PetSmart (PETM) is currently one of my six holdings in my 'trading portfolio'.  Up till today I owned 90 shares of PetSmart that I purchased back on November 20, 2008, at a cost basis of $15.50.  PETM closed at $20.35 today, down $(1.95) or (8.74)% so I still have a significant gain on this particular purchase.

Yesterday (5/20/09) after the close of trading PetSmart (PETM) announced 1st quarter 2009 results.  For the quarter ended May 3, 2009, the company earned $46.3 million or $.37/share on revenue of $1.33 billion, up from $41.2 million or $.32/share last year.  According to this report, Thomson Reuters analysts had been expecting a profit of $.30/share on revenue of $1.35 billion. 

Thus the company actually exceeded earnings estimates but did in fact miss revenue expectations by a small amount.  Same-store sales did increase 3.9% during the quarter.

PetSmart also went ahead and estimated profit of $.26 to $.30/share for the next quarter and raised full-year profit estimates to $1.42 to $1.52/share from prior guidance of $1.40 to $1.50/share.  The company guided expectations on revenue growth to the 'mid- to high-single digit sales'.  They also suggested that same-store sales growth is likely to continue albeit in the low-single digits. 

Thus the company announced positive earnings growth both absolutely as well as positive same-store sales growth, beat expectations on earnings, came in a little bit light on revenue and then raised guidance for the year on earnings.  Really not too shabby a result from my amateur perspective.

And yet for this the stock was punished severely. 

To be fair, an amateur is no match for a Goldman Sachs analyst who downgraded the retailer "despite its better-than-expected earnings in the first quarter."

As this article reported:

"Goldman analyst Matthew Fassler said the Phoenix-based company has "executed well," with strong sales and earnings compared to the rest of the retail sector and well-controlled costs.