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| 8-K - FORM 8-K - PETSMART INC | d307710d8k.htm |
Exhibit 99.1
CONTACT:
PetSmart Investor Relations
(623) 587-2025
PetSmart Reports Results for the Fourth Quarter and Fiscal Year 2011
Q4 Earnings up 18% to $0.91 per Share; Comp Sales of 5.5%; Total Sales up 8%; Comp
Transactions up 2.9%; FY11 Earnings up 27% to $2.55 per Share; Comp Sales of 5.4%; Total Sales
up 7%; Comp Transactions up 2.5%
PHOENIX, AZ–(February 29, 2012) - PetSmart, Inc. (NASDAQ: PETM) today reported financial results for the fourth quarter and fiscal year 2011, and provided guidance for 2012.
For the quarter, earnings per share were up 18% to $0.91. Comparable store sales, or sales in stores open at least a year, grew 5.5%, benefitting from comparable transactions growth of 2.9%. Total sales for the quarter were up 8% to $1.6 billion, partially impacted by $1 million in unfavorable foreign currency fluctuations. Services sales, which are included in total sales, grew 11% to $168 million.
For the year, the company delivered earnings per share of $2.55, up 27% compared to $2.01 last year. Comparable store sales grew 5.4%, benefitting from comparable transactions growth of 2.5%. Total sales for the year were $6.1 billion, up 7%, including a favorable impact from foreign currency fluctuations of $11 million, and services sales grew 9% to $675 million.
During the year, the company generated $575 million in operating cash flow and spent $121 million in capital expenditures. In addition, the company repurchased $337 million of PetSmart stock during 2011, with $101 million repurchased during the fourth quarter. The company also distributed $60 million in dividends during 2011, ending the year with $413 million in cash, cash equivalents and restricted cash and zero borrowings on its credit facility.
“We are pleased to report another quarter of solid earnings growth,” said Bob Moran, Chairman and Chief Executive Officer. “2011 was a great year overall, with even more stories of innovation and differentiation in our stores.”
“Based on our fiscal year calendar, 2012 will contain a 53rd week. For all of 2012, we anticipate comparable store sales growth in the 3% to 4% range, and total sales growth in the 7.5% to 8.5% range. We expect earnings per share between $3.02 to $3.16, and spending for capital expenditures projects to be between $130 million to $140 million. The impact of the extra week is estimated to be $120 million in sales and $0.16 in EPS,” said Chip Molloy, Executive Vice President and Chief Financial Officer. “For the first quarter of 2012, we are expecting comparable store sales growth in the low- to mid-single digits range, and earnings per share between $0.70 to $0.74.”
Conference call information
PetSmart management has scheduled a teleconference for 4:30 p.m. EST on February 29, 2012 to discuss results for the fourth quarter and fiscal year 2011. This teleconference will be webcast live for all investors at www.petm.com or www.streetevents.com. The webcast will be available until the company announces results for the first quarter of 2012. In addition, you can listen to the call live by dialing 866-244-4518 (within the United States and Canada) or 703-639-1170 (for international callers), code 1564015.
A phone replay will be available through March 29, 2012, 11:59 p.m. EDT, at 888-266-2081 in the United States and Canada, or at 703-925-2533 for international callers, code 1564015.
About PetSmart
PetSmart, Inc. (NASDAQ: PETM) is the largest specialty pet retailer of services and solutions for the lifetime needs of pets. The company employs approximately 50,000 associates and operates more than 1,232 pet stores in the United States, Canada and Puerto Rico, over 192 in-store PetSmart® PetsHotel® dog and cat boarding facilities and is a leading online provider of pet supplies and pet care information (http://www.petsmart.com). PetSmart provides a broad range of competitively priced pet food and pet products; and offers dog training, pet grooming, pet boarding, PetSmart Doggie Day Camp SM day care services and pet adoption services. Since 1994, PetSmart Charities, Inc., an independent 501(c)(3) non-profit animal welfare organization and the largest funder of animal welfare efforts in North America, has provided more than $165 million in grants and programs benefiting animal welfare organizations. Through its in-store pet adoption partnership with PetSmart Charities®, PetSmart has helped save the lives of nearly 5 million pets.
Forward-looking statements
This news release contains forward-looking statements concerning our expectations for future performance, including the statements comprising our 2012 guidance. These “forward-looking statements” are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in general economic conditions; conditions affecting customer transactions and average ticket including, but not limited to, weather conditions or other seasonal events; our ability to compete effectively; disruption of our supply chain; our ability to effectively manage our growth and operations; changes in our cost structure; and changes in the legal or regulatory environment. Undue reliance should not be placed on such forward-looking statements as they speak only as of the date hereof, and we undertake no obligation to update these statements to reflect subsequent events or circumstances except as may be required by law. For additional information on these and other factors that arise when investing in PetSmart, please see our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K.
Follow PetSmart on Twitter www.twitter.com/PetSmartTLC
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PetSmart, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share and store data)
(Unaudited)
| Thirteen Weeks Ended | Thirteen Weeks Ended | Fifty-Two Weeks Ended | Fifty-Two Weeks Ended | |||||||||||||||||||||||||||||
| January 29, 2012 | % of Sales | January 30, 2011 | % of Sales | January 29, 2012 | % of Sales | January 30, 2011 | % of Sales | |||||||||||||||||||||||||
| Merchandise sales |
$ | 1,460,090 | 89.1 | % | $ | 1,359,619 | 89.4 | % | $ | 5,401,731 | 88.4 | % | $ | 5,040,807 | 88.5 | % | ||||||||||||||||
| Services sales |
168,479 | 10.3 | % | 151,881 | 10.0 | % | 674,859 | 11.0 | % | 618,755 | 10.9 | % | ||||||||||||||||||||
| Other revenue |
9,259 | 0.6 | % | 8,534 | 0.6 | % | 36,714 | 0.6 | % | 34,235 | 0.6 | % | ||||||||||||||||||||
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| Net sales |
1,637,828 | 100.0 | % | 1,520,034 | 100.0 | % | 6,113,304 | 100.0 | % | 5,693,797 | 100.0 | % | ||||||||||||||||||||
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| Cost of merchandise sales |
1,006,779 | 61.5 | % | 934,763 | 61.5 | % | 3,783,951 | 61.9 | % | 3,554,387 | 62.4 | % | ||||||||||||||||||||
| Cost of services sales |
123,926 | 7.5 | % | 111,778 | 7.4 | % | 488,216 | 8.0 | % | 450,644 | 7.9 | % | ||||||||||||||||||||
| Cost of other revenue |
9,259 | 0.6 | % | 8,534 | 0.6 | % | 36,714 | 0.6 | % | 34,235 | 0.6 | % | ||||||||||||||||||||
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| Total cost of sales |
1,139,964 | 69.6 | % | 1,055,075 | 69.4 | % | 4,308,881 | 70.5 | % | 4,039,266 | 70.9 | % | ||||||||||||||||||||
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| Gross profit |
497,864 | 30.4 | % | 464,959 | 30.6 | % | 1,804,423 | 29.5 | % | 1,654,531 | 29.1 | % | ||||||||||||||||||||
| Operating, general and administrative expenses |
327,900 | 20.0 | % | 315,139 | 20.7 | % | 1,301,304 | 21.3 | % | 1,225,803 | 21.5 | % | ||||||||||||||||||||
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| Operating income |
169,964 | 10.4 | % | 149,820 | 9.9 | % | 503,119 | 8.2 | % | 428,728 | 7.5 | % | ||||||||||||||||||||
| Interest expense, net |
(14,102 | ) | -0.9 | % | (14,615 | ) | -1.0 | % | (56,842 | ) | -0.9 | % | (58,837 | ) | -1.0 | % | ||||||||||||||||
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| Income before income tax expense and equity in income from Banfield |
155,862 | 9.5 | % | 135,205 | 8.9 | % | 446,277 | 7.3 | % | 369,891 | 6.5 | % | ||||||||||||||||||||
| Income tax expense |
(56,604 | ) | -3.5 | % | (49,096 | ) | -3.2 | % | (166,960 | ) | -2.7 | % | (140,396 | ) | -2.5 | % | ||||||||||||||||
| Equity in income from Banfield |
2,742 | 0.2 | % | 4,167 | 0.3 | % | 10,926 | 0.2 | % | 10,372 | 0.2 | % | ||||||||||||||||||||
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| Net income |
$ | 102,000 | 6.2 | % | $ | 90,276 | 5.9 | % | $ | 290,243 | 4.7 | % | $ | 239,867 | 4.2 | % | ||||||||||||||||
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| Earnings per common share: |
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| Basic |
$ | 0.92 | $ | 0.78 | $ | 2.59 | $ | 2.05 | ||||||||||||||||||||||||
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| Diluted |
$ | 0.91 | $ | 0.77 | $ | 2.55 | $ | 2.01 | ||||||||||||||||||||||||
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| Weighted average shares outstanding: |
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| Basic |
110,364 | 115,222 | 111,909 | 116,799 | ||||||||||||||||||||||||||||
| Diluted |
112,100 | 117,712 | 113,993 | 119,405 | ||||||||||||||||||||||||||||
| Stores open at beginning of each period |
1,210 | 1,172 | 1,187 | 1,149 | ||||||||||||||||||||||||||||
| Stores opened during each period |
25 | 17 | 53 | 46 | ||||||||||||||||||||||||||||
| Stores closed during each period |
(3 | ) | (2 | ) | (8 | ) | (8 | ) | ||||||||||||||||||||||||
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| Stores open at end of each period |
1,232 | 1,187 | 1,232 | 1,187 | ||||||||||||||||||||||||||||
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PetSmart, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except par value)
(Unaudited)
| January 29, 2012 |
January 30, 2011 |
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| Assets |
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| Cash and cash equivalents |
$ | 342,892 | $ | 291,949 | ||||
| Short-term investments |
20,311 | 9,708 | ||||||
| Restricted cash |
70,189 | 61,439 | ||||||
| Receivables, net |
53,899 | 53,971 | ||||||
| Merchandise inventories |
644,864 | 615,841 | ||||||
| Deferred income taxes |
51,381 | 44,999 | ||||||
| Prepaid expenses and other current assets |
80,352 | 46,022 | ||||||
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| Total current assets |
1,263,888 | 1,123,929 | ||||||
| Property and equipment, net |
1,067,028 | 1,132,435 | ||||||
| Equity investment in Banfield |
37,824 | 42,858 | ||||||
| Deferred income taxes |
93,485 | 96,215 | ||||||
| Goodwill |
44,084 | 44,111 | ||||||
| Other noncurrent assets |
37,775 | 30,672 | ||||||
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| Total assets |
$ | 2,544,084 | $ | 2,470,220 | ||||
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| Liabilities and Stockholders’ Equity |
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| Accounts payable and bank overdraft |
$ | 199,177 | $ | 168,776 | ||||
| Accrued payroll, bonus and employee benefits |
158,079 | 139,359 | ||||||
| Accrued occupancy expenses and deferred rents |
68,584 | 64,328 | ||||||
| Current maturities of capital lease obligations |
54,219 | 45,277 | ||||||
| Other current liabilities |
201,247 | 156,065 | ||||||
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| Total current liabilities |
681,306 | 573,805 | ||||||
| Long-term debt |
— | — | ||||||
| Capital lease obligations |
505,273 | 521,552 | ||||||
| Deferred rents |
81,403 | 86,027 | ||||||
| Other noncurrent liabilities |
122,273 | 118,194 | ||||||
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| Total liabilities |
1,390,255 | 1,299,578 | ||||||
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| Stockholders’ Equity: |
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| Preferred stock; $.0001 par value |
— | — | ||||||
| Common stock; $.0001 par value |
16 | 16 | ||||||
| Additional paid-in capital |
1,312,996 | 1,222,340 | ||||||
| Retained earnings |
1,507,054 | 1,277,803 | ||||||
| Accumulated other comprehensive income |
5,490 | 5,380 | ||||||
| Less: Treasury stock |
(1,671,727 | ) | (1,334,897 | ) | ||||
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| Total stockholders’ equity |
1,153,829 | 1,170,642 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 2,544,084 | $ | 2,470,220 | ||||
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