PetSmart reports higher third-quarter 2011 earnings
Earnings higher by 32% compared to third-quarter 2010
Pet product retailer PetSmart Inc. reported earnings of US$0.50 per share for the third quarter of 2011, up 32% compared to US$0.38 per share in the third quarter of 2010. Net income totaled US$56 million in the third quarter of 2011, compared to US$46 million in the third quarter of 2010.
Total sales for the third quarter of 2011 increased 8% to US$1.5 billion. The company attributed the increase in sales to favorable foreign currency fluctuations of US$3 million. Comparable store sales, stores open for at least a year, grew 6.1%, benefiting from comparable transactions growth of 2.2%. Services sales, which are included in total sales, grew 9% to US$161 million.
During the third quarter, the company generated US$124 million in operating cash flow, spent US$28 million in capital expenditures, distributed US$16 million in dividends, and repurchased US$70 million of PetSmart stock. The company ended the quarter with US$333 million in cash, cash equivalents and restricted cash, and zero borrowings on its credit facility.
“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 CEO.
Moran said the general exclusive foods, which are sold only in pet specialty stores, represent more than 70% of the company's consumable sales. This includes the super-premium natural category, which Moran said is the largest and fastest-growing category, with key brands such as Blue Buffalo, Royal Canin, Wellness, Innova and PetSmart's Simply Nourish.
“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 US$2.46 to US$2.52 to our current expectations of US$2.50 to US$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 US$0.85 and US$0.89.”
As of October 30, PetSmart operated 1,210 stores, and anticipates opening 20 to 25 net new stores during the remainder of 2011.