PetSmart Shares Jump as Profit Beats Street

PetSmart, the largest U.S. specialty pet retailer posted a higher profit that beat Wall Street estimates on Wednesday amid a slowing economy that is taking a bite out of consumer spending.

Shares in the company rose more than 9 percent, even after the company lowered its full-year profit and sales outlooks saying it is not immune to the downturn.

Stew Milne / AP

Net profit was $35.8 million, or 28 cents per share, in the fiscal third quarter that ended Nov. 2, topping analysts' average forecast for a profit of 26 cents, according to Reuters Estimates.

In the year-earlier quarter, PetSmart had a profit of $29.5 million, or 23 cents a share, in the year-earlier quarter.

Net sales in the quarter rose to $1.25 billion from $1.12 billion after sales at stores open at least one year grew 5.4 percent.

Phil Francis, PetSmart's chairman and chief executive, said the company's sales of staples and discretionary items has helped it manage through the challenging economy.

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"But we are not immune to the pressures of a slowing economy," said Francis, who noted that the company has further pulled back its capital spending plans for 2009.

PetSmart, which also offers grooming and training services, cut its full-year earnings forecast range to $1.49 to $1.52 per share from its previous call for earnings of $1.51 to $1.59 per share.

It also said it sees 2008 same-store sales growth in the low- to mid-single digit percentage range compared with its prior call for growth in the mid-single-digits.

For the current fourth quarter, PetSmart guided to earnings of 59 cents to 62 cents per share on comparable store sales in the low to mid-single digit percentage range.

PetSmart had previously said it would slow the growth of its stores and PetsHotels amid a tough economy.

Company shares rose to over $14 in extended trade after finishing down 11.5 percent to $13.32 on the Nasdaq.

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