On the Line: Petsmart CEO Philip Francis
When Cramer recommended Petsmart over Petco, he did it because he thought it could show steady growth regardless of the state of the economy. But then on Wednesday, Petsmart , the largest specialty pet retailer in the U.S., cut guidance. It cited the weak consumer and – always a red flag – the weather as reasons. Cramer was curious about the old weather excuse, so he brought on Petsmart CEO Philip Francis to explain.
Francis said that weather was a factor when the company cut guidance cut because it has been unseasonably warm across much of the country. People don’t think a pet company would be affected by the seasons, but the delay in cold weather translates into a slowdown in cold-weather inventory sales. Think doghouses, heated food bowls, even food itself. Animals, like humans, eat more in the winter. Warmer weather? Less food being sold, Francis said, and that hurts the bottom line.
Cramer agreed. Winter will eventually come and the stock is only down slightly. He’s staying on board.
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