Investors pushed shares of pet hospital chain VCA ($WOOF) up more than 10% to $60 on Wednesday morning, after the Los Angeles company announced that its sales in the second quarter grew 12% year over year to a record of $548.8 million and its net income jumped 19% to $54.3 million, or $0.70 a share. Analysts had been expecting sales of $537.7 million and earnings of $0.65, according to Zacks Investment Research.
VCA has spent much of the last two years pursuing both organic growth and expansion through acquisitions. In 2014, the company acquired about $120 million in revenue--twice what it had expected. In the most recent quarter, it bought up 12 standalone animal hospitals with combined annual revenues of $30 million.
VCA has also added services to its hospitals in a bid to boost revenues and lock up loyalty among pet owners. It introduced a wellness program called CareClub, for example, and mobile communications options for clients. In March, VCA's Antech Diagnostics division bought Abaxis' ($ABAX) Veterinary Reference Laboratory for $21 million.
It all seems to be working, as revenue growth in the second quarter was driven both by same-store sales and acquisitions, said VCA's CEO, Bob Antin, in a press release announcing the earnings. "Our Animal Hospital business segment same-store revenue growth rate continues to accelerate, driven once again by an increase in both the number of orders and the average revenue per order," Antin said.
For the first half of the year, VCA's revenues grew nearly 12% year over year to $1 billion, while its net income jumped 16% to $99.5 million.
VCA also said it now expects full-year 2015 revenues of $2.12 billion to $2.13 billion, and net income between $172 million to $181 million. The company had previously guided analysts to expect revenues of $2.08 billion to $2.09 billion and net income of $166 million to $175 million.
In early July, shares of VCA gained 4.3% in a single day, after an analyst at Stifel Nicolaus & Co. published the results of a survey he conducted with several of the company's veterinarians. Of the 150 who responded, 55 said they didn't have a single bad month in the second quarter--the fifth straight quarter when more than a third of VCA vets said they hadn't seen any slumps, according to Bloomberg.
The report only added to the wave of investor enthusiasm that has engulfed VCA. The company's stock has gained more than 60% over the last 12 months.