PetSmart still for sale, focused on profit improvement

Amid an ongoing exploration of strategic alternatives, PetSmart said third quarter sales grew 2.6% thanks to the addition of 36 new stores as same store sales were flat.



Total sales at PetSmart increased 2.6% to $1.7 billion with the flat comp increase the result of an increase in average ticket size offset by a decline in transaction volume. Service sales during the quarter increased 6% to $195.3 million. Net income was essentially flat at $92.2 million, but earnings per share increased to 92 cents from 88 cents due to a decline in the number of shares outstanding from the third quarter the prior year.



“As our review of strategic alternatives continues, we remain focused on our four growth strategies and profit improvement program to continue to deliver value for customers and shareholders. I am pleased with our progress to date across our four growth strategies, and in taking decisive actions to deliver expected annualized pre-tax cost savings of $200 million under our profit improvement program,” said PetSmart CEO David Lenhardt.



The company contends it is fundamentally restructuring its cost structure and 60% of the $200 million in cost savings will be realized in 2015 with the remainder realized in 2016. Cost savings are expected to be realized in the areas of cost of goods sold, logistics, store operating and other corporate costs.