Warm Weather, Sale of Horse-Products Line Hurt PetSmart

Phoenix-based PetSmart, the nation's largest pet-store chain, on Wednesday reported a 6.9 percent loss in net income during the past quarter.

Phillip L. Francis, company president and chief executive officer, said unseasonably warm weather and PetSmart's elimination of a line of horse products cut into the bottom line for the quarter that ended Oct. 31.

"As you can imagine, dog ski wear sells better when the weather cools off," Francis said.

He said the company spent $4.7 million selling off the State Line Tack line of horse products and reconfiguring stores for other products.

Francis said that despite the sluggish housing market, rising gas prices and other economic problems facing consumers, PetSmart customers have not stopped purchasing premium pet food or paying for in-store classes.

"We are not seeing customers trade down in food or give up their pets," he said. "We are in a good position heading into the holiday season."

PetSmart reported a net income of $29.5 million, or 23 cents per diluted share, compared with $31.7 million during the third quarter of fiscal 2006.

Revenues last quarter were $1.12 billion, up 8.7 percent from $1.03 billion from last year.

Same-store sales grew 1.4 percent during the past quarter, compared with 6.8 percent in the same period in 2006.


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