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PetSmart expands store growth plans

PetSmart plans to open 70 net new stores this year, including approximately 50 of its standard prototypes, 20 micro stores and three PetsHotels. That’s 10 more than last year, during which the largest specialty pet retailer of services and supplies also closed five stores and opened three new PetsHotels.

The company will spend remaining capital expenditures on store remodel-type projects, supply chain, technology, maintenance and other infrastructure improvements.

News of the planned store expansion comes in conjunction with the company’s fourth quarter results. Earnings of $1.28 per share were up 19.6% compared to $1.07 per share in the fourth quarter of 2012. Net income increased 14% to $132 million in the quarter, compared to $115 million in the fourth quarter of 2012.

Meanwhile net sales for the quarter increased 2.9% to $1.8 billion. Comparable-store sales, including Internet sales, grew 1.2%. Services sales, which are included in net sales, grew 2.6% to $186 million.

According to PetSmart CEO David Lenhardt, November was the company’s strongest month within the quarter with two key milestones.

“Black Friday was the largest sales day in the company's history, and Cyber Monday was our largest e-commerce sales day in the company's history,” Lenhardt said. “December and January were much more challenged from a traffic perspective, consistent with overall retail traffic trends in the centers where we are located.”

Looking ahead to fiscal 2014, the company anticipates comparable-store sales growth of 2% to 4%, and total sales growth of 4% to 6%. For the first quarter of 2014, the company anticipates comparable-store sales growth of low single digits. The company also expects some gross margin deleverage due to the costs associated with the opening of its Northeast distribution center in Bethel, Pa., in the first quarter.