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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.