Petsmart 2009 Annual Report Download - page 9

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.
The 2009 fiscal year ended on January 31, 2010, and was a 52-week year. The 2008 fiscal year was also a 52-week
year, while the 2007 fiscal year was a 53-week year. Unless otherwise specified, all references in this Annual Report
on Form 10-K to years are to fiscal years.
Item 1. Business
General
During 2009, we generated net sales of $5.3 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 members of the family. Our
strategy is to attract and keep these customers by becoming the preferred provider for the Total Lifetime Care
SM
of
pets.
We opened 37 net new stores in 2009 and at the end of the year operated 1,149 retail stores in North America.
Square footage in 2009 increased 0.8 million to 25.9 million compared to 25.1 million in 2008. Our stores typically
range in size from 18,000 to 27,500 square feet and carry a broad selection of high-quality pet products at everyday
low prices. We offer approximately 10,000 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 January 31, 2010, we offered pet boarding at 162
of our stores through our PetSmart PetsHotels», or “PetsHotels.” As of January 31, 2010, there were full-service
veterinary hospitals in 752 of our stores. Medical Management International, Inc., an operator of veterinary
hospitals, operated 740 of the hospitals under the registered trade name of “Banfield, The Pet Hospital.” The
remaining 12 hospitals are operated by other third parties in Canada.
Our PetPerks»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 pets.com, our pet community
site.
The Pet Industry
The pet industry serves a large and growing market. The American Pet Products Association, or “APPA,”
estimated the calendar year 2009 market at approximately $45.4 billion, an increase of more than 165% since
calendar year 1994. Based on the 2009/2010 APPA National Pet Owners Survey, approximately 62% of households
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