Q3 2012 Earnings Call Transcript

Transcript Call Date 11/14/2012

Operator: Good afternoon, ladies and gentlemen and welcome to PetSmart's Third Quarter 2012 Analyst Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will be given at that time. As a reminder, this conference is being recorded.

I would now like to introduce your host for today's conference Ms. April Lenhard, Head of Investor Relations. Ma'am?

April Lenhard - IR: Good afternoon and welcome to PetSmart's conference call to announce our results for the third quarter of fiscal 2012. With me on the call today are Chairman and Chief Executive Officer, Bob Moran; President and Chief Operating Officer, David Lenhardt; as well as Chip Molloy, Executive Vice President and Chief Financial Officer.

Bob will kick off the call with an overview of our results and then Chip will take you through the financial review as well as our earnings guidance. David will review the operations of the business and finally we'll take your questions. Please keep in mind everything we cover during today's call, including the question-and-answer session is subject to the Safe Harbor statement for forward-looking information you'll find in today's news release.

Thanks and I'll now turn the call over to Bob.

Robert F. Moran - Chairman and CEO: Thanks, April, and good afternoon everyone. We are pleased to report another quarter of solid earnings growth. For the third quarter, earnings per share were $0.75, up 50% when compared to $0.50 for the same period last year. Comparable store sales or sales in stores opened at least a year, grew 6.5% and comp transactions which we use as a proxy for traffic, were up 2.3%.

Our performance in the third quarter was due to the strength across all three merchandising categories; consumables, hardgoods and live goods as well as across services. We are executing well and continue to define the pet specialty customer experience because we are much more than a store that just sells product.

As North America's leading pet specialty retailer, we provide a full range of services including professional grooming, training, boarding, day camp and full-service veterinary care all under one roof, and we are privileged to have the most passionate associates in the industry who engage with our pet parents to offer solutions.

We've also build a culture of innovation and differentiation that sets us apart from the competition. Through our PetSmart Charities the largest funder of animal welfare efforts in all of North America we are proud that nearly 1,100 homeless pets are saved each day in our stores. All these things define the PetSmart brand. It is strong and it resonates with our customers.

As a side note, we recently signed a product license agreement with Emart, a leading retailer in South Korea to sell a limited number proprietary branded hardgoods products in select pet stores in South Korea. We view this partnership as a low risk learning exercise to gain a better understanding of how our brand is received in emerging Asian markets without investing significant resources.

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