Although other specialty retailers have struggled in the tough economy, PetSmart's financial results have proved that Americans are not scaling back on spending money on their pets, according to financial analysts at seekingalpha.com.
Part of PetSmart's success is due to the fact that the company has little "direct" competition. Petco is one of the few "direct competitors," and the "indirect" competitors are predominantly the big box retailers such as Wal-Mart, Costco and Target, as well as grocery store chains. PetSmart has remained competitive in the petfood market as the company expanded its private-label petfood products and is set to open 40 to 50 additional stores in 2011, according to the financial analysts.
PetSmart's earnings grew 24%, 32%, 23% and 26% in the past four quarters of fiscal 2010, respectively, up from levels during the same period one year ago. The company's full-year sales rose 6.7% to US$5 billion, while operating income increased 16.2% to US$428.7 million and net income rose 20.9% to US$239.9 million, the company reported.
These successful earnings results span a decade, as PetSmart's sales have increased nearly 10% and profits have increased 12% annually over this period, financial analysts say, with this growth expected to continue during the 2011 fiscal year.