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.
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.
Fatty agrees, Recession or no recession, Leonardo Green and Company have to make their PETC investment "pay off". By accumulating Petsmart shares, they are taking control of the company that will benefit the most from PETC's planned demise. Consolidation through attrition, it's the only way to beat those pesky anti-trust regulators and stamp out competition. Get ready to pay more for your pet supplies. It's a done deal.
you must have been away...we'be been in a recession for almost 6 months now...as warren buffet says it will be deep and extended...if you think we havent been in before the attacks ur crazy...i dont care what the economic formula is. Greenspan hasnt cut rates 9 times in 9 months because he is bored...greenspan says we've been in one since March