PetSmart Inc Earnings Cheat Sheet: Fifth Consecutive Quarter of Double-Digit Growth

PetSmart Inc (NASDAQ:PETM) reported its results for the third 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 Third Quarter

Results: Net income for PetSmart Inc rose to $56.2 million (50 cents per share) vs. $45.6 million (38 cents per share) in the same quarter a year earlier. This marks a rise of 23.1% from the year earlier quarter.

Revenue: Rose 7.9% to $1.5 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: PETM beat the mean analyst estimate of 48 cents per share. Analysts were expecting revenue of $1.49 billion.

Quoting Management: “The favorable momentum that we experienced during the quarter validates the work that we are doing, and continues to move us forward on our journey to becoming a best-in-class specialty retailer,” said Bob Moran, President and Chief Executive Officer.”For the full year, we expect comparable store sales growth of mid-single digits. We are raising our earnings per share guidance from a previous range of $2.46 to $2.52 to our current expectations of $2.50 to $2.54,” said Chip Molloy, Senior Vice President and Chief Financial Officer. “For the fourth quarter of 2011, we are expecting comparable store sales growth in the low- to mid-single digit range, and earnings per share between $0.85 and $0.89.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.6 percentage point to 28.6% from the year earlier quarter. Over that span, margins have grown on average 0.7 percentage point per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 26.4% and in the first quarter, the figure rose 27.5%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the second quarter, by 6 cents in the first quarter, and by 3 cents in the fourth quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 7% to $1.49 billion in the second quarter. The figure rose 6.8% in the first quarter from the year earlier and climbed 8.1% in the fourth quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next quarter performance. Over the past month, the average estimate for the fourth quarter has gone up from 87 cents per share to 89 cents. For the fiscal year, the average estimate has moved up from $2.43 a share to $2.53 over the last ninety days.

Competitors to Watch: PetMed Express (NASDAQ:PETS), Rite Aid (NYSE:RAD), Walgreen (NYSE:WAG), CVS (NYSE:CVS), Target (NYSE:TGT), Wal-Mart (NYSE:WMT), Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA).

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

 

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