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PetSmart, Inc Message Board

  • not_a_short not_a_short Oct 9, 2001 11:52 PM Flag

    PETM in a recession

    With PETM trading at 25x this years expected earnings, it is clear that investors are discounting an earnings recovery well beyind this year. I believe the modest improvement in SSS growth last quarter is behind this optimism. If we do enter a significant recession, I wonder how well SSS growth will hold up. PETM has not endured a recession in its operating history (at least not since it has been public) and it is unclear to me how recession-resistant selling premium pet food and supplies really is.

    If PETM fails to deliver on SSS growth in Q3, I would not be surprised to see the high P/E multiple contract.


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    • Independent shops and breeders are worse than the chains in their day-to-day treatment of animals, but more merciful on the kill side. But not because they love animals, they are just not willing to "write the animal off". Breeders don't want to take the loss and shop owners are reluctant to do the suppliers dead animal paperwork. Much easier to dump the defective animal on the customers and wait for them to belly-ache about it. The pet farms that supply shops are just as bad as the news media portrays them to be. They put a sign on a fence proclaiming about how much they love animals, but behind the fence, it's like some form of animal concentration camp. If you say something long enough (true or untrue),people will eventually believe it. Breakfast is not the most important meal of the day, Lunch is!
      Take it from me, I know of what I speak.

      Fatso of McButterville

    • Your Arithmetic is poor.

      As you say, the market looks to the future and they know the future of PETM is very good.

      I expect it will be even better after they acquire the assets of PETC at a bargain price.

      S Marty Pants (member of the award winning On D Ball team)

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