EX-99.1 2 p16335exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(PETSMART LOGO)
CONTACT:
PetSmart Investor Relations
(623) 587-2025
PetSmart Reports Results for the Third Quarter of 2009
Earnings of $0.31 per Share; Comp Sales Growth of 0.3 Percent; Net Sales
Growth of 3.5 Percent; Services Sales Growth of 8.0 Percent
PHOENIX, AZ—(November 18, 2009) — PetSmart, Inc. (NASDAQ: PETM) today reported net income of $38.1 million, or $0.31 per share, for the third quarter of 2009. That compares with net income of $35.8 million, or $0.28 per share, for the third quarter of 2008.
Net sales for the third quarter of 2009 increased 3.5 percent to $1.29 billion, compared to the third quarter of 2008. Comparable store sales — or sales in stores open at least a year — grew 0.3 percent in the third quarter. Pet services sales were $136.7 million, up 8.0 percent from the third quarter of last year.
“I am pleased to report our results for the third quarter with strong EPS growth and positive comparable store sales. Our ability to deliver positive comp sales, while still battling a challenging retail environment and a difficult inflationary comparison, continues to show the strength of the PetSmart brand and the loyalty of our customers even in tough times,” said Bob Moran, Chief Executive Officer and President.
Guidance
“We expect fourth quarter earnings per share between $0.52 and $0.56 and comparable store sales of flat to low single digits,” said Chip Molloy, Senior Vice President and Chief Financial Officer. “For the year, we are expecting earnings per share between $1.50 and $1.54.”
PetSmart increased cash, cash equivalents and restricted cash to $240 million and had zero borrowings on its credit facility at the end of the quarter. During the third quarter, the company purchased $35 million of PetSmart stock and distributed $12.5 million in dividend payments.
Conference call information
PetSmart management has scheduled a teleconference for 4:30 p.m. EST today to discuss results for the third quarter 2009. This teleconference will be webcast live for all investors at www.petm.com or www.streetevents.com. The webcast will be available until the company announces results for the fourth quarter of 2009. In addition, you can listen to the call live by dialing 866-818-1395 (within the United States and Canada) or 703-639-1379 (for international callers), code 1407089. A phone replay will be available through December 18, 2009, 11:59 p.m. EDT, at 888-266-2081 in the United States and Canada, or at 703-925-2533 for international callers, code 1407089.
About PetSmart
PetSmart, Inc. is the largest specialty pet retailer of services and solutions for the lifetime needs of pets. The company operates more than 1,149 pet stores in the United States and Canada, 161 in-store PetSmart PetsHotel® cat and dog boarding facilities, and is a leading online provider of pet supplies and pet care information (www.petsmart.com). PetSmart provides a broad range of competitively priced pet food and pet products; and offers complete pet training, pet grooming, pet boarding, Doggie Day Camp(SM) pet day care services and pet adoption services. Since 1994, PetSmart Charities, Inc., an independent 501(c)(3) non-profit animal welfare organization, has funded more than $87 million in grants and programs benefiting animal welfare organizations and, through its in-store pet adoption programs, has helped save the lives of more than 3.6 million pets.

 

 

Forward-looking statements
This news release contains forward-looking statements concerning our expectations for future performance, including the statements comprising our 2009 guidance. These “forward-looking statements” are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in general economic conditions; conditions affecting customer transactions and average ticket including, but not limited to, weather conditions or other seasonal events; our ability to compete effectively; disruption of our supply chain; our ability to effectively manage our growth and operations; changes in our cost structure; and changes in the legal or regulatory environment. Undue reliance should not be placed on such forward-looking statements as they speak only as of the date hereof, and we undertake no obligation to update these statements to reflect subsequent events or circumstances except as may be required by law. For additional information on these and other factors that arise when investing in PetSmart, please see our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K.
Follow PetSmart on Twitter www.twitter.com/PetSmartTLC
Find PetSmart on Facebook www.facebook.com/PetSmart

 

 

     
PetSmart, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share and store data)
(Unaudited)
                                                                 
    Thirteen Weeks Ended     Thirteen Weeks Ended     Thirty-Nine Weeks Ended     Thirty-Nine Weeks Ended  
    November 1, 2009     % of Sales     November 2, 2008     % of Sales     November 1, 2009     % of Sales     November 2, 2008     % of Sales  
Merchandise sales
   $ 1,157,647       89.4 %   $ 1,124,587       89.9 %   $ 3,496,995       89.0 %   $ 3,310,021       89.3 %
Services sales
     136,703       10.6 %     126,557       10.1 %     433,714       11.0 %     396,002       10.7 %
                 
Net sales
     1,294,350       100.0 %     1,251,144       100.0 %     3,930,709       100.0 %     3,706,023       100.0 %
                 
Cost of merchandise sales
     837,875       64.7 %     798,513       63.8 %     2,516,378       64.0 %     2,335,780       63.0 %
Cost of services sales
     100,299       7.7 %     94,935       7.6 %     311,491       7.9 %     289,773       7.8 %
                 
Total cost of sales
     938,174       72.5 %     893,448       71.4 %     2,827,869       71.9 %     2,625,553       70.8 %
                 
Gross profit
     356,176       27.5 %     357,696       28.6 %     1,102,840       28.1 %     1,080,470       29.2 %
 
                                                                
Operating, general and administrative expenses
     284,896       22.0 %     285,571       22.8 %     867,902       22.1 %     852,678       23.0 %
                 
Operating income
     71,280       5.5 %     72,125       5.8 %     234,938       6.0 %     227,792       6.1 %
 
                                                                
Interest expense, net
     (15,031 )     -1.2 %     (14,769 )     -1.2 %     (44,975 )     -1.1 %     (43,722 )     -1.2 %
                 
Income before income tax expense and equity in income from investee
     56,249       4.3 %     57,356       4.6 %     189,963       4.8 %     184,070       5.0 %
 
                                                                
Income tax expense
     (20,453 )     -1.6 %     (22,492 )     -1.8 %     (71,594 )     -1.8 %     (72,684 )     -2.0 %
Equity in income from investee
     2,274       0.2 %     959       0.1 %     4,927       0.1 %     2,896       0.1 %
                 
Net income
   $ 38,070       2.9 %   $ 35,823       2.9 %   $ 123,296       3.1 %   $ 114,282       3.1 %
                 
 
                                                                
Earnings per common share:
                                                                
Basic
   $ 0.31             $ 0.29             $ 1.00             $ 0.92          
 
                                                        
Diluted
   $ 0.31             $ 0.28             $ 0.98             $ 0.90          
 
                                                        
Weighted average shares outstanding:
                                                                
Basic
     121,661               124,122               123,163               124,308          
Diluted
     123,781               126,795               125,396               126,761          
 
                                                        
 
                                                                
Stores open at beginning of each period
     1,145               1,075               1,112               1,008          
Stores opened during each period
     7               32               43               104          
Stores closed during each period
     (3 )             —               (6 )             (5 )        
Stores open at end of each period
     1,149               1,107               1,149               1,107          
 
                                                        

 

PetSmart, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except par value)
Unaudited
                         
    November 1,     February 1,     November 2,  
    2009     2009     2008  
Assets
                        
Cash and cash equivalents
   $ 185,215     $ 126,314     $ 54,317  
Restricted cash
     55,250       —       —  
Receivables, net
     52,144       48,609       39,352  
Merchandise inventories
     608,274       584,011       612,246  
Deferred income taxes
     29,333       28,223       28,826  
Prepaid expenses and other current assets
     88,126       87,677       77,787  
 
                  
 
                        
Total current assets
     1,018,342       874,834       812,528  
 
                        
Property and equipment, net
     1,225,116       1,302,245       1,328,554  
Equity investment in affiliate
     30,865       25,938       26,242  
Deferred income taxes
     83,631       93,128       129,958  
Goodwill
     41,882       38,645       39,057  
Other noncurrent assets
     24,192       22,863       24,091  
 
                  
 
                        
Total assets
   $ 2,424,028     $ 2,357,653     $ 2,360,430  
 
                  
 
                        
Liabilities and Stockholders’ Equity
                        
Accounts payable and bank overdraft
   $ 179,709     $ 194,630     $ 196,903  
Accrued payroll, bonus and employee benefits
     103,526       88,337       93,484  
Accrued occupancy expenses and deferred rents
     65,495       55,642       58,718  
Short-term debt
     —       —       50,000  
Current maturities of capital lease obligations
     36,151       32,233       30,873  
Other current liabilities
     126,745       107,315       126,120  
 
                  
Total current liabilities
     511,626       478,157       556,098  
 
                        
Capital lease obligations
     545,226       553,760       558,518  
Deferred rents
     91,695       92,155       92,071  
Other noncurrent liabilities
     97,225       89,445       92,980  
 
                  
 
                        
Total liabilities
     1,245,772       1,213,517       1,299,667  
 
                  
 
                        
Stockholders’ Equity:
                        
Preferred stock; $.0001 par value
     —       —       —  
Common stock; $.0001 par value
     16       16       16  
Additional paid-in capital
     1,137,132       1,117,557       1,108,260  
Retained earnings
     1,030,753       936,100       861,527  
Accumulated other comprehensive income (loss)
     2,053       (2,714 )     (2,217 )
Treasury stock
     (991,698 )     (906,823 )     (906,823 )
 
                  
 
                        
Total stockholders’ equity
     1,178,256       1,144,136       1,060,763  
 
                  
 
                        
Total liabilities and stockholders’ equity
   $ 2,424,028     $ 2,357,653     $ 2,360,430