Petsmart 2007 Annual Report Download - page 7

PART I
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on
management’s current expectations and beliefs about future events or future financial performance. We have
attempted to identify forward-looking statements by words such as: “anticipate,” “believe,” “can,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will” or other com-
parable terminology. These statements are not guarantees of future performance or results and involve known and
unknown risks, uncertainties and other factors, including the risks outlined under “Item 1A. Risk Factors”
contained in Part I of this Annual Report, that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements.
Although we believe the expectations and beliefs reflected in the forward-looking statements are reasonable,
such statements speak only as of the date this Annual Report on Form 10-K is filed, and we disclaim any intent or
obligation to update any of the forward-looking statements after such date, whether as a result of new information,
actual results, future events or otherwise, unless required by law.
Our fiscal year consists of the 52 or 53 weeks ending on the Sunday nearest January 31 of the following year.
Unless otherwise specified, all references in this Annual Report on Form 10-K to years are to fiscal years. The 2007
fiscal year ended on February 3, 2008 and was a 53-week year. The 2006 and 2005 fiscal years were 52-week years.
Item 1. Business
General
In 2007, we generated net sales of $4.7 billion, making us North America’s leading specialty provider of
products, services and solutions for the lifetime needs of pets. We have identified a large group of pet owners we call
“pet parents,” who are passionately committed to their pets and consider their pets to be family members. Our
strategy is to attract and keep these customers by becoming the preferred provider for the Total Lifetime Care
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of
pets. As part of this strategy, we focus on driving efficiencies in our stores, in our processes and in our systems, on
growing our pet services business and on delighting our customers by providing a superior store environment, a
superior shopping experience and superior service.
We opened or acquired 100 net new stores in 2007 and, at the end of the fiscal year, operated 1,008 retail stores
in North America. Square footage in 2007 increased 2.0 million to 22.8 million compared to 20.8 million in 2006.
Our stores typically range in size from 19,000 to 27,000 square feet and carry a broad and deep selection of high-
quality pet supplies at everyday low prices. We offer more than 10,500 distinct items, including nationally
recognized brand names, as well as an extensive selection of proprietary or private label brands across a range of
product categories.
We complement our strong product assortment with value-added pet services, including grooming, training,
boarding and day camp. All our stores offer complete pet training services and virtually all our stores feature pet
styling salons that provide high-quality grooming services. As of February 3, 2008, we offered pet boarding at 97 of
our stores through our PetSmart PetsHotels»or “PetsHotels.” As of February 3, 2008, there were full-service
veterinary hospitals in 685 of our stores. Medical Management International, Inc., an operator of veterinary
hospitals, operated 673 of the hospitals under the registered trade name of “Banfield, The Pet Hospital.” The
remaining 12 hospitals are located in Canada and operated by other third parties.
Our PetPerks»loyalty program enables us to understand the needs of our customers and target offers directly to them.
We also reach customers through PetSmart.com», our pet e-commerce site, as well as petsmartbebettertogether.com, our
pet community site. In 2007, we completed the exit of our equine product line including the sale of StateLineTack.com and
our equine catalog.
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