NEW YORK (TheStreet) -- PetSmart Inc. (PETM - Get Report) has decided to follow in the footsteps of its rival Petco and stop selling cat and dog treats made in China, due to concerns the products are making animals sick, the Associated Press reports.
The FDA has investigated the claims but were not able to prove the treats were causing the illnesses in pets.
However, since 2007 the FDA has received over 4,800 complaints of illnesses in pets and over 1,000 reports of dog deaths after the animals ate chicken, duck, or sweet potato jerky treats made in China, AP said.
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- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market, PETSMART INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to $273.91 million or 2.81% when compared to the same quarter last year. In addition, PETSMART INC has also modestly surpassed the industry average cash flow growth rate of -4.54%.
- PETSMART INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PETSMART INC increased its bottom line by earning $4.03 versus $3.55 in the prior year. This year, the market expects an improvement in earnings ($4.47 versus $4.03).
- The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that PETM's debt-to-equity ratio is low, the quick ratio, which is currently 0.54, displays a potential problem in covering short-term cash needs.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.6%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: PETM Ratings Report
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