If you're one of the many Americans with a pet, you know that taking care of that pet is no small feat. And with gourmet dog food, high-priced grooming, and countless other products and services, pets have become a very big business.
Phillip Francis is hoping to get a bigger bite of that sector. Francis is CEO of PetSmart, the largest specialty retailer of services and solutions for pets, and a company currently valued around 1.9 billion dollars on Wall Street. He recently played "Buy, Sell, or Hold?" with David and Tom Gardner on The Motley Fool Radio Show.
David: Phil, let's play our game, "Buy, sell, or hold." We'll toss out some things happening in the animal world, and ask you, if they were stocks, would you be buying, selling, or holding, and a sentence or two why.
First up, it's a classic dog food. Buy, sell, or hold -- Alpo?
Phillip Francis: Hold... I think. Alpo is a great brand name that's always going to be a solid, solid brand name. I think the most rapid growth in the dog food segment is the premium foods, which are of premium nutrition with higher nutrition density.
Tom: Buy, sell, or hold -- sweaters for dogs?
Phillip Francis: I would buy sweaters for dogs, as people are treating pets more and more like family. I mean, with the cold weather in the northeast, we've had a terrific sweater season in the year that just finished, while everybody is digging out for snow and having snow days for school. We've had a very, very good year in apparel, and we're getting good at fashion. We have seasonally adjusted, colorful holiday sort of stuff now. If you'd like a raincoat, now we can do it for you. If you'd like a Harley Davidson, we can do it for you. [laughter] And I would definitely buy sweaters for dogs.
David: Next one up, very simply, hamsters -- buy, sell, or hold?
Phillip Francis: I would buy hamsters. Lots of people are figuring out that pets are a good way to introduce a child to responsibility. And hamsters, as compared to some of the others, are lower maintenance. So, the precision required to care for a hamster might be a bit less than what it would be, for example, to care for a dog. I think hamsters as a starter pets for people looking for more in-home activities are attractive candidates, and I would be buying those hamsters.
David: Let me ask you, Phil, since I have a son who is six years old, who just made his first pet purchase. We ended up going with guinea pigs. Here's the real question: Guinea pigs versus hamsters versus gerbils. Which one should we have selected?
Phillip Francis: I haven't got the faintest idea! [laughter] But, I can get back to you offline, if you would like, to talk to a real expert.
Tom: And finally, buy, sell, or hold -- a reality TV show based on pet life?
Phillip Francis: I haven't been a big user of reality TV shows, myself, although I see them in my house sometimes. I think I'd probably put a double-buy on it, because if there is a pet in it, on a magazine, on a TV, or in an ad, people are naturally drawn to it, and I think it would probably be a terrific success.
Tom: Word to Fox Television -- we've found a sponsor for you. Phillip Francis is the CEO of PetSmart. He joined us from PetSmart Corporate Headquarters in Phoenix, Ariz. Phillip Francis, thanks for joining us on The Motley Fool Radio Show.