NEW YORK (AP) — PetSmart Inc. said Monday that its board is considering possibly returning more money to its shareholders after an activist hedge fund bought a big stake in the company and urged it to improve its performance.
The pet food retailer said in a filing with the Securities and Exchange Commission that it is still evaluating how to increase shareholder value. But it added that there was no guarantee that any changes will be made.
Companies typically increase shareholder value by buying back stock or issuing dividends. PetSmart did not specify what it plans to do.
On Thursday, activist hedge fund Jana Partners reported a 9.9 percent stake in PetSmart and said it wants the company to consider selling itself or improve its performance. Since then, PetSmart's shares rose more than 13 percent from its closing price of $59.81 Wednesday.
PetSmart reported disappointing revenue in the first quarter due to increasing competition and lower consumer spending. To boost sales, PetSmart has been adding more pet grooming services and fresh pet food. The Phoenix-based company has more than more than 1,340 stores around the country.
It shares added 56 cents to $67.84 in afternoon trading Monday. Its shares are still down nearly 7 percent since the beginning of the year.
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