Public is Getting Fed Up With VCA Prices

A stock analyst says VCA's price increases are driving people elsewhere, and both its growth and income are not sustainable. After a recent $780 bill for one of my rescues, including $425 for a pelvic ultrasound, I know of what he speaks.

This recession is the time for some established clinic to decide to drop prices and grab an increased market share and hold onto it when the economy picks up. They could cut into the customer base of VCA and the other high priced corporate practices. But I don't see this happening. The good clinics of the past are being rapidly bought out by VCA and other corporations. Too bad VCA can't turn a few of their many clinics into budget clinics and see what happens.

Here is the article (partial. Getting the whole article requires a $130 subscription fee):

VCA Antech Losing Its Bite

By JUSTIN FERAYORNI

About this article:
Yesterday evening, VCA Antech reported its March quarter. Revenue of $316 million missed consensus by nearly 5%, while very tight expense control produced an earnings per share beat of 1 cent. The company's veterinary hospital revenue was up over 5% year over year to $238 million, but that was driven by continued price increases and acquisitions. I estimate that organic order growth in the hospital business was down mid-to-high single digits, given "same-store" sales down 2.7%. I believe that VCA's continued price increases are unsustainable in this economic environment, as customers on the margin will choose to take their business elsewhere. I believe this is showing up partially in the organic growth figures. The company's lab business performed slightly better -- up 1.7% organically, to $77.5 million. The company's operating margins continued to suffer this quarter, falling 60 basis points to 18.8%. This continues the descent...