Good PetSmart, profits surge on solid comps
Broad-based strength at PetSmart enabled the nation’s leading pet specialty retailer to produce a third quarter same store sales increase of 6.5% and grow profits by 50%.
The company said total sales for the period ended October 28 increased 9% to $1.6 billion, net income increased 46% to $82 million and earnings per share increased 50% to 75 cents, well ahead of the 63 cents analysts were expecting. PetSmart ended the quarter with 1,269 stores.
"Our performance in the third quarter was due to strength across all three merchandising categories, as well as across services," said Bob Moran, chairman and CEO. "We are executing well, and continue to define the pet specialty customer experience."
Buoyed by its third quarter performance, PetSmart increased its full year profit forecast to a range of $3.47 to $3.51 a share from a prior range of $3.30 to $3.40.
PetSmart CFO Chip Molloy noted that the company’s 2012 fiscal year includes a 53rd week in updating guidance.
"For all of 2012, we anticipate comparable store sales growth of 6% to 7%, and total sales growth in the 10% to 11% range," Molloy said. "The impact of the extra week is estimated to be $120 million in sales and 16 cents in earnings per share. For the fourth quarter of 2012, we are expecting comparable store sales growth in the mid-single digit range, and earnings per share between $1.16 and $1.20, including the impact of the extra week."
PetSmart used the occasion of reporting impressive results to announce a leadership transition within its finance department. Molloy said he would be resigning in early 2014, but planned to retain his current role until mid 2013 at which time he will transition to a role as a special advisor until his retirement in March 2014.
"Chip has been an invaluable member of our management team over the past five years, and has been instrumental in designing a framework and creating a culture within the company that consistently pushes us to always consider our shareholders," said CEO Moran. "It is this foundation of focus and discipline that has contributed to our success over the past four years, and will remain a key pillar of our strategy well into the future."