.

Unidentified Analyst: Got it. And then could you just discuss more on your strategy, particularly around organic investments that you’re making in the core business?

Don Zurbay: Well, we have a lot of different things we’re investing in, in our core business. I think we’ve talked about them before. I mean, obviously, we strive for continued improvement in our efficiency just in our distribution operation itself. Our private label program is a very important part of our margin enhancement initiatives. And then just investing in the infrastructure we need to really drive the margin improvement. And margin improvement is paramount and I think you can see it in these results. And if you look back, we’re starting to — in my view, we have a track record here of doing what we said we were going to do, which is improve the margins, and a lot of that has to do with all the various investments were making to help drive that.

Unidentified Analyst: Great. Thank you.

Operator: Your next question comes from the line of Brandon Vazquez from William Blair. Your line is open.