Our Growth means opportunity for you.

News Release

Printer Friendly Version View printer-friendly version
<< Back
PetSmart Reports Results for the First Quarter 2011
Q1 Earnings up 33% to $0.61 per Share; Comp Sales of 5.0%; Total Sales up 6.8%; Comp Transactions of 2.7%

PHOENIX, May 18, 2011 (BUSINESS WIRE) --

PetSmart, Inc. (NASDAQ: PETM) today reported earnings of $0.61 per share, up 33% compared to $0.46 per share in the first quarter of 2010. Net income totaled $71 million in the first quarter of 2011, compared to $56 million in the first quarter of 2010.

Total sales for the first quarter of 2011 increased 6.8% to $1.5 billion. The increase in net sales was partially impacted by $4 million in favorable foreign currency fluctuations. Comparable store sales, or sales in stores open at least a year, grew 5.0%, benefitting from comparable transactions growth of 2.7%. Services sales, which are included in total sales, grew 9.0% to $167 million.

During the first quarter, the company generated $96 million in operating cash flow, spent $31 million in capital expenditures, distributed $14 million in dividends, and repurchased $102 million of PetSmart stock. The Company ended the quarter with $290 million in cash, cash equivalents and restricted cash and zero borrowings on its credit facility.

"We are pleased to report another quarter of solid earnings growth," said Bob Moran, Chief Executive Officer and President. "Our performance in the first quarter reflects the continued momentum in our business and represents another step forward on our journey to becoming a best-in-class specialty retailer."

"For all of 2011, we expect comparable store sales growth in the low- to mid-single digit range, and total sales growth in the mid-single digit range. We are raising our earnings per share guidance from a previous range of $2.23 to $2.35 to our current expectations of $2.32 to $2.42," said Chip Molloy, Senior Vice President and Chief Financial Officer. "For the second quarter of 2011, we are expecting comparable store sales growth in the mid-single digit range, and earnings per share between $0.47 and $0.51."

Conference call information

PetSmart management has scheduled a teleconference for 4:30 p.m. EDT on May 18, 2011 to discuss results for the first quarter 2011. This teleconference will be webcast live for all investors at www.petm.com or www.streetevents.com. The webcast will be available until the company announces results for the second quarter of 2011. In addition, you can listen to the call live by dialing 866-253-5757 (within the United States and Canada) or 703-639-1206 (for international callers), code 1525559.

A phone replay will be available through June 18, 2011, 11:59 p.m. EDT, at 888-266-2081 in the United States and Canada, or at 703-925-2533 for international callers, code 1525559.

About PetSmart

PetSmart, Inc. (NASDAQ: PETM) is the largest specialty pet retailer of services and solutions for the lifetime needs of pets. The company employs approximately 48,000 associates and operates more than 1,192 pet stores in the United States, Canada and Puerto Rico, over 184 in-store PetSmart(R) PetsHotel(R) dog and cat boarding facilities and is a leading online provider of pet supplies and pet care information (http://www.petsmart.com). PetSmart provides a broad range of competitively priced pet food and pet products; and offers dog training, pet grooming, pet boarding, PetSmart Doggie Day Campâ" day care services and pet adoption services. Since 1994, PetSmart Charities, Inc., an independent 501(c)(3) non-profit animal welfare organization and the largest funder of animal welfare efforts in North America, has provided more than $134 million in grants and programs benefiting animal welfare organizations. Through its in-store pet adoption partnership with PetSmart Charities(R), PetSmart has helped save the lives of more than 4.4 million pets.

Forward-looking statements

This news release contains forward-looking statements concerning our expectations for future performance, including the statements comprising our 2011 guidance. These "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in general economic conditions; conditions affecting customer transactions and average ticket including, but not limited to, weather conditions or other seasonal events; our ability to compete effectively; disruption of our supply chain; our ability to effectively manage our growth and operations; changes in our cost structure; and changes in the legal or regulatory environment. Undue reliance should not be placed on such forward-looking statements as they speak only as of the date hereof, and we undertake no obligation to update these statements to reflect subsequent events or circumstances except as may be required by law. For additional information on these and other factors that arise when investing in PetSmart, please see our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K.

Follow PetSmart on Twitter www.twitter.com/PetSmartTLC

Find PetSmart on Facebook www.facebook.com/PetSmart

PetSmart, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except par value)
(Unaudited)
May 1, January 30, May 2,
2011 2011 2010
Assets
Cash and cash equivalents $ 228,097 $ 291,949 $ 241,964
Short-term investments 9,761 9,708 -
Restricted cash 61,439 61,439 46,515
Receivables, net 52,802 53,971 47,460

Merchandise inventories

635,354 615,841 596,660
Deferred income taxes 44,999 44,999 36,805
Prepaid expenses and other current assets 72,286 46,022 61,007
Total current assets 1,104,738 1,123,929 1,030,411
Property and equipment, net 1,100,910 1,132,435 1,176,144
Equity investment in Banfield 29,473 42,858 33,924
Deferred income taxes 91,260 96,215 87,148
Goodwill 45,597 44,111 43,667
Other noncurrent assets 36,802 30,672 27,155
Total assets $ 2,408,780 $ 2,470,220 $ 2,398,449
Liabilities and Stockholders' Equity
Accounts payable and bank overdraft $ 154,435 $ 168,776 $ 198,280
Accrued payroll, bonus and employee benefits 114,608 139,359 98,615
Accrued occupancy expenses and deferred rents 60,349 64,328 59,293
Current maturities of capital lease obligations 47,176 45,277 39,462
Other current liabilities 168,690 156,065 142,136
Total current liabilities 545,258 573,805 537,786
Capital lease obligations 515,139 521,552 533,893
Deferred rents 84,704 86,027 89,625
Other noncurrent liabilities 119,693 118,194 103,621
Total liabilities 1,264,794 1,299,578 1,264,925
Stockholders' Equity:
Preferred stock; $.0001 par value - - -
Common stock; $.0001 par value 16 16 16
Additional paid-in capital 1,238,604 1,222,340 1,169,930
Retained earnings 1,334,534 1,277,803 1,137,466
Accumulated other comprehensive income 8,154 5,380 4,786
Less: Treasury stock (1,437,322 ) (1,334,897 ) (1,178,674 )
Total stockholders' equity 1,143,986 1,170,642 1,133,524
Total liabilities and stockholders' equity $ 2,408,780 $ 2,470,220 $ 2,398,449
PetSmart, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share and store data)
(Unaudited)
Thirteen Weeks Ended Thirteen Weeks Ended
May 1, 2011 % of Sales May 2, 2010 % of Sales
Merchandise sales $ 1,314,349 88.2 % $ 1,233,595 88.4 %
Services sales 167,096 11.2 % 153,287 11.0 %
Other revenue 8,921 0.6 % 8,271 0.6 %
Net sales 1,490,366 100.0 % 1,395,153 100.0 %
Cost of merchandise sales 919,476 61.7 % 869,842 62.3 %
Cost of services sales 120,554 8.1 % 112,748 8.1 %
Cost of other revenue 8,921 0.6 % 8,271 0.6 %
Total cost of sales 1,048,951 70.4 % 990,861 71.0 %
Gross profit 441,415 29.6 % 404,292 29.0 %
Operating, general and administrative expenses 319,732 21.5 % 301,031 21.6 %
Operating income 121,683 8.2 % 103,261 7.4 %
Interest expense, net (14,447 ) -1.0 % (15,343 ) -1.1 %
Income before income tax expense

and equity in income from Banfield

107,236 7.2 % 87,918 6.3 %
Income tax expense (38,906 ) -2.6 % (33,764 ) -2.4 %
Equity in income from Banfield 2,575 0.2 % 1,438 0.1 %
Net income $ 70,905 4.8 % $ 55,592 4.0 %
Earnings per common share:
Basic $ 0.62 $ 0.47
Diluted $ 0.61 $ 0.46
Weighted average shares outstanding:
Basic 113,541 117,976
Diluted 115,699 120,382
Stores open at beginning of each period 1,187 1,149
Stores opened during each period 5 14
Stores closed during each period - (3 )
Stores open at end of each period 1,192 1,160

SOURCE: PetSmart, Inc.

PetSmart, Inc.
Investor Relations, 623-587-2025