PetSmart Reports Third Quarter Loss, Blames Warm Weather


PetSmart announced a 6.9 percent loss in net income during the last quarter.

Philip L. Francis, company president and chief executive officer, said unseasonably warm weather and the company’s elimination of a line of horse products has decreased the company’s bottom line for the third quarter.

“As you can imagine, dog ski wear sells better when the weather cools off,” Francis said.

He also added that PetSmart spent $4.7 million selling off their State Line Tack line horse products.

(Mr. Francis, here may be some other possible reasons that PetSmart has experienced a cut in their bottom line: 1) the company decided to restock Smokehouse brand dog treats after they were pulled off shelves despite customer complaints and reports of sick pets; 2) a dog owner reported that a PetSmart PetsHotel employee hit several dogs, and the employee still has his job and is working with dogs; 3) a dog died while being groomed at PetSmart.)

Francis added that even though the housing market is slow, gas prices are increasing, and other economic problems, PetSmart customers are still paying for premium pet food and registering for training classes.

“We are not seeing customers trade down in food or give up their pets,” he said. “We are in a good position heading into the holiday season.”

Source: The Arizona Republic

(Thanks menusux)

31 Responses to “PetSmart Reports Third Quarter Loss, Blames Warm Weather”

  1. LouieW. says:

    Warm weather??????

    Yeah, right.

  2. shibadiva says:

    I thought it was because it was a Tuesday and the moon was full.

  3. Guthrie says:

    And the sale of dog ski wear is critical to their profits? PUH-LEEZE!

  4. Pukanuba says:

    Mr. Francis: I don’t how you got your job but warm weather is a poor excuse for a loss of profit……maybe you should rethink exactly why your profits are down. Trust me. it has nothing to do with the weather.

    Perhaps you should put quality foods & safe products on your shelves. Then maybe pet parents will shop there. I said maybe……

  5. chris says:

    Warm weather my ***.

    reasons that PetSmart has experienced a cut in their bottom line: 1) the company decided to restock Smokehouse brand dog treats after they were pulled off shelves despite customer complaints and reports of sick pets; 2) a dog owner reported that a PetSmart PetsHotel employee hit several dogs, and the employee still has his job and is working with dogs; 3) a dog died while being groomed at PetSmart.)

    This is the real problem

  6. Bridgett says:

    Yes, Mr. Francis, we are not trading down on premium dog food. We are actually, trading up to *real* dog food or home cooking. Stock your shelves with brands we pet owners trust and skip all Chinese products, and we might come back.

    Oh, btw, most dogs don’t ski, ie. don’t need ski wear. Sell that schlop to Paris Hilton.

  7. Lynne says:

    Could the disconnect between corporate America and the public be any clearer?

  8. Carol says:

    Okay–this confirms my suspicions that they really think we are stupid!
    Stupid to believe this hogwash maybe—-never been to that store before and never plan on going now!

  9. Sindy says:

    PetsMart should take a note from what is happening to Menu Foods because they lied too. Be careful, pretty soon you’ll be in court or out of business too. Also kind of insulting to say this to their customers.

  10. Lisa says:

    It’s interesting to note that PetValu - a Canadian pet retail chain, with some US stores - reported a 48% increase in third quarter profits last week. PetValu recently changed their focus from discount retail to a wellness orientation - and you can really see it in their stores, too.

    Glad I bought stock in PetValu, not Pet (not-so) Smart!;tick=PVC

  11. Anonymous says:

    Sounds like the same line we’re hearing from the analysts — coming up with reasons to cover the truth!!

    We’re going to have a VERY SLOW HOLIDAY SALES SEASON of imports this year DUE TO ALL THE RECALLED PRODUCTS, so we’re already saying there are terrorist threats on shopping malls.

    Actually, we probably don’t want to offend the Chinese by saying that people in droves do not want to buy their products this year — so we’ll blame this year’s slow trend on potential terrorist threats! (You know how carefully we have to tread to have the PRIVILEGE ;) to trade with the Chinese so U.S. CEO’s can reap huge profits from using cheap labor and substandard toxic materials in the products!)

    Petsmart: The weather???? HA HA HA HA HA HA HA HA! Do you think we’re stoooooopid? Ask the people who’ve had pets killed by the poisoning why your sales are down. Look at what’s on your shelves!

    Chris: You got it all in there! Good one!

  12. Belgian_owner says:

    Of COURSE! It wasn’t our fault what with stocking crappy food, employing idiots off the street who couldn’t count on their fingers let alone groom a dog properly, re-stocking recalled treats, and having a customer service policy akin to pulling teeth out and replacing them with broken pieces of glass…it was GLOBAL WARMING!

  13. Chaoslillith says:

    Just want to say that I work at Petsmart and at my store all the employees really know their stuff when it comes to grooming, animal health and such. I know quality of people range from store to store but I feel good going to work with really intelligent and caring people.

    The birds at my store get all kinds of fruit, nuts, seeds and such, so do the small mammals and reptiles. They are all loved, have names and are cared for so not all Petsmarts are bad.

  14. HB says:

    The actual article without the bias interjections and edits (can’t we do that in the comments section…and is that really a proper citation if your changing the text?)

    Phoenix-based PetSmart, the nation’s largest pet store chain, on Wednesday reported a 6.9 percent loss in net income during the last quarter.

    Phillip L. Francis, company president and chief executive officer, said unseasonably warm weather and PetSmart’s elimination of a line of horse products cut into the company’s bottom line for the quarter ending Oct. 31.

    “As you can imagine, dog ski wear sells better when the weather cools off,” Francis said.

    He said the company spent $4.7 million selling off State Line Tack line horse products and reconfiguring stores for other products.

    Francis said that despite the sluggish housing market, rising gas prices and other economic problems facing consumers, PetSmart customers have not stopped purchasing premium pet food or paying for in-store classes.

    “We are not seeing customers trade down in food or give up their pets,” he said. “We are a good position heading into the holiday season.”

    PetSmart reported a net income of $29.5 million, or 23 cents per diluted share, compared with $31.7 million during the third quarter of fiscal 2006.

    Revenues last quarter were $1.12 billion, up 8.7 percent from $1.03 billion from last year.

    Same-sales grew 1.4 percent during the last quarter, compared with 6.8 percent in the same period in 2006.

    The company, which owns more than 990 stores in the United States and Canada, added 31 stores and closed four during the last quarter.

    PetSmart stock closed at $24.91 Wednesday, down 1.85 percent.

  15. Ruth says:

    PetSmart must be really feeling the pinch that they didn’t hire a multi-million $ PR firm to spin their sad, sad story on low sales that the CEO had to open his mouth and say something so stupid. (IMO) Wow, blame the weather……was this the best he could say……and consumers are supposed to believe this crap……

    How about selling quality food products, or hiring people that won’t kill or hit animals. That would be a start. People are tired of having to put up with so much crap and the low profits are showing it.

    Wow…..I never knew that PetSmart depended on the sales of dog ski wear to keep the company afloat….what a bunch of BS……

    Yeah, I’m going right out and buy dog ski wear for my dog…..Oh, but wait….my pet is dead from eating suspected unrecalled dog food. No reason to shop there anymore…….Get a clue Mr. Francis.

  16. Lisa says:

    HB - thanks for the update. The full release tells (IMHO) a different story.

    My math may be pretty simplistic - but it looks like the sale of the line of tack explains much of the loss in income. If I were Francis, I wouldn’t have mentioned the weather at all.

    That said, when comparing same store sales in the US, PetsMart was down while Pet Valu was up. So the repeated negative media coverage may have had some impact.

    The unfortunate reality is that people have very short memories. Yes, those who lost a loved one or saw the direct impact of the recall may remember and it may affect future purchases; but the bulk of the population will not change their purchasing habits. Particularly since the blame was laid at the manufacturers’ doors.

    While Menu Foods’ stock is suffering, the public does not purchase product from them directly. They are losing because manufacturers have jumped ship. It will be interesting to see what happens to the stock of manufacturers directly involved in the recall - though it will likely be moderated by the many other product lines these giants carry.

  17. Lynn says:

    RE: Carol’s comment on November 16th, 2007 at 12:44 pm

    “Okay–this confirms my suspicions that they really think we are stupid!”

    Amazing, isn’t it?

    Most of us are boycotting the store, so it will be REALLY interesting to see what crazy reasons they come up with for the next quarter’s drop in sales.

  18. Tanya says:

    Actually, weather is a HUGE factor in people’s shopping decisions, because people are going OUT and not hitting malls, stores, etc. when they do go to shop, they typically do the “run in, get the needed thing, run out” rather than what we do on colder, blistery days where we meander, picking things up, try things on, etc.

    Here’s some links about weather related issues, if you care. otherwise, you know, you’ve decided Pet Smart isn’t smart, cause you don’t like thier explinations. I suspect, given thier experts are paid to know and understand trends in the market, they aren’t *that* much off.

    The first directly states what Petsmart states

  19. Lisa says:


    Very good point about the weather and shopping decisions. I don’t know what it’s like where you are, but here in the Great White North, Xmas shopping doesn’t really take off until we get our first snow (which we had this morning!). When it’s 31 degrees (Celsius) on thanksgiving, one is sitting in the garden with a beer, not shopping!

    However, I would question Francis’ decision to point out ski wear as an example of the effect of weather on purchasing patterns.

  20. Minty234 says:

    It might also be because some of us are boycotting them due to their “New” line of Dwarf bunnies that they are testing.
    When asked where they get them from, there was waffling the likes you have never heard.
    Wanna bet HUNTE Corp knows?

  21. chris says:

    I was in Petsmart last April or May and one of the employees was pumping Brand X (BUY ONE-GET ONE FREE). He began telling me how GREAT this food was. I told him I wouldnt buy anything made by Menu Foods.

    He said THIS ISNT MADE BY MENU FOODS. Yes it is! No it’s not! So I pulled out my handy dandy PETFOODLIST and bingo there it was. His comment was well this one is ok.

    Needless to say, I dont shop at Petsmart anymore.

  22. Dennis says:

    I find it remarkable that some apparently cannot fathom that there are many consumers out here that have learned that tainted foods, treats, and toys can and have harmed our pets. And many of those consumers will not now, nor probably ever buy the same brands again, and maybe not even buy from the same retailers again. And until China cleans up all the mess, we’re avoiding their products and ingredients. It is a pretty safe bet if I’m not buying Chinese pet toys, then I probably am not buying toys at major retailers who stock almost nothing but those.

    I bet the major pet food sales are down at major retailers. Many of us are buying truly premium brands made with human grade ingredients from small shops instead of major brands from major retailers. And those who aren’t buying those smaller better products are busy home cooking for their pets because they no longer trust others to make their pet foods and treats.

    Things aren’t back to normal for many of us. There are still taints floating around and we have companies and the FDA busy in denials while the injured pet count increases, again.

    For me, the MENU concern goes beyond just what is known. I won’t buy from a manufacturer that uses MENU after having seen the recall. It doesn’t matter to me that MENU doesn’t make dry food. I figure if the maker is careless enough to continue using them, then they might also be careless with their dry production and I don’t care to help them find out.

  23. Sharon says:

    There is a brand new Petsmart in my neighborhood. I’ve never been there. I will never go there. My only alternative is a Petco or to drive north to the rich part of town with the yuppie pet food stores. I did that for awhile but what they are offering is not that much better. I don’t trust any of it anymore.

  24. anonymous says:

    It does not matter how cold it gets, the cold shoulder that Petsmart as well as others are getting has more to do with how hot people are about being sold shoddy goods.
    People have very long memories for being lied to and insulted and having been sold poison. Kind of thing that sticks in a persons mind.

  25. Nora and Rufus says:

    So this is my chance to mention the way I was treated this past April, when my dog and I went into the store so I could buy two pair of different style “Ariat” Equestrian boots when they greatly discounted all the State Line Tack inventory before eliminating that department. I strolled in as usual, Rufus and I, made a beeline to the Boot Department and chose 4 boxes of boots to try on. I sat down and was putting the boots on and was SWARMED by a young female employee, who looked VERY disturbed (after I heard on the intercom the call code “something or other” of possible shop lifting!) She hurriedly asked me if she could put some of the boots away. I interjected that I was mearly TRYING THEM ON to purchase. ( and thought well excuse the hell out of me) And this is after I had been in the store once or twice a week and spent several hundred dollars in the store on a monthly basis since their grand opening in early 2006. HOW FREAKIN RUDE!!!!!!! Needless to say, after purchasing the two pair of boots I wanted, I beat it out of there and DO SHOP THERE ANYMORE.

  26. Nora and Rufus says:

    Previous comment, Whoops, I meant DO NOT SHOP THERE ANYMORE.

  27. Katie says:

    Well PetSmart just doesn’t want the shareholders or the public to know the truth. Back in March the public learned it didn’t matter if they bought the food at a PetSmart, grocery store or WalMart; it was all the same food. Didn’t matter what name was on the food or what color the bag was - it was all the same! $24/bag or $14/bag the ingredients were the same. But I guess blaming it on warm weather takes the heat off the CEO.


  28. dogluv says:

    As a former employee of a Petsmart, I can say that Petsmart deserves this loss. The quality employees, who had actual knowledge and true compassion, have routinely been quiting/or terminated due to managements ignorance and terrible tactics to get them “in-line” with a philosphy that only seems to spell bottom line. The training was quick and pufunctionary with no real depth to actually answer questions properly. I believe that this may not apply to all Petsmarts, the store can be only good as a store director. The store director at our store seemed to not know (or care) to learn anything or teach anything other than sales tactics. Anything to make the bottom line look good. I understand a company need to survive, but at what cost? Too many times it seems to be at the cost of the customers, employees that take the time to get the job done correctly(not good for $, turnover of customers in timely fashion makes more money), and dogs in the grooming that are done too quickly for a proper job and recieving service add-ons that are not always needed. I hope this is a wake up call that the chain would decide to live up to their own name.

  29. Bill says:

    petsmart no longer cares about customers, the pets they care for, or its workers. there goods and or pets are marked up from 100 to at times over 500%. it is painfully clear that only care for one thing now and that is the dollar bill. It hard to get help in the stores or the few people they have anymore just cant keep up. I was in a store yesterday trying to get help with a fish tank and sick fish. the one young man working in the fish dept was bagging fish with people waiting. I asked is there some one who can help me with a problem. HE was nice but could just could not keep up. They just do not have near enough help like the use to. Iam sorry to say they have went from a top pet store to one of the worst pet stores i have been in. for what not the customer or the pets but for they call GOD now the dollar bill. I never liked PETA and what they do but now i find myself asking they may have a point about petsmart.

  30. anonymous says:

    I am a former manager at a petsmart let me tell you that this company has totally went away from everything that they used to stand for. Pets in the store used to be top priority, making sure even the most inexpensive of fish or animal received proper vet care when sick. Now it’s like “just put it in the sick room (as they call it)and make sure it has water. which really means throw it in the death room and let it die. And the grooming… what a joke, I honestly coudn’t begin to tell you how many times I had to try an explain to someone why there pet was taken to the banfield clinic for stitches and having to lie to them that it was a freak accident that rarely happens. I was always amazed at how the company sells different kinds of cuts for the various breeds and not one groomer had the foggiest idea on how to perform these cuts. The only thing they could do was basically shave the animals. Oh yea can’t forget how hr would have us handle pet parents after we maimed there pets, give them a 25 dollar gift card and their choice of free bag of pet food. Notice I didn’t leave my name, I am truly ashamed to have ever worked for this company.

    PS. Oh and as far as sick fish in the store, We were instructed to place it in a cup of water with one tablespoon of baking soda added. petsmart says this is the most ethical way to euthanize a fish, but let me assure you from my experience it is not.

  31. me too says:

    I use to work at petsmart I quit because of the way we were treated as employee’s lie and change things acording to what was needed to keep a customer and make sales. the say there is an open door policy well there isn’t. they could care less about the employee or how managers treat rolling in any way you can. all they care about is keep the money

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