PetSmart Q3 Profit Tops View, Lifts Forecast

(RTTNews) - Pet supplies retailer PetSmart, Inc. (PETM) Friday reported increased profit for the third quarter that topped estimates, while higher sales met Wall Street projection. Further, the firm raised its annual profit forecast.

David Lenhardt, chief executive officer, said, "Given the challenged consumer environment during the quarter, we are pleased with our results and level of execution. Our performance demonstrates the strength and stability of our business."

Net income increased to $92.22 million from $82.32 million in the third quarter of 2012. Earnings per share advanced to $0.88 from $0.75. On average, 26 analysts polled by Thomson Reuters expected earnings of $0.86 per share. Analysts' estimates typically exclude special items.

Total sales increased 4 percent to $1.7 billion from $1.63 billion, meeting Wall Street expectation.

The Phoenix, Arizona-based company had reported net income of $93.37 million or $0.89 per share for the second quarter on sales of $1.71 billion.

Third-quarter comparable store sales, or sales in stores open at least a year, grew 2.7 percent, including comparable transactions growth of 0.2 percent.

The company had forecast third-quarter earnings per share in the range of $0.83 to $0.87 and comparable-store sales growth of 2.2 to 2.5 percent.

Merchandise sales grew 4 percent to $1.50 billion and Services sales rose 5.2 percent to $184.2 million.

Looking ahead to the fourth quarter, the company expects earnings per share of $1.19 to $1.23 and total sales drop of 2 to 3 percent. Comparable store sales growth is estimated in the range of 2.5 to 3.5 percent. Analysts expect earnings of $1.24 per share.

The fourth quarter of 2013 is a 13-week quarter and last year's was a 14-week quarter. On a 13 to 13-week basis, total sales growth of 4 to 5 percent is expected.

For the full year, earnings per share are expected in the range of $3.94 to $3.98. Wall Street looks for annual earnings of $3.97 per share.

The firm sees total sales growth of 3 percent and comparable store sales growth of 3 to 3.5 percent. On a 52 to 52-week basis, total sales growth of about 5 percent is expected.

In October, the firm said it continues to expect full year earnings in the range of $3.88 to $3.98 per share, with both total and comparable-store sales growth ranging between 3 and 4 percent.

PETM closed at $74.60 on Thursday.