Petco Animal Supplies
beat Wall Street estimates for second-quarter profit and raised its earnings guidance as more pet owners lavished nonessentials on their animal companions.
The No. 2 pet-supply chain in the U.S. said net income rose 36% to $13.5 million, or 23 cents per share, compared with earnings of $9.9 million, or 17 cents a share, in the previous year.
Gross profit margin also increased to 32.6% from 30.6% in the year-ago period, with customers favoring high-margin items such as pet accessories and services.
Excluding one-time charges, the company earned $14.4 million, or 25 cents a share. On that basis, it beat analysts' estimates of 19 cents a share, according to Thomson First Call.
Petco sales rose 12.4% to $398.4 million, from $354.5 million a year ago, also surpassing estimates of $393 million. Same-store sales grew 6.1%.
The chain raised its full-year estimate to between $1.11 and $1.13 per share, excluding items, above analysts' average forecast of $1.04 a share and the company's own projection of $1.02 to $1.04 per share. It earned 90 cents per share in 2002.
Petco predicted that comparable-store sales will rise 6% in 2003.
It also provided favorable guidance for third-quarter earnings of 25 cents to 26 cents a share, above Wall Street estimates of 24 cents per share.
Petco shares were up $2.93, or 11.9%, to $27.46 in morning trading at the