Boston, MA 08/21/2014 (wallstreetpr) – PetSmart, Inc. (NASDAQ:PETM) is under pressure to offer itself for sale. They say that selling the company is in the best interest of the shareholders. In fact, institutional investors with a significant stake in the company have been on the forefront in calling for the sale of the business. However, in a recent call with financial advisers, the management of PetSmart talked less about selling the business but more about revamping it. As a matter of fact, they have plans to do that.
Investor on sale call
PetSmart, which is one of the largest companies in Arizona, is facing pressure from hedge fund Jana Partners and Longview Assets Management to put itself up for sale. Jana Partners owns about 10% equity stake in PetSmart, Inc. (NASDAQ:PETM) while Longview owns about $9% stake in the business. Nonetheless, the company recently talked about weighing various alternatives. The board of directors of the company also recently finished a months-long review of the business, with hopes of finding the best direction to go.
A glimpse of a turnaround strategy
Speaking at a conference call with analysts, PetSmart, Inc. (NASDAQ:PETM)’s CEO, David Lenhardt, said that they were facing challenges in the business partly because consumer spending has declined, and the industry has also become more competitive. He said that changing some of their offerings was one of the issues they were considering to make the business more relevant to the customers and shareholders. They are also considering cutting costs to strengthen their balance sheet.
It appears as though the management of PetSmart is keen on revamping the company rather than giving it away. They recently made an acquisition move that further gives credence to that view. They announced $130 million offer to acquire Pet360, which is an online retailer that operates a number of Web portals.
PetSmart, Inc. (NASDAQ:PETM) reported 2Q earnings of $0.98 a share on revenue of $1.7 billion. Revenue was up 1.4% on a year-over-year basis. It earned $0.89 in the like quarter last year.
