Goldman Sachs Comments On PetSmart's Intact Outlook

In a report published by Goldman Sachs, PetSmart’s PETM outlook is intact as demand / execution offset higher spending.

Goldman Sachs reported that it can't remember a time when an EBIT miss was as benign to the outlook as PETM's modest 4Q shortfall looked to it. “Promo expenses for new product launches and higher incentive comp held back EPS, but gross profit dollars beat, traffic trends are solid, inventory came in, and the buyback was double our forecast. PETM reported 4Q2010 EPS of $0.77 vs. $0.61 a year ago, ahead of our $0.75 and consensus of $0.74. A lower-than expected tax rate added roughly $0.04 to results; EBIT tracked a bit below our forecast and consensus, on strong SSS growth (6.3% vs. our 6.0%).”

PetSmart closed yesterday at $41.44.