PetSmart Reports Results for the Second Quarter 2012

Q2 Earnings up 31% to $0.71 per Share; Comp Sales of 7.0%; Total Sales up 9%; Comp Transactions up 2.9%

PHOENIX–Aug. 15, 2012– PetSmart, Inc. today reported earnings of $0.71 per share, up 31% compared to $0.54 per share in the second quarter of 2011. Net income totaled $79 million in the second quarter of 2012, compared to $61 million in the second quarter of 2011.

Total sales for the second quarter of 2012 increased 9% to $1.6 billion. The increase in net sales was partially impacted by $4 million in unfavorable foreign currency fluctuations. Comparable store sales, or sales in stores open at least a year, grew 7.0%, benefitting from comparable transactions growth of 2.9%. Services sales, which are included in total sales, grew 7% to $191 million.
During the second quarter, the company generated $104 million in operating cash flow, spent $35 million in capital expenditures, distributed $15 million in dividends, and repurchased $47 million of PetSmart stock. The company ended the quarter with $354 million in cash, cash equivalents and restricted cash and zero borrowings on its credit facility.

“Our performance in the second quarter was due to strength across all three merchandising categories, as well as across services,” said Bob Moran, Chairman and Chief Executive Officer. “We’ve built a culture of innovation and differentiation, showing our customers how we’re different from the competition, and how we offer the best choice.”

“As a reminder, 2012 contains a 53rd week. For all of 2012, we anticipate comparable store sales growth in the mid-single digit range, and total sales growth in the 10% to 11% range. We are raising our earnings per share guidance from a previous range of $3.19 to $3.31, to our current expectations of $3.30 to $3.40. The impact of the extra week is estimated to be $120 million in sales and $0.16 in EPS,” said Chip Molloy, Executive Vice President and Chief Financial Officer. “For the third quarter of 2012, we are expecting comparable store sales growth in the mid-single digit range, and earnings per share between $0.59 to $0.63.”