Rise in sales and operating efficiencies facilitated
) to post robust fourth-quarter fiscal 2012 earnings. The
quarterly earnings of $1.24 per share jumped 36% from 91 cents
delivered in the comparable year-ago quarter. Moreover, the
reported earnings surpassed the Zacks Consensus Estimate of
Following strong results, the company now projects earnings in
the range of 92 cents-98 cents for the first quarter and between
$3.76 and $3.92 per share for fiscal 2013.
Sturdy sales across all categories spurred a 15% increase in
its top line to $1,879.2 million. However, the company's
quarterly revenues fell short of the Zacks Consensus Estimate of
$1,888 million. Going forward, PetSmart expects sales to increase
by 2%-4% in fiscal 2013.
This Zacks Rank #3 (Hold) company's innovative and
differentiated products and its sustained efforts to expand its
portfolio of brands and assortments facilitate it to deliver
healthy results. In a move to boost sales, PetSmart collaborated
Martha Stewart Living Omnimedia Inc
) and General Nutrition Centers, Inc. ("GNC"), to launch assorted
lines of pet products.
By categories, Merchandise sales grew 14.8% to $1,676 million,
whereas Services sales increased 14.9% to $193.6 million. Other
revenues in the quarter came in at $9.6 million, up 3.8% year
PetSmart, which competes with
Wal-Mart Stores Inc
), registered 4.6% growth in comparable-store sales, with a 1.2%
rise in comparable transactions. The company now expects
comparable-store sales to increase by 2%-4% in first quarter and
Benefiting from its top-line growth, gross profit jumped 19.2%
year over year to $593.4 million. Moreover, gross margin expanded
120 basis points to 31.6%, reflecting lower cost of sales as a
percentage of revenue.
PetSmart's operating income remains strong, portraying growth
of 30.2% to $221.3 million. Alongside, operating margin expanded
140 basis points to 11.8%, indicating operating efficiencies.
During the quarter, PetSmart opened 11 stores and closed 2,
bringing the total store count to 1,278. Additionally, the
company opened 1 PetsHotel, ending the quarter with 196
The company ended the quarter with cash and cash equivalents
of $335.2 million, capital lease obligations of $464.6 million
and shareholders' equity of $1,123.6 million.
In fiscal 2012, PetSmart generated operating cash flow of $696
million and incurred capital expenditures of $138 million.
Furthermore, the company repurchased shares worth $457 million
and distributed $84 million in dividends.
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