EX-99.1 2 p14383exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
SOURCE: PetSmart
(PETSMART LOGO)
March 4, 2009 04:02 ET
PetSmart Reports Results for the Fourth Quarter and Fiscal 2008
Fourth Quarter Earnings of $0.62 per Share; Comp Sales Growth of 3.0 Percent for the Fourth Quarter and 3.8 Percent for the Fiscal Year
PHOENIX, AZ — (Marketwire — March 4, 2009) — PetSmart, Inc. (NASDAQ: PETM) today reported net income of $78.4 million, or $0.62 per share, for the fourth quarter of 2008. That compares with net income of $75.4 million, or $0.59 per share, for the fourth quarter of 2007, which included a 14th week as fiscal 2007 was a 53-week year. For all of fiscal 2008, the company reported net income of $192.7 million, or $1.52 per share.
Net sales for the 13-week fourth quarter of 2008 increased 2.3 percent to $1.36 billion, compared to the 14-week fourth quarter of 2007. The impact of the 14th week on net sales was approximately $90 million, including $8 million in pet services sales. Comparable store sales — or sales in stores open at least a year — grew 3.0 percent in the fourth quarter. During the fourth quarter, pet services sales were $130.7 million, up 6.9 percent from the 14-week fourth quarter of last year.
“Despite the macro economic pressures, I am proud to announce that PetSmart was still able to deliver on both sales and earnings per share growth for the quarter,” said Phil Francis, Chairman and Chief Executive Officer. “We are very fortunate here at PetSmart. We are a leader in an industry that services a strong emotional bond between pet parents and their loved ones. Our associates understand that bond and take pride in supporting it.”
PetSmart generated $5.07 billion in net sales in the 52-week fiscal 2008, up from $4.67 billion in net sales for the 53-week fiscal 2007. Comparable store sales grew 3.8 percent in 2008. For the 52-week fiscal 2008, pet services sales were $526.7 million, or a 15.8 percent growth over the 53-week fiscal 2007.

 

 

Guidance
“We continue to remain cautious about the economic climate. For the year, we anticipate low single-digit sales comps, total sales growth in the mid to high single digits, services growth in the mid to high single digits and earnings per share of $1.40 to $1.50,” said Chip Molloy, Senior Vice President and Chief Financial Officer. “We believe we have the combination of a strong balance sheet and a business model that generates significant cash flow. This should allow us to manage through a challenging economic environment and gain strength along the way.”
PetSmart increased cash and cash equivalents to $126 million and had zero borrowings on its credit facility at the end of the fiscal year. During the year, the company purchased 2.3 million PetSmart shares for $50 million and distributed $15 million in dividend payments.
2008 Highlights
•   Opened 112 new stores and closed 8 stores
 
•   Opened 45 new PetsHotels
 
•   Cash and cash equivalents of $126 million and zero outstanding borrowing on our credit facility
 
•   Purchased 2.3 million shares
 
•   Paid quarterly dividends of $0.03 per share
2009 Annual Guidance
•   Total sales growth: Mid-to-high-single digits
 
•   Comparable store sales growth: Low-single digits
 
•   Services sales growth: Mid-to-high-single digits
 
•   Net interest expense: Approximately $60 million for the fiscal year
 
•   Income tax rate: 38.5 percent to 39 percent
 
•   Earnings per share: $1.40 to $1.50 per share
 
•   Capital expenditures: Between $115 million to $125 million
 
•   Net new store growth: 40 to 42
 
•   PetsHotel growth: 20
Conference call information
PetSmart management has scheduled a teleconference for 4:30 p.m. (EST) today to discuss results for the fourth quarter and fiscal year 2008 as well as the current outlook for 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 first quarter of 2009. In addition, you can listen to the call live by dialing 866-835-8845 (within the United States and Canada) or 703-639-1408 (for international callers), code 1325708. A phone replay will be available through March 20, 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 1325708.

 

 

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 1,112 pet stores in the United States and Canada, 142 in-store PetSmart PetsHotels® 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 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 3.5 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.
CONTACT:
PetSmart Investor Relations
(623) 587-2025

 

 

PetSmart, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except par value)
Unaudited
                 
    February 1,     February 3,  
    2009     2008  
 
                
Assets
                
Cash and cash equivalents
   $ 126,314     $ 58,322  
Receivables, net
     48,609       49,341  
Merchandise inventories
     584,011       501,212  
Deferred income taxes
     28,223       28,644  
Prepaid expenses and other current assets
     87,677       73,231  
 
            
 
                
Total current assets
     874,834       710,750  
 
                
Property and equipment, net
     1,302,245       1,230,770  
Equity investment in affiliate
     25,938       23,346  
Deferred income taxes
     93,128       126,665  
Goodwill
     38,645       44,333  
Intangible assets, net
     993       1,457  
Other noncurrent assets
     21,870       29,936  
 
            
 
                
Total assets
   $ 2,357,653     $ 2,167,257  
 
            
 
                
Liabilities and Stockholders’ Equity
                
Accounts payable and bank overdraft
   $ 194,630     $ 172,352  
Accrued payroll bonus and employee benefits
     88,337       84,727  
Accrued occupancy expenses and deferred rents
     55,642       46,955  
Short-term debt
     —       30,000  
Current maturities of capital lease obligations
     32,233       24,982  
Other current liabilities
     107,315       137,330  
 
            
Total current liabilities
     478,157       496,346  
 
                
Capital lease obligations
     553,760       508,765  
Deferred rents
     92,155       88,954  
Other noncurrent liabilities
     89,445       86,595  
 
            
 
                
Total liabilities
     1,213,517       1,180,660  
 
            
 
                
Stockholders’ Equity:
                
Preferred stock; $.0001 par value
     —       —  
Common stock; $.0001 par value
     16       16  
Additional paid-in capital
     1,117,557       1,079,190  
Retained earnings
     936,100       758,674  
Accumulated other comprehensive income
     (2,714 )     5,585  
Treasury stock
     (906,823 )     (856,868 )
 
            
 
                
Total stockholders’ equity
     1,144,136       986,597  
 
            
 
                
Total liabilities and stockholders’ equity
   $ 2,357,653     $ 2,167,257  
 
            

 

 

PetSmart, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share and store data)
(Unaudited)
                                                                 
    Thirteen Weeks Ended     Fourteen Weeks Ended     Fifty-Two Weeks Ended     Fifty-Three Weeks Ended  
    February 1, 2009     % of Sales     February 3, 2008     % of Sales     February 1, 2009     % of Sales     February 3, 2008     % of Sales  
 
                                                                
Merchandise sales
   $ 1,228,542       90.4 %   $ 1,206,183       90.8 %   $ 4,538,563       89.6 %   $ 4,217,716       90.3 %
Services sales
     130,728       9.6 %     122,251       9.2 %     526,730       10.4 %     454,940       9.7 %
                 
Net sales
     1,359,270       100.0 %     1,328,434       100.0 %     5,065,293       100.0 %     4,672,656       100.0 %
 
                                                                
Cost of merchandise sales
     849,040       62.5 %     813,973       61.3 %     3,184,819       62.9 %     2,901,415       62.1 %
Cost of services sales
     95,267       7.0 %     93,971       7.1 %     385,041       7.6 %     334,420       7.2 %
                 
Total cost of sales
     944,307       69.5 %     907,944       68.3 %     3,569,860       70.5 %     3,235,835       69.3 %
                 
 
                                                                
Gross profit
     414,963       30.5 %     420,490       31.7 %     1,495,433       29.5 %     1,436,821       30.7 %
 
                                                                
Operating, general and administrative expenses
     272,902       20.1 %     289,907       21.8 %     1,125,579       22.2 %     1,085,308       23.2 %
                 
Operating income
     142,061       10.5 %     130,583       9.8 %     369,854       7.3 %     351,513       7.5 %
 
                                                                
Gain on sale of investment
     —       0.0 %     —       0.0 %     —       0.0 %     95,363       2.0 %
Interest income
     192       0.0 %     316       0.0 %     579       0.0 %     6,813       0.1 %
Interest expense
     (15,227 )     -1.1 %     (14,696 )     -1.1 %     (59,336 )     -1.2 %     (51,496 )     -1.1 %
Income before income tax expense and equity in income from investee
     127,026       9.3 %     116,203       8.7 %     311,097       6.1 %     402,193       8.6 %
 
                                                                
Income tax expense
     (48,334 )     -3.6 %     (40,881 )     -3.1 %     (121,019 )     -2.4 %     (145,180 )     -3.1 %
Equity in income from investee
     (304 )     0.0 %     78       0.0 %     2,592       0.1 %     1,671       0.0 %
                 
Net income
   $ 78,388       5.8 %   $ 75,400       5.7 %   $ 192,670       3.8 %   $ 258,684       5.5 %
                 
 
                                                                
Earnings per common share:
                                                                
Basic
   $ 0.63             $ 0.60             $ 1.55             $ 1.99          
 
                                                        
Diluted
   $ 0.62             $ 0.59             $ 1.52             $ 1.95          
 
                                                        
 
                                                                
Weighted average shares outstanding:
                                                                
Basic
     124,444               126,134               124,342               129,851          
Diluted
     126,783               128,867               126,751               132,954          
 
                                                                
Stores open at beginning of each period
     1,107               992               1,008               908          
Stores opened during each period
     8               21               112               115          
Stores closed during each period
     (3 )             (5 )             (8 )             (15 )        
Stores open at end of each period
     1,112               1,008               1,112               1,008