PetSmart to consider selling itself
Bowing to pressure from investors, PetSmart Inc. said Tuesday that it is considering putting itself up for sale.
The pet supply chain said that it will weigh “strategic alternatives” after a board review that included conversations with shareholders.
Investment firm Longview Asset Management and hedge fund Jana Partners have both called on PetSmart to sell itself, a move they say would benefit shareholders. Longview has about a 9 percent stake in PetSmart, while Jana holds nearly 10 percent, according to FactSet.
The company also said it plans to cut costs. It said it will provide more details next quarter and expects to realize the savings by the end of its next fiscal year.
Its shares rose 3.4 percent to $72.10 in after-hours trading. The stock has dropped 4 percent this year.
The Phoenix-based company in May cut its earnings outlook for the year, citing a challenging consumer environment and competition.
PetSmart said Tuesday that it is focusing on pet food, exclusive brands and services, online shoppers and a loyalty program. It also announced a $130 million acquisition of online retailer Pet360, whose websites include Pet360.com, PetFoodDirect.com and petMD.com, to bolster its online business.
In the fiscal second quarter, PetSmart’s earnings rose 5.1 percent to $98.1 million, or 98 cents per share. Revenue in the quarter that ended on Aug. 3 rose 1.4 percent to $1.73 billion.
It left its guidance for the year unchanged.