Earnings Preview: PetSmart

| About: PetSmart, Inc (PETM)

PetSmart (NASDAQ:PETM) is expected to report Q2 earnings after market close Thursday, Aug. 28, with a conference call scheduled for 4:30 pm ET.

Guidance

Analysts are looking for a profit of 28c on revenue of $1.22B. The consensus range is 27c to 29c for EPS, and revenue of $1.2B to $1.24B, according to First Call. In May, PetSmart forecast Q2 EPS 26c to 30c on same-store sales growth in the low-single digits and FY08 EPS $1.51 to $1.59 vs. First Call consensus of $1.50 on sales growth in the high single digits and SSS growth in the low- to mid-single digits.

Analyst Views

In a note to clients, Deutsche Bank's Mike Baker said that PetSmart's ability to pass on higher inflation to its customers could also help it produce even better earnings and comparables going forward. Additionally, Baker said that the company presents a "relatively good defensive option" for investors seeking some exposure to the retail sector. The analyst, who has a Buy rating and $26 price target on shares, said data points suggest strong comps in the Q2, which could see an acceleration from 3% growth in Q1.

Analysts and investors will listen for management comments on full year guidance.