In this week's pageant of pet retailing contestants, the investors declared Petco Animal Supplies (NASDAQ:PETC) the winner over PETsMART (NASDAQ:PETM). Petco exceeded expectations for its second-quarter performance (its release was on Wednesday) while PETsMART remained in line or drifted under.

The Wall Street judges banded together to declare Petco "Best in Show." As a result, the stocks reacted in opposite directions yesterday after PETsMART submitted its numbers for the competition. Petco's prize for its winning performance was $3.18 per share, or a 10.7% increase. PETsMART's penalty was a loss of $1.46 per share, or a 4.9% decline (it was down more than 10% at one point today). PETsMART shareholders can take some comfort that they were not disqualified like Pet Med Express (NASDAQ:PETS), which is down 65% from its 52-week high in February and spawning class-action lawsuits.

Let's look inside the scores to see what we can learn.

Comps EPS Growth Sales (millions)
PETC 6.7% 34% $439
PETM 5.4% 21% $806

Consensus Expected
Comps EPS Growth Sales
PETC 6% 26% $440
PETM 6.5% 21% $817

Without a comparison to Street expectations, you would think both companies had rock-solid quarters. Petco outpaced its expectations for same-store sales and EPS growth. But PETsMART missed its sales and same-store sales expectations. Fellow Fool contributor Phil Wohl cited an earnings quality issue at PETsMART, too.

Can we learn anything about how well the businesses are positioned for the future? PETsMART's services business is growing fast and earning high margins. Petco didn't mention how its services business did. Petco cited consumers moving toward higher-margined products. So did PETsMART. Petco talked about the success of its remodeling efforts. PETsMART noted its industry-leading productivity. I think both retailers are very good at what they do and are likely positioned equally.

Petco also raised its EPS estimates for the year. As a result, CIBC upgraded Petco while downgrading PETsMART. And given that the stock prices moved in the opposite direction, I think other analysts recommended shifting money from PETsMART to Petco as well. Analysts think alike and, once again, we see strong price movements as the Street tries to make a trend out of one quarter.

Petco had a great quarter, but PETsMART's quarter was not that bad. But when you try to set the expectations of the judges, prepare to have more volatile price movements. More work has to be done to see whether either of these businesses is a good value or not -- a quick look at the P/E ratios says no as compared with expected growth rates. But my takeaway to you is this -- one quarterdoes not a trend make. And if the Street sees the numbers reversed in the next quarter, expect the "smart" money to follow the short-term winner again. So start primping for the next pageant.

Fool contributor David Meier has great pictures and memories of taking his dogs to PETsMART. His wife's water broke there, too! He owns none of the stocks mentioned.