PetSmart, Inc. (NASDAQ: PETM) today reported earnings of $0.75 per share, up 50% compared to $0.50 per share in the third quarter of 2011. Net income totaled $82 million in the third quarter of 2012, compared to $56 million in the third quarter of 2011.
Total sales for the third quarter of 2012 increased 9% to $1.6 billion. The increase in net sales was partially impacted by $1 million in favorable foreign currency fluctuations. Comparable store sales, or sales in stores open at least a year, grew 6.5%, benefitting from comparable transactions growth of 2.3%. Services sales, which are included in total sales, grew 8% to $175 million.
During the third quarter, the company generated $133 million in operating cash flow, spent $40 million in capital expenditures, distributed $18 million in dividends, and repurchased $60 million of PetSmart stock. The company ended the quarter with $370 million in cash, cash equivalents and restricted cash and zero borrowings on its credit facility.
“Our performance in the third quarter was due to strength across all three merchandising categories, as well as across services,” said Bob Moran, Chairman and Chief Executive Officer. “We are executing well, and continue to define the pet specialty customer experience.”“As a reminder, 2012 contains a 53 rd week. For all of 2012, we anticipate comparable store sales growth of 6% to 7%, and total sales growth in the 10% to 11% range. We are raising our earnings per share guidance from a previous range of $3.30 to $3.40, to our current expectations of $3.47 to $3.51. 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 fourth quarter of 2012, we are expecting comparable store sales growth in the mid-single digit range, and earnings per share between $1.16 and $1.20, including the impact of the extra week.” The company also announced that Chip Molloy, Executive Vice President and Chief Financial Officer, will be resigning in early 2014, to allow him to spend more time with his family, who now live in the southeast. Mr. Molloy will continue as Executive Vice President and Chief Financial Officer until June 2013, and will remain with the company as a special advisor until March 2014. “Chip has been an invaluable member of our management team over the past five years, and has been instrumental in designing a framework and creating a culture within the company that consistently pushes us to always consider our shareholders,” said Mr. Moran. “It is this foundation of focus and discipline that has contributed to our success over the past four years, and will remain a key pillar of our strategy well into the future.”