Rise in sales and operating efficiencies facilitated
) to post better-than-expected first-quarter fiscal 2013
earnings. The quarterly earnings of 98 cents a share surpassed
the Zacks Consensus Estimate by couple of cents and jumped 15.3%
year over year.
Following strong results, the company raised its earnings
guidance and now projects earnings in the range of $3.82 - $3.94
per share for fiscal 2013, up from its earlier guidance range of
$3.76 - $3.92. Moreover, the company expects second-quarter
fiscal 2013 earnings between 82 cents and 86 cents.
Sturdy sales across all categories spurred a 5% increase in
its top line to $1,710.6 million. However, the company's
quarterly revenue fell short of the Zacks Consensus Estimate of
$1,721 million. Going forward, PetSmart expects sales to increase
by 3%-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 facilitated it to deliver
In a move to boost sales, PetSmart collaborated with
Martha Stewart Living Omnimedia Inc
) and General Nutrition Centers, Inc. ("GNC"), to launch assorted
lines of pet products. Moreover, the company added
The Walt Disney Company
) pet apparel and toys to its product portfolio.
By categories, Merchandise sales grew 4.8% to $1,509.4
million, whereas Services sales increased 5.8% to $191.6 million.
Other revenues in the quarter came in at $9.6 million, up 3.5%
year over year.
PetSmart registered 3.5% growth in comparable-store sales,
with a 0.8% rise in comparable transactions. The company now
expects comparable-store sales to increase by 3%-4% in second
quarter and fiscal 2013.
Benefiting from its top-line growth, gross profit increased
6.5% year over year to $529.7 million. Moreover, gross margin
expanded 45 basis points to 31%, reflecting lower cost of sales
as a percentage of revenue.
PetSmart's operating income remains strong, portraying growth
of 8.5% to $167.5 million. Alongside, operating margin expanded
approximately 30 basis points to 9.8%.
Going forward, PetSmart expects gross margins to remain flat
or rise marginally in fiscal 2013, while
EBT margin is expected to increase slightly. Moreover,
EBT margin is expected to increase 40 to 50 basis points during
the second quarter.
During the quarter, PetSmart opened 13 stores and closed 2,
bringing the total store count to 1,289. Moreover, it currently
operates 196 PetsHotel.
The company ended the quarter with cash and cash equivalents
of $253 million, capital lease obligations of $462.4 million and
shareholders' equity of $1,051.3 million.
During the quarter, PetSmart generated operating cash flow of
$147 million and incurred capital expenditures of $35 million.
Furthermore, the company repurchased shares worth $180 million
and had no borrowings under its credit facility.
Other Stock to Consider
The other stock that you may want to consider as our model
shows that it has the right combination of elements to post an
earnings beat this quarter:
Foot Locker Inc
) with an Earnings ESP of +2.30% and a Zacks Rank #2 (Buy).
DISNEY WALT (DIS): Free Stock Analysis Report
FOOT LOCKER INC (FL): Free Stock Analysis
MARTHA STWT LIV (MSO): Free Stock Analysis
PETSMART INC (PETM): Free Stock Analysis
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