PetSmart posts growth in 3rd-quarter profit

PetSmart Inc. said Wednesday its third-quarter profit rose 22 percent on higher same-store sales and sales of pet services.

However, the pet supplies retailer said it was preparing for an economic slowdown and would reduce capital spending.

The company earned $35.8 million, or 28 cents per share, compared with $29.5 million, or 23 cents per share, in the same quarter a year ago.

Analysts surveyed by Thomson Reuters expected income of 26 cents per share for the quarter ended Nov. 2.

Sales rose to $1.25 billion from $1.12 billion. Analysts expected $1.24 billion in revenue.

Same-store sales - or sales at stores open at least a year, an important performance indicator - grew 5.4 percent in the quarter, helped by pet services, which gained 15.2 percent to $127.8 million.

Chairman and Chief Executive Phil Francis said a blend of staples and discretionary items helped the store in the third quarter, "but we are not immune to the pressures of a slowing economy."

Francis said the company would pull back further on capital spending next year and focus on execution in its current business.

PetSmart (nasdaq: PETM - news - people ) operates about 1,100 stores in the United States and Canada.

Shares of the company fell $1.74, or 11.6 percent, to close at $13.32. In extended trading, they rebounded $1.33, or 10 percent, to $14.65. The stock has traded in a 52-week range of $14.57 to $28.86.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed