PetSmart ($PETM), the largest global retailer of pet healthcare products and pet supplies, is "exploring" the possibility it will put itself up for sale in the wake of its acquisition of online pet specialty retailer Pet360.com.
The Phoenix-based company announced the purchase of Pet360, for up to $160 million, late last month in its quarterly earnings report. Simultaneously, it issued a press release that the company was looking into options of a potential sale.
"Notwithstanding our confidence in the company's future prospects, following a detailed board review of the company over the last several months, including many constructive conversations with a wide range of shareholders, we have decided to explore options to maximize shareholder value, including a potential sale of the company," Gregory Josefowicz, PetSmart's chairman, said in a statement.
The primary source of pressure to sell is coming from Jana Partners, an activist hedge fund that has acquired a nearly 10% stake in PetSmart, The New York Times reported. A forecast for continued flat sales for the company is behind Jana's desire to see a sale, and a return on its investment, the paper said.
Net income for the second quarter reported last month saw a 5% gain to $98.1 million against the same period last year, but net sales increased a slight 1.4% to $1.7 billion. Comparable store sales for locations open at least one year fell 0.5%, while comparable transactions slipped 1.4% to $1.7 billion.
In the earnings report, the company confirmed its guidance for the remainder of the year, which included a forecast of flat sales growth and another potential decline in comparable store sales for the third quarter.
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