PetSmart's first-quarter profit increases 12%


After the closing bell yesterday, PetSmart (NASDAQ: PETM) announced that its first-quarter profit increased 12%. The results were driven by higher merchandise and service sales.

PETM earned $46.3 million, or 37 cents per share -- a nickel better than last year's same-quarter results. The firm also topped Wall Street's expectations, which called for earnings of 30 cents per share. Quarterly revenue increased 9% to $1.33 billion, which fell short of the consensus estimate of revenue of $1.35 billion.

The company's merchandise sales increased 9% to $1.18 billion, with pet service sales increasing 10% to $142.8 million.
Turning an eye to the future, PETM expects second-quarter profit between 26 cents and 30 cents per share (the Street expects 29 cents per share) and full-year earnings between $1.42 and $1.52 per share (the Street expects $1.47 per share). The full-year forecast is up from an earlier forecast range between $1.40 and $1.50 per share.

While the results topped the consensus estimate, Goldman Sachs decided to downgrade the firm to "neutral" from "buy." The stock is lower in pre-market trading. The shares are marching higher, a trend that started back in November 2008. The stock has faced resistance in the $24.50 region in the past, and it is approaching this area again. A failure of this test could send the stock reeling, but the fall wouldn't be too far. PETM's 10-week moving average is advancing through the $19 region, so it could cushion the blow if PETM is rejected by overhead resistance.
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Last updated: February 09, 2012: 01:31 PM

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