Petco’s Profit Edges Higher on Revenue From Services

Petco Animal Supplies Inc. said Thursday that fiscal fourth-quarter profit rose slightly on stronger sales in its pet services business.

Net income for the period ended Jan. 28 was $26.8 million, or 46 cents a share, compared with $26.3 million, or 45 cents, a year earlier. Sales rose 10% to $541.5 million, the San Diego-based retailer said. Sales at stores open at least a year, a key measure of retail health, rose 2% during the quarter.

Analysts on average were expecting 45 cents a share excluding some items, according to Reuters Estimates.

For its first quarter, the retailer said same-store sales were expected to rise 1% to 3%.

Earnings are expected to be 23 cents to 25 cents a share, excluding stock-based compensation costs.

Petco expects to open about 90 stores in 2006.

Harris Nesbitt analyst Sean McGowan said the company’s first-quarter outlook appeared weak, adding that investors’ positive reaction to Thursday’s announcement might not last.

“Including options expense, it might not look quite as good,” McGowan said.

For the full year, Petco forecast earnings of $1.48 to $1.52 a share, excluding stock-based compensation costs.

Analysts are expecting earnings of $1.40, according to Reuters Estimates.

Petco shares rose 45 cents to $21.71 in after-hours trading. Earlier, the stock closed up 46 cents at $21.26.