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PetSmart, Inc. (NASDAQ: PETM) today announced financial results for the first quarter of 2014, and updated guidance for fiscal year 2014.
First Quarter Results
Earnings of $1.04 per share were up 6.1% compared to $0.98 per share in the first quarter of 2013. Net income increased 1.3% to $104 million, compared to $102 million in the first quarter of 2013.
Net sales for the first quarter of 2014 increased 1.1% to $1.7 billion. Comparable store sales, or sales in stores open at least one year, including online sales, fell 0.6%, with comparable transactions decreasing 2.2%. Services sales, which are included in net sales, grew 4.5% to $200 million.
The company generated $137 million in cash flows from operating activities, spent $32 million in capital expenditures, distributed $20 million in dividends, and repurchased $130 million of PetSmart stock. The company ended the quarter with $301 million in cash, cash equivalents and restricted cash and zero borrowings on its credit facility.
“We are pleased with the company’s ability to achieve earnings per share growth of 6.1% while continuing to drive earnings before tax margin expansion during the first quarter,” said David Lenhardt, President and Chief Executive Officer. “However, we did not achieve our sales goals, which were impacted by a challenging and volatile consumer environment and a competitive market.”
Updated Fiscal Year 2014 Guidance
Based on the Company’s year-to-date results and updated assumptions for the remainder of the year in light of the consumer environment and competitive market, the Company updated its fiscal year 2014 outlook.
Comparable store sales relatively flat
Net sales growth in the low-single digits
Earnings per share between $4.29 to $4.39
Operating cash flow between $600 to $625 million
Second Quarter 2014 Guidance
Comparable store sales growth flat to slightly down
Earnings per share of $0.92 to $0.96
Conference Call Information
PetSmart management has scheduled a teleconference for 10:00 a.m. EDT on May 21, 2014 to discuss results for the first quarter 2014. This teleconference will be webcast live for all investors at
www.petm.com. The webcast will be available until the company announces results for the second quarter of 2014. In addition, you can listen to the call live by dialing 866-814-1933 (within the United States and Canada) or 703-639-1365 (for international callers), code 1637996.
A phone replay will be available through June 21, 2014, 11:59 p.m. EDT, at 888-266-2081 in the United States and Canada, or at 703-925-2533 for international callers, code 1637996. The announcement will also be archived at
About PetSmartPetSmart, Inc. (NASDAQ: PETM) is the largest specialty pet retailer of services and solutions for the lifetime needs of pets. The company employs approximately 53,000 associates and operates more than 1,340 pet stores in the United States, Canada and Puerto Rico, 200 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. Through its in-store pet adoption partnership with PetSmart Charities® and PetSmart Charities® of Canada, PetSmart has helped save the lives of more than 5.7 million pets since 1994. PetSmart Charities, Inc. and PetSmart Charities of Canada (collectively “PetSmart Charities”) are independent, nonprofit organizations that save the lives of homeless pets and reduce shelter intake through spay and neuter efforts. In 2013, nearly 440,000 dogs and cats found homes through PetSmart Charities’ adoption centers in all PetSmart stores and by sponsoring community adoption events. PetSmart Charities is the leader in granting money to help pets in need, with more than $34 million given in 2013 throughout North America.
This news release contains forward-looking statements concerning our expectations for future performance, including the statements comprising our 2014 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
May 4, 2014
% of Sales
May 5, 2013
% of Sales
Cost of merchandise sales
Cost of services sales
Cost of other revenue
Total cost of sales
Operating, general, and administrative expenses
Interest expense, net
Income before income tax expense and equity income from Banfield