PetSmart Beats on Both Top and Bottom Lines

Seth Jayson, The Motley Fool
Updated

PetSmart (NAS: PETM) reported earnings on May 22. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended April 29 (Q1), PetSmart beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share expanded significantly.


Margins grew across the board.

Revenue details
 PetSmart tallied revenue of $1.63 billion. The 21 analysts polled by S&P Capital IQ foresaw sales of $1.60 billion on the same basis. GAAP reported sales were 9.4% higher than the prior-year quarter's $1.49 billion.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.85. The 23 earnings estimates compiled by S&P Capital IQ predicted $0.73 per share. GAAP EPS of $0.85 for Q1 were 39% higher than the prior-year quarter's $0.61 per share.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 30.5%, 90 basis points better than the prior-year quarter. Operating margin was 9.5%, 130 basis points better than the prior-year quarter. Net margin was 5.8%, 100 basis points better than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $1.60 billion. On the bottom line, the average EPS estimate is $0.65.

Next year's average estimate for revenue is $6.70 billion. The average EPS estimate is $3.29.

Investor sentiment
 The stock has a four-star rating (out of five) at Motley Fool CAPS, with 683 members out of 730 rating the stock outperform, and 47 members rating it underperform. Among 265 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 256 give PetSmart a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on PetSmart is outperform, with an average price target of $58.19.

While many retailers continue to struggle in these tough economic time, a select few are changing the face of the business, and reaping outsized rewards. Is PetSmart the right stock for you? Read "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail" and decide. Click here for instant access to this free report.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of PetSmart. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement