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Wednesday, November 19, 2008
PetSmart Net Rises as Spending on Pets Stays High
Dunstan Prial
FOXBusiness
Shares of PetSmart (PETM) rose in after hours trading Wednesday after the pet products retailer reported a 22% increase in third-quarter profit on higher same-store sales and sales of pet services.
Looking ahead, the company said in a statement that it was preparing for an economic slowdown and will reduce capital spending.
The company earned $35.8 million, or 28 cents a share, versus $29.5 million, or 23 cents a share, during the same period a year ago.
Analysts had expected earnings of 26 cents a share.
Sales rose to $1.25 billion, just above Wall Street’s expectations, and up from $1.12 billion a year ago.
Same-store sales -- or sales at stores open at least a year, an important performance indicator -- grew 5.4% in the quarter, helped by pet services, which gained 15.2% to $127.8 million.
Meanwhile, consumer price indexes tied to pets and pet products and services increased substantially in October, rising 0.9%.
Nevertheless, Chairman and Chief Executive Phil Francis said in a statement that the company is “not immune to the pressures of a slowing economy.”
PetSmart operates about 1,100 stores in the United States and Canada.
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A specialist is a member of a stock exchange who works as an auctioneer for a specific stock and/or stocks. It can be an individual, partnership, corporation or group of firms.
The specialist works to maintain a "fair and orderly market" for respective stocks, matching up buyers and sellers by displaying the best "bid" and "ask" prices at its trading post. If buys are not equal to sells, the specialist evens the scale by buying or selling shares, accordingly. However, they cannot make their own transactions until all investor orders have been placed.
Gauging supply and demand, the specialist sets an opening price for the stocks in its domain. If a price has not been set by the time the market opens, the specialist can delay that particular stock's opening.
Specialists make money off the "spread," which is the difference between bid and ask prices on orders.
