Petco Profit Declines 6.7%

Petco Animal Supplies Inc. on Thursday posted a lower profit for its fiscal second quarter because of higher costs and weaker customer traffic. Its shares fell nearly 9% in after-hours trading.

The San Diego-based retailer also issued a profit forecast for its fiscal third quarter and full year below Wall Street estimates, citing high pump prices and marketing investments.

Petco estimated that sales at stores open at least a year -- a key measure of growth -- would be flat to 2% higher in the August-to-October period and up 2% to 4% for the year.

The company expects third-quarter earnings of 25 to 28 cents a share. It forecast full-year earnings, excluding the effect of debt retirement costs, of $1.36 to $1.44.

On that basis, analysts on average expected a full-year profit of $1.64 a share.

In its second quarter, Petco said, net income fell to $18 million, or 31 cents a share, from $19.3 million, or 33 cents, in the same period a year earlier, a drop of 6.7%. Sales rose 10% to $482.7 million, boosted by the services business.

Analysts had expected a per-share profit of 31 cents on revenue of $487.8 million.

Petco shares fell to $23.32 in after-hours trading after losing 70 cents to $25.55 in regular trading Thursday.

On Wednesday, rival PetSmart Inc. also forecast third-quarter earnings that missed Wall Street expectations.