PetSmart Posts 12% Jump in Profit

Shoppers may be trading down or eliminating purchases for themselves -- but not, apparently, for their pets.

PetSmart(PETM Quote) posted a 12% jump in first-quarter earnings, beating Wall Street's expectations and raising its full-year forecast.

During the ,the company earned $46.3 million, or 37 cents a share, compared with $41.2 million, or 32 cents a share, in the year-ago period. Analysts expected earnings of 30 cents.

Sales grew 9.5% to $1.33 billion, as consumers were drawn to PetSmart for its value offers. Wendy Diamond, former judge on the CBS show Greatest American Dog and editor in chief of Animal Fair magazine says consumers can save over 50% if they buy a 40 pound bag of dog food or cat food at PetSmart, compared to purchasing a similar product at a regular store.

The fear has been that shoppers can easily go to Wal-Mart Stores (WMT Quote), Target (TGT Quote) or warehouse clubs like Costco(COST Quote) to get the same deals -- but with boarding, grooming services and training, PetSmart has few competitors.

The company now expects full-year earnings in the range of $1.42 to $1.52 a share, up from its prior forecast of $1.40 to $1.50 per share. It foresees earnings of 26 cents to 30 cents a share in the second quarter.

Shares of the company rose 2.5% to $22.85 in after-market trading.