PetSmart (PETM), the largest specialty pet retailer, has recorded a 5.09 percent increase in profit for the quarter ended Aug. 03, 2014. The company earned $98.12 million or $0.98 a share in the second-quarter compared with $93.37 million or $0.89 a share a year ago. Analysts on average had predicted net income of $0.94 a share.
Revenue during the second-quarter went up marginally 1.40 percent to $1729.94 million from $1706 million in the last year period.
Gross margin contracted by 42 basis points over the previous year period to 29.78 percent. Total expenses as a percentage of revenues decreased to 90.58 percent from 90.82 percent in the same period last year. That has resulted in improvement of 24 basis points in operating margins to 9.42 percent.
The company disclosed operating income of $162.95 million, compared with $156.55 million in the last year period.
Said David Lenhardt, president and chief executive officer said, "While we face many of the same headwinds affecting other retailers, we continue to deliver extraordinary value to our customers and achieve strong earnings and cash flows. We are focused on leveraging our competitive strengths, including superior customer focus and loyalty, and capitalizing on the continued growth of the specialty channel. We have already begun implementing a broad range of performance improvement initiatives following the Board's detailed review of our business over the last several months."
For third quarter, the company expects earnings per share at $0.93 to $0.97. For full year, it anticipates earnings per share at $4.29 to $4.39. It expects operating cash flow to come in range of $600 to $625 million for fiscal year 2014.
Cash Position
As on Aug. 03, 2014, the company's cash balance stood at $251.76 million, down 10.58 percent or $29.80 million from Aug. 04, 2013.
Working Capital
Petsmart has witnessed a decline in the working capital over the last one year. The company's working capital stood at $586.93 million as at Aug. 03, 2014, down $16.11 million or 2.67 percent from $603.04 million on Aug. 04, 2013. It registered a decrease in current ratio to 1.74 as at Aug. 03, 2014 from 1.78 on Aug. 04, 2013.
Debt Position
Petsmart has witnessed an increase in the total debt over the last one year. As on Aug. 03, 2014, total debt stood at $519.94 million, up 0.16 percent or $0.82 million, from Aug. 04, 2013.
The company's total debt was 20.26 percent of total assets as on Aug. 03, 2014, compared with 20.36 percent on Aug. 04, 2013.
Shares of the company gained $1.80 or 2.58 percent to trade at $71.50 on Wednesday (9.19 am).
