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PetSmart Q3 Earnings Call Transcript
Author: 123jump.com Staff
123jump.com
Last Update: 8:49 PM ET December 06 2008


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PetSmart third quarter revenues increased 12.1% to $1.3 billion, and net profit rose to $35.8 million or 28 cents a share compared to $29.5 million or 23 cents a share. The company guided fourth quarter earnings per share between 59 cents to 62 cents.

 
David Mann – Johnson Rice & Company

And the amount you''re spending versus last year, relatively?

Robert Moran

It is about the same percent of sales.

David Mann – Johnson Rice & Company

Right great, thank you.

Operator

The next question comes from Matt Nemer from Thomas Weisel, your question please?

Matt Nemer – Thomas Weisel Partners

Hi good afternoon everyone. So my first question was just on the comps that you’ve seen over the last few weeks, what would be the sequential impact from inflation? So I guess can you give us a sense of what the core business ex-inflation has done recently?

Lawrence P. Molloy

Hi Matt, this is Chip. So we gave the number in the script there it was 600 and what was the total? 690 basis points, our expectation is that number is probably going to look very similar in Q4 maybe slightly less and all in comps we’ve guided to low to mid single digits. We’ve had a 37 for the first two weeks of the year, I mean first two weeks of the quarter, and we’re expecting something similar throughout the quarter.

Matt Nemer – Thomas Weisel Partners

Okay and then my second question was you spoke to the fact that channel exclusive foods, your share I guess in channel exclusive pet foods seems to be holding up pretty well. What about at the lower end in terms of grocery have you seen any share erosion in those SKUs?

Philip L. Francis

This is Phil and I am, I mean like you and everybody else I’ve probably read and extreme amount of noise about mix shifts and trade down and if we had the tread down story to tell we would tell you. I mean we would point out that we told you what had happened in services and we have no data to support a trade down or a defection, sort of story through yesterday. I tried to figure something that might make the point rather, from low to high end price we talk grocery bridge premium, super premium, and RX which is the basically medicine food that requires a prescription that 700 or so of our stores sell. And that’s the highest price point stuff we sell and this is $3.50 for a one pound can. This is 14 bucks for a five pound bag because its medicine and I looked up on comp, cat and dog sales, Q3 year-on-year, our RX business was up 40%. We’ve heard about humans splitting pills and skipping prescriptions. In the case of pet the highest price point stuff we sell was 40% year-on-year comp. If we have that, I mean I understand if pet food''s $3 million a pound something is probably going to happen and should we have the store to tell we would tell it, but today the defection or the down grade story is not evident in the data that we have.

Matt Nemer – Thomas Weisel Partners

Got it okay great. Thank you very much.

Operator

Our next question is from Peter Benedict from Wachovia, your question please?


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