Petsmart Inc. reported it performed better than it expected in the fourth quarter, as improvements in store traffic and a strong holiday season bolstered its financial results.

Comp store sales grew 1.5 percent for the quarter and 1.6 percent for the year. Service sales increased 8.3 percent to $141.6 million for the quarter and 9.2 percent to $575 million for the year.

Petsmart’s rapid services growth may taper slightly this year.

“For 2010, we remain cautiously optimistic about the economic climate,” said Chip Molloy, senior vice president and CFO.  “For all of 2010, we anticipate low-single digit sales comps, total sales growth in the low-to mid-single digit range and services growth of low- to mid-single digits.”

Petsmart also plans to spend up to $135 million on capital expenditure projects, growing its square footage by 3 to 3.5 percent.

For its fourth quarter ended Jan. 31, 2010, Petsmart reported net income of $75 million on sales of $1.41 billion, compared to net income of $78.4 million on sales of $1.36 billion.

“We are pleased to report our results for the fourth quarter, with solid earnings and positive comparable store sales,” said Bob Moran, CEO and president. “Improvements in traffic, as well as a strong holiday performance, led to better results than expected for the quarter.

For the year, Petsmart posted net income of $198.3 million on sales of $5.34 billion, compared to net income of $192.7 million on sales of $5.07 billion in the previous year. <HOME>