Petco Write-Off Leads to Loss

Petco(PETC Quote) posted a fourth-quarter loss of $18.2 million, or 6 cents a share, compared with a year-ago profit of $8.5 million, or 21 cents a share. This year's results include a $37 million loss related to the write-off of the company's terminated investment in a Canadian pet-supplies chain, as well as $2.5 million in stock-based compensation expenses related to its IPO.

Excluding the one-time costs, the pet supply store earned $15.7 million, or 27 cents a share, up from $9.7 million, or 17 cents a share, in the year-ago quarter, due primarily to improved gross margins and higher same-store sales.

Sales for the quarter rose 7% to $363.7 million, while same-store sales rose 9%.

For the first quarter, the company expects earnings before charges of 12 cents to 13 cents a share, up from 5 cents a share in the year-ago quarter. Same-store sales are expected to rise about 8% in the first quarter, and 7% for the full year. The company also expects to open about 60 new superstores in 2002 while still in the early stages of its expansion program.

Shares of Petco were recently trading up 3.86% to $22.33 after closing at $21.50 Monday.