Boston, MA 05/21/2014 (wallstreetpr) – PetSmart, Inc. (NASDAQ:PETM) started off the day not so smartly as it reports in weaker revenues in the first quarter and disappointingly lowers down its FY 2014 guidance as sales slumped.
Revenue Misses Estimates; Guidance Down
During the first quarter ended on May 4, PetSmart, Inc. (NASDAQ:PETM) posted earnings of $1.04 per share or $103.8 million, higher that $102.4 million or $0.98 per share in the previous year and beating the market consensus estimate of $1.01 per share. However, failed to report revenues in line with the expectations. The company ‘s revenue climbed 1.1% to $1.73 billion, falling short of the expectations of $1.77 billion. Same-store sales dipped 0.6%, recording a slight fall from that of March’s forecast.
Weak sales led the company to revise its earnings for the year downward as it now anticipates earnings to be in between $4.29-$4.39 per share coming down from $4.42-$4.54 per share projected previously. Moreover, the company expects the same store sales growth to remain flat for the year as against its earlier forecast of 2-4% growth. PetSmart also expects its net sales to touch low single digit growth, down from its earlier guidance of 4-6%.
PetSmart, Inc. (NASDAQ:PETM)’s President and CEO, David Lenhardt said that the company failed to accomplish its sales goals, which were affected by the volatile and challenging consumer environment as well as competitive market. The company has so far seen some relief in its services sale, which rose 4.5% to $200 million. Overall, the company has been able to come through economic problems and had shifted its focus on revenue generating services segment, as Americans tend to spend more on grooming.
No More Treats From China
In the meanwhile, the company has decided to pull off the pet treats made in China amid fears that those treats lead to sickness in pets. PetSmart, Inc. (NASDAQ:PETM) intends to take off all China made treats by March 2015. While the U.S. FDA has so far not been able to get a valid proof against this fears, but has registered 4,800 complaints of pet sickness and over 1,000 dog deaths so far. FDA is keeping its investigation on.
