PetSmart Inc. Financial Research
Introduction
PetSmart, Inc. is a company that provides both products and services for pets. The first spark of interest for investing in this company’s stock begins with the gradual and steady profit over the the past few years. Consider the following data, at the end of the fiscal year of 2014 the recorded revenues were $6,916.6 million, which was an increase of 2.3% over the fiscal year 2013 (PetSmart, Inc. SWOT Analysis, 2015, pp. 3). In addition to revenues of the fiscal year of 2014, the operating profit of PetSmart was around $693.3 million, and compared to fiscal year 2013, this was an increase of 6.5%; the net profit for 2014 was at $419.5 million, which was an increase of 7.7% over 2013 (PetSmart,
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as a good opportunity is considering its partnerships. Partnerships means networking and connections for growth. For example, they have 844 veterinary hospitals due to its partnership with Medical Management International and others that are in Canada (PetSmart, Inc. SWOT Analysis, 2015, pp. 19). Since PetSmart Inc. is a one stop shop that essentially has everything a pet owner needs in one spot it makes them more attractive than larger retailers. In addition, any services they provide they try to focus and provide the best and lead in all pet specialties. For example, their professional grooming services, is one of the services that gives the groomers an additional amount of grooming skills and are taught to use safe and gentle …show more content…
At that time before tax increased to 9.3% sales, the earnings per share were at $4.02 (PetSmart, Inc. SWOT Analysis, 2015, pp. 25). Let’s consider numbers that lead to the physical growth of the actual company. For example, they generated $615 million in operation cash flow, and used $147 million to spend on capital expenditures. This led to adding 55 net new stores and 3 new PetsHotels (pp. 25). What this means is that PetSmart Inc. has a strong amount of cash generation. They were able to return $54 million in quarterly dividends to the shareholders and they repurchased $464 million in common stock. The Board of Directors approved $535 million share repurchase program and it increased PetSmart’s Inc. quarterly dividend by 18% to 19.5 cents per quarter (pp. 25). This is good news to shareholders and to a financial manager’s client. It reinforces that any return excess free cash flow will go the
Strengths. PetSmart offers a one stop shop experience to the consumer by providing value added services and products. PetSmart’s
WinCo Foods is a supermarket chain with headquarters in Boise, Idaho. It started in 1967 and has since expanded to include over 100 locations throughout the United States. Until 1999, all of its stores operated as Cub Foods or Waremart Food Centers, but the company now has its own branded locations. It also has five distribution centers. The stores and distribution locations employ more than 15,000 staff members in a variety of positions.
American Eagle Outfitters (AEO) differentiates from its competitors because it’s a leading global specialty retailer offering latest trends that are high-quality and affordable. The source of competitive advantage is the quality of their clothes and their environmentally friendly fabrics. American Eagle Outfitters is a high-quality and inexpensive brand of their two competitors Aéropostal and Abercrombie and Fitch. AEO centers in every category of purchaser such as kids, tweens, teens, and adults. American Eagle Outfitters has further stores open globally and their product line is more assorted than its competitors and its name brand and logo is known world-wide.
In 2007, Harley Davidson was the world’s most profitable motorcycle company. They had just released great earnings and committed to achieve earnings per share growth of 11-17% for each of the next three years. Their CEO of 37 years, James Ziemer, knew this would be an extremely difficult task seeing Harley’s domestic market share recently top off at just under 50%. The domestic market was where Harley’s achieved the most growth over the past 20 years and with it leveling off, where was Harley going to get the 11-17% was the million dollar question.
One look at the common-size income statements for these companies can tell a story. While Jones Apparel Group was lagging at year ended 1998, even with a restructuring charge on Liz Claiborne’s income statement, 1999 was a different story. Huge growth at Jones lead to revenues double of that one year ago while Liz, while increasing, was quickly falling behind. The growth for both of these companies continued into the year ended 2000, but Jones Apparel Grou...
PetSmart and Petco are very similar with their retail pet product stores. Petco was founded first in 1965 in San Diego, California and PetSmart came along twenty years later in 1986 in Arizona. More than one-half of the Pet Stores industry’s revenue comes from these two specialty supply retailers: PetSmart and Petco. The other portion of the industry consists of family-owned stores, small franchises, and small chains of pet stores. The pet store industry continues to grow due to the discretionary income family’s produce and owners’ tendencies to treat their pets like family. PetSmart aims to provide a one-stop shopping experience.
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Internal resource is the first consideration that can lead to sustainable competitive advantage and Resource –Based View (RBV) is a theory that usefully helps a firm focus on internal resources (Kraaijenbrink, Spender & Aard, 2010). According to RBV (Valuable, Rare, hard to imitate and non-substitutable), companies have different tangible and intangible resources, these resources can be transformed into unique ability, this special ability cannot flow between firms and rival firms and difficult to reproduce. These unique resources and abilities are the source of enterprise sustainable competitive advantage. In this part, Starbucks and Apple are worth to be analyzed by RBV.
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Making an analysis of the profitability of the shareholder can be seen that although both companies have similar returns, the source of this return is different.
Stockholders responded to this in a favorable manner, shown by a 10 percent increase in share price preceding the announcement of a new CEO. It is pertinent to perform a SWOT Analysis for Kripsy Kreme, Inc. Their strengths are as follows. In order to regenerate sales and investor confidence I would make the following. recommendations for Krispy Kreme: use retained earnings, instead of franchises, to grow.