PetSmart 1Q profit rises, company boosts outlook

Customers buy more, lifting PetSmart 1Q profit, and company raises outlook for the year

Associated Press

NEW YORK (AP) -- PetSmart Inc. said Wednesday that its net income grew 8 percent in the fiscal first quarter and raised its forecast for the year, sending the pet retailer's shares higher in aftermarket trading

The Phoenix company said a key sales measure had improved as customers made more purchases.

PetSmart stock rose $1.94, or 2.8 percent, to $71 in aftermarket trading. The shares fell 74 cents to $69.06 during the day.

The company earned $102.4 million, or 98 cents per share, in the quarter ended May 5. That's up from $94.7 million, or 85 cents per share, in the same months a year ago. Revenue rose 5 percent, to $1.71 billion from $1.63 billion.

Analysts were expecting net income of 96 cents per share on $1.72 billion in revenue, according to FactSet.

PetSmart said revenue from locations open at least a year grew 3.5 percent as transactions increased 0.8 percent. That's a key performance measure in retail because it leaves out results from stores that opened or closed in the last year.

Merchandise sales grew 5 percent to $1.51 billion and service revenue rose 6 percent to $191.6 million.

PetSmart now expects to earn between $3.82 and $3.94 per share for the year ending in January, while revenue grows 3 to 4 percent, implying a total of $7 billion to $7.03 billion. Previously the company had called for net income of $3.76 to $3.92 per share and said sales would grow 2 to 4 percent.

Analysts were projecting income of $3.92 per share and $7.02 billion in revenue.

The company also expects sales at stores open at least a year to grow 3 to 4 percent instead of 2 to 4 percent.

PetSmart said it should earn between 82 and 86 cents per share in the current quarter. Analysts expect 85 cents per share.

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