PetSmart Earnings: Higher-Than-Expected Net Income

PetSmart Inc (NASDAQ:PETM) reported net income above Wall Street’s expectations for the first quarter. PetSmart is a specialty provider of products, services, and solutions for the lifetime needs of pets. The company offers a line of products for all the life stages of pets and offers various pet services.

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PetSmart Inc Earnings Cheat Sheet for the First Quarter

Results: Net income for PetSmart Inc rose to $94.7 million (85 cents per share) vs. $70.9 million (61 cents per share) in the same quarter a year earlier. This marks a rise of 33.5% from the year-earlier quarter.

Revenue: Rose 9.4% to $1.63 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: PetSmart Inc beat the mean analyst estimate of 73 cents per share. Analysts were expecting revenue of $1.6 billion.

Quoting Management: “We are pleased to report another quarter of solid earnings growth,” said Bob Moran, Chairman and Chief Executive Officer. “Our performance in the first quarter was due to strength across all three merchandising categories, as well as across services, further solidifying our position as the leading pet specialty retailer.” “As a reminder, 2012 contains a 53rd week. For all of 2012, we anticipate comparable store sales growth in the mid-single digit range, and total sales growth in the 9% to 10% range. We are raising our earnings per share guidance from a previous range of $3.02 to $3.16, to our current expectations of $3.19 to $3.31. The impact of the extra week is estimated to be $120 million in sales and $0.16 in EPS,” said Chip Molloy, Executive Vice President and Chief Financial Officer. “For the second quarter of 2012, we are expecting comparable store sales growth in the mid-single digit range, and earnings per share between $0.61 to $0.65.”

Key Stats:

The company has now seen its net income increase for three consecutive quarters. In the fourth quarter of the last fiscal year, net income rose 13% and in the third quarter of the last fiscal year, the figure rose 23.1%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by one cent in the fourth quarter of the last fiscal year, by 2 cents in the third quarter of the last fiscal year, and by 3 cents in the second quarter of the last fiscal year.

Revenue has risen for the last four quarters. Revenue increased 7.7% to $1.64 billion in the fourth quarter of the last fiscal year. The figure rose 7.9% in the third quarter of the last fiscal year from the year earlier and climbed 7% in the second quarter of the last fiscal year from the year-ago quarter.

Margins were up in the fourth quarter of the last fiscal year, following a drop in the previous quarter. Gross margin grew 0.9 percentage point from the year-earlier quarter to 30.5%. In the third quarter of the last fiscal year, the figure rose 0.2 percentage point to 30.4% from the year earlier quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the second quarter is 64 cents per share, up from 63 cents ninety days ago. The average estimate for the fiscal year is $3.13 per share, a rise from $3 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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