PetSmart earnings increase

PetSmart Earnings Increase 39%

PetSmart, Inc. reported earnings of $0.85 per share, up 39% compared to $0.61 per share in the first quarter of 2011. Net income totaled $95 million in the first quarter of 2012, compared to $71 million in the first quarter of 2011.

Total sales for the first quarter of 2012 increased 9.4% to $1.6 billion. The increase in net sales was partially impacted by $2 million in unfavorable foreign currency fluctuations. Comparable store sales, or sales in stores open at least a year, grew 7.4%, benefitting from comparable transactions growth of 3.3%. Services sales, which are included in total sales, grew 8.3% to $181 million.

During the first quarter, the company generated $150 million in operating cash flow, spent $36 million in capital expenditures, distributed $15 million in dividends, and repurchased $175 million of PetSmart stock. The company ended the quarter with $341 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, Chairman and Chief Executive Officer. “Our performance in the first quarter was due to strength across all three merchandising categories, as well as across services, further solidifying our position as the leading pet specialty retailer.”

“As a reminder, 2012 contains a 53rd week. For all of 2012, we anticipate comparable store sales growth in the mid-single digit range, and total sales growth in the 9% to 10% range. We are raising our earnings per share guidance from a previous range of $3.02 to $3.16, to our current expectations of $3.19 to $3.31. The impact of the extra week is estimated to be $120 million in sales and $0.16 in EPS,” said Chip Molloy, Executive Vice President and Chief Financial Officer. “For the second quarter of 2012, we are expecting comparable store sales growth in the mid-single digit range, and earnings per share between $0.61 to $0.65.”

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