Petsmart Reports Double-Digit Earnings
By Megan Zielinski, contributing writer
In-store services contribute to earnings, inventory available to online customers
Largest pet retail and service company Petsmart reports a strong 2013 fiscal year. Although Q1 and FY 2012 include one week more than 2013, results are being compared based on a 13-week quarter and a 52-week year.
Net sales for the fourth quarter of 2013 increased by 2.9 percent compared to Q4 2012 at $1.8 million. Store sales of stores open for more than a year, including Internet sales, increased 1.2 percent from Q4 the previous year. The company’s service sales climbed 2.6 percent to a total of $186 million, which is included in net sales of Q4 2013.
Earnings per share increased 19.6 percent to $1.28 compared to $1.02 of Q4 2012. Net income of Q4 2013 grew by 14 percent to $132 million compared to $115 million of Q4 2012.
FY 2013 marks the fourth consecutive year of double-digit earnings for Petsmart. Earnings per share increased 18.9 percent at $4.02 vs. $3.38 from FY 2012. Petsmart produced $615 million in cash flows from operating activities, spent $147 million on store maintenance and utilities, distributed $54 million in dividends, bought $464 million of Petsmart stock, and ended Q4 2013 with a total of $357 million in cash, cash equivalents, restricted cash, and zero borrowings.
Petsmart suffered a 10 percent drop in shares since the beginning of 2014, however, due to weak holiday sales.
Petsmart offers in-store services, including: grooming, training, adoptions, and pet boarding through Banfield Pet hospital — which have been increasing earnings significantly each year. By providing pet services and selling high-quality pet supplies, the company is bringing in repeat business and increasing cross-selling opportunities. Such services benefit the company when compared to online and traditional retailers.
Petsmart offers more than 10,000 products through its web page in addition to the 11,000 products sold in 1,314 Petsmart stores. The company offers savings, special promotions, and free shipping to customers who shop through the website. In addition, Petsmart improved the site to simplify the in-store shopping experience by offering online inventory of items available at local stores.