PHOENIX, AZ -- (MARKET WIRE) -- 05/21/08 -- PetSmart, Inc. (NASDAQ: PETM) today reported
net income of $41.2 million, or $0.32 per share, for the first fiscal
quarter of 2008. That compares with net income of $106.7 million, or $0.78
per share, for the first quarter of fiscal 2007, which included a $0.47 per
share net benefit from the sale of a portion of the Company's shares in MMI
Holdings, Inc.
Net sales for the first quarter of 2008 increased 9.1 percent to $1.2
billion, compared to the first quarter of 2007. Comparable store sales --
or sales in stores open at least a year -- grew 2.9 percent in the first
quarter, on top of 4 percent in the same period in 2007. During the first
quarter, pet services sales were $130.4 million, up 21.6 percent from the
first quarter of last year.
"Our top line performance for the quarter came in a bit higher than
expected and was helped by an increase in inflation partially offset by
continued weakness in traffic," said Phil Francis, chairman and CEO. "We
expect that these trends may continue throughout the year, so we are
focused on consistent and efficient execution and on outperforming in those
areas of the business that differentiate PetSmart from the competition. We
firmly believe that our robust offering of pet supplies and services under
one roof combined with our outstanding customer experience position us to
compete and thrive."
Guidance
"PetSmart delivered on its plan in the first quarter. Current trends
combined with the anniversary of some weakness in the back half of last
year make us feel good about delivering on our targets for all of 2008. For
the second quarter of fiscal 2008, we estimate comparable store sales
growth in the low-single digits and earnings per share in the range of
$0.26 to $0.30," said Chip Molloy, Chief Financial Officer. "As a reminder,
the second quarter of fiscal 2007 included a net benefit in gross margin of
approximately $4 million from favorable timing on rent reimbursement from
Banfield. We also had a combined benefit of approximately $7 million in
expenses from the impact of a reduction of insurance accruals and a
reduction in stock-base compensation expense."
2008 Full Year Guidance
-- Total sales growth: High single digits
-- Comparable store sales growth: Low- to mid-single digits
-- Operating income percentage: Relatively flat as a percentage of sales
-- Net interest expense: Approximately $15 million per quarter
-- Income tax rate: 38 percent to 39 percent
-- Earnings per share: In the range of $1.51 to $1.59 per share
-- Capital expenditures: $285 million or lower
-- Net new store growth: 100 to 104
-- PetsHotel growth: 45
Conference call information
PetSmart management has scheduled a teleconference for 4:30 p.m. (EDT)
today to discuss results for the first quarter of 2008 as well as the
current outlook. This teleconference will be Web-cast live for all
investors at www.petm.com or www.streetevents.com. The Web-cast will be
available until the company announces results for the second quarter of
2008. In addition, you can listen to the call live by dialing 866-802-4322
(within the United States and Canada) or 703-639-1319 (for international
callers), code 1233603. A phone replay will be available through June 5,
2008, at 888-266-2081 in the United States and Canada, or at 703-925-2533
for international callers, code 1233603.
About PetSmart
PetSmart, Inc. is the largest specialty pet retailer of services and
solutions for the lifetime needs of pets. The company operates more than
1,043 pet stores in the United States and Canada, a growing number of
in-store PetSmart PetsHotel® cat and dog boarding facilities, and is a
leading online provider of pet supplies and pet care information
(www.petsmart.com). PetSmart provides a broad range of competitively priced
pet food and pet products; and offers complete pet training, pet grooming,
pet boarding, doggie day camp and pet adoption services. Since 1994,
PetSmart Charities®, Inc., an independent 501(c)(3) non-profit animal
welfare organization, has funded more than $70 million in grants and
programs benefiting animal welfare organizations and, through its in-store
pet adoption programs, has helped save the lives of more than 3 million
pets.
Forward-looking statements
This news release contains forward-looking statements including statements
relating to future revenue growth and goals, and future business
opportunities that involve substantial risks and uncertainties. Such risks
and uncertainties include, but are not limited to, general economic
conditions, competitive forces and our ability to manage our operations and
growth. Actual results and developments may therefore differ materially
from those described in this release. For more information about PetSmart,
Inc., and risks arising when investing in PetSmart, Inc., you are directed
to the company's most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commission.
PetSmart, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
Unaudited
May 4, February 3,
2008 2008
----------- -----------
Assets
Cash and cash equivalents $ 55,709 $ 58,322
Receivables, net 43,380 49,341
Merchandise inventories 531,063 501,212
Deferred income taxes 46,893 46,765
Prepaid expenses and other current assets 76,348 73,231
----------- -----------
Total current assets 753,393 728,871
Property and equipment, net 1,270,554 1,230,770
Equity investment in affiliate 23,929 23,346
Deferred income taxes 107,009 108,544
Goodwill 43,564 44,333
Intangible assets, net 1,347 1,457
Other noncurrent assets 28,857 29,936
----------- -----------
Total assets $ 2,228,653 $ 2,167,257
=========== ===========
Liabilities and Stockholders' Equity
Accounts payable and bank overdraft $ 178,048 $ 172,352
Accrued payroll bonus and employee benefits 134,851 132,768
Accrued occupancy expenses and deferred rents 49,114 46,955
Short-term debt 26,000 30,000
Current maturities of capital lease
obligations 26,549 24,982
Other current liabilities 172,729 148,832
----------- -----------
Total current liabilities 587,291 555,889
Capital lease obligations 526,192 508,765
Deferred rents 90,661 88,953
Other noncurrent liabilities 26,966 27,053
----------- -----------
Total liabilities 1,231,110 1,180,660
----------- -----------
Stockholders' Equity:
Preferred stock; $.0001 par value - -
Common stock; $.0001 par value 16 16
Additional paid-in capital 1,083,784 1,079,190
Retained earnings 796,064 758,674
Accumulated other comprehensive income 4,528 5,585
Treasury stock (886,849) (856,868)
----------- -----------
Stockholders' equity 997,543 986,597
----------- -----------
Total liabilities and stockholders'
equity $ 2,228,653 $ 2,167,257
=========== ===========
PetSmart, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share and store data)
(Unaudited)
Thirteen Weeks Ended Thirteen Weeks Ended
----------------------- -----------------------
April 29,
May 4, 2008 % of Sales 2007 % of Sales
----------- ---------- ----------- ----------
Net sales $ 1,212,931 100.0% $ 1,111,625 100.0%
Cost of sales 856,563 70.6% 773,146 69.6%
----------- ---------- ----------- ----------
Gross profit 356,368 29.4% 338,479 30.4%
Operating, general and
administrative expenses 276,099 22.8% 261,894 23.6%
----------- ---------- ----------- ----------
Operating income 80,269 6.6% 76,585 6.9%
Gain on sale of investment - 0.0% 95,363 8.6%
Interest expense, net (13,742) -1.1% (8,825) -0.8%
----------- ---------- ----------- ----------
Income before income tax
expense and equity in
income from investee 66,527 5.5% 163,123 14.7%
Income tax expense (25,899) -2.1% (56,641) -5.1%
Equity in income from
investee, net of tax 583 0.0% 225 0.0%
----------- ---------- ----------- ----------
Net income $ 41,211 3.4% $ 106,707 9.6%
=========== ========== =========== ==========
Basic earnings per share $ 0.33 $ 0.80
=========== ===========
Diluted earnings per share$ 0.32 $ 0.78
=========== ===========
Weighted average shares
outstanding - basic 125,050 133,316
Weighted average shares
outstanding - diluted 127,419 136,372
----------- ---------- ----------- ----------
Stores open at beginning
of each period 1,008 908
Stores opened during each
period 35 23
Stores closed during each
period - (3)
Stores open at end of each
period 1,043 928
----------- ---------- ----------- ----------
CONTACT:
Tawni Adams
(623) 587-2686
PetSmart Media Line
623-587-2177
