Margins, Openings Rise at PetsMart

PetsMart's ( PETM) first-quarter profit rose slightly, as the company nearly quadrupled its new store openings and upped advertising spending.

The company also affirmed its second-quarter earnings outlook and raised its full-year guidance. Both are in line with estimates.

The company earned $24.6 million, or 17 cents a share, in the quarter ended May 4, compared with $22.1 million, or 17 cents a share, in the previous-year quarter. Analysts were expecting 16 cents a share. The company said it had 6.2 million fewer shares outstanding during last year's quarter.

Total sales were $696.8 million, up from $645.8 million in revenue last year. Same-store sales rose 4.8% -- lower than last year's same-store sales growth of 12%. But the company said gross margins were up 140 basis points.

Petsmart said it opened 19 new stores during the quarter, compared with five new stores in the same period last year.

For the second quarter, the company said it expects same-store sales to grow 5% to 6% and that it is comfortable with analysts' EPS forecast of 17 cents. Petsmart earned 15 cents a share in the second quarter last year.

In 2003, the company expects to earn 88 cents to 90 cents a share and have a same-store sales growth of 6% to 8%. Analysts expect full-year earnings of 88 cents a share, on average. The company earned 73 cents a share last year.

Recently, shares of the Phoenix-based company were rising 3.8% in morning trading to $17.16 on the news.

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