PetSmart Reports Results for the First Quarter 2012
Q1 Earnings up 39% to $0.85 Per Share; Comp Sales of 7.4%; Total Sales up 9.4%; Comp Transactions up 3.3%
PHOENIX--(BUSINESS WIRE)-- PetSmart, Inc. (NASDAQ: PETM) today 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 (PETM) 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.
Conference call information
PetSmart management has scheduled a teleconference for 4:30 p.m. EDT on May 22, 2012 to discuss results for the first quarter 2012. 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 2012. In addition, you can listen to the call live by dialing 866-847-7863 (within the United States and Canada) or 703-639-1429 (for international callers), code 1578602.
A phone replay will be available through June 22, 2012, 11:59 p.m. EDT, at 888-266-2081 in the United States and Canada, or at 703-925-2533 for international callers, code 1578602.
PetSmart, Inc. (NASDAQ: PETM) is the largest specialty pet retailer of services and solutions for the lifetime needs of pets. The company employs approximately 50,000 associates and operates more than 1,241 pet stores in the United States, Canada and Puerto Rico, over 194 in-store PetSmart ® PetsHotel® 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 CampSM 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 $165 million in grants and programs benefiting animal welfare organizations. Through its in-store pet adoption partnership with PetSmart Charities ®, PetSmart has helped save the lives of nearly 5 million pets.
This news release contains forward-looking statements concerning our expectations for future performance, including the statements comprising our 2012 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.
|PetSmart, Inc. and Subsidiaries|
|Condensed Consolidated Statements of Operations|
|(in thousands, except per share and store data)|
|Thirteen Weeks Ended||Thirteen Weeks Ended|
|April 29, 2012||% of Sales||May 1, 2011||% of Sales|
|Cost of merchandise sales||994,508||61.0||%||919,476||61.7||%|
|Cost of services sales||128,691||7.9||%||120,554||8.1||%|
|Cost of other revenue||9,320||0.6||%||8,921||0.6||%|
|Total cost of sales||1,132,519||69.5||%||1,048,951||70.4||%|
|Operating, general and administrative expenses||343,023||21.0||%||319,732||21.5||%|
|Interest expense, net||(14,129||)||-0.9||%||(14,447||)||-1.0||%|
Income before income tax expense and equity in income from Banfield
|Income tax expense||(48,172||)||-3.0||%||(38,906||)||-2.6||%|
|Equity in income from Banfield||2,633||0.2||%||2,575||0.2||%|
|Earnings per common share:|
|Weighted average shares outstanding:|
|Stores open at beginning of each period||1,232||1,187|
|Stores opened during each period||14||5|
|Stores closed during each period||(5||)||-|
|Stores open at end of each period||1,241||1,192|
|PetSmart, Inc. and Subsidiaries|
|Condensed Consolidated Balance Sheets|
|(In thousands, except par value)|
|April 29,||January 29,||May 1,|
|Cash and cash equivalents||$ 268,928||$ 342,892||$ 228,097|
|Deferred income taxes||51,381||51,381||44,999|
|Prepaid expenses and other current assets||81,716||80,352||72,286|
|Total current assets||1,236,472||1,263,888||1,104,738|
|Property and equipment, net||1,035,759||1,067,028||1,100,910|
|Equity investment in Banfield||26,597||37,824||29,473|
|Deferred income taxes||79,798||93,485||91,260|
|Other noncurrent assets||43,036||37,775||36,802|
|Total assets||$ 2,466,400||$ 2,544,084||$ 2,408,780|
|Liabilities and Stockholders' Equity|
|Accounts payable and bank overdraft||$ 246,612||$ 199,177||$ 154,435|
|Accrued payroll, bonus and employee benefits||126,195||158,079||114,608|
|Accrued occupancy expenses and deferred rents||69,456||68,584||60,349|
|Current maturities of capital lease obligations||55,920||54,219||47,176|
|Other current liabilities||177,511||201,247||168,690|
|Total current liabilities||675,694||681,306||545,258|
|Capital lease obligations||496,004||505,273||515,139|
|Other noncurrent liabilities||115,644||122,273||119,693|
|Preferred stock; $.0001 par value||-||-||-|
|Common stock; $.0001 par value||17||16||16|
|Additional paid-in capital||1,352,889||1,312,996||1,238,604|
|Accumulated other comprehensive income||6,706||5,490||8,154|
|Less: Treasury stock||(1,846,635)||(1,671,727)||(1,437,322)|
|Total stockholders' equity||1,099,476||1,153,829||1,143,986|
|Total liabilities and stockholders' equity||$ 2,466,400||$ 2,544,084||$ 2,408,780|
Investor Relations, 623-587-2025
Source: PetSmart, Inc.Copyright Business Wire 2012