PetSmart Claws Past Estimates

The pet-supplies seller gives an in-line guidance for the full year.
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PetSmart

(PETM)

reported higher-than-expected third-quarter earnings Wednesday and gave an in-line forecast for the holiday period.

The pet-supplies retailer posted a third-quarter profit of $31.7 million, or 23 cents a share, up from $31.1 million, or 21 cents a share, a year earlier. Analysts polled by Thomson First Call anticipated earnings of 21 cents a share for the most recent period.

The latest quarter's EPS included a 1-cent tax benefit and a 1-cent charge related to a distribution center project; EPS in the year-earlier quarter included a 2.5-cent tax benefit.

Sales climbed 14% to $1.03 billion from $907.7 million, while same-store sales rose 6.8%. Wall Street expected sales of $1.03 billion.

The top line was boosted by sales of pet services, which jumped 25% to $89.7 million in the quarter.

Looking ahead, PetSmart said it expects same-store sales growth in the mid-single-digit percentage for the fourth quarter and all of 2006.

"While we remain cautious about the prospects for the overall economy and the outlook for retail during the remainder of the year, we are well prepared for the holiday season," said Chairman and CEO Phil Francis in a statement.

PetSmart expects fourth-quarter earnings of 54 cents to 56 cents a share, compared with analysts' average forecast of 56 cents. The company sees full-year earnings of $1.31 to $1.33 a share, at or above Wall Street's target of $1.31.

Shares of PetSmart recently were up 45 cents, or 1.5%, to $31.41 in after-hours trading.