Petsmart 2011 Annual Report Download - page 11

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
comparable 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, perform-
ance 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 2011 fiscal year ended on January 29, 2012, and was a 52-week year. The 2010 and 2009 fiscal years
were also 52-week years. Unless otherwise specified, all references in this Annual Report on Form 10-K to years
are to fiscal years.
Item 1. Business
General
We opened our first stores in 1987 and have become the 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 CareSM of pets.
We opened 45 net new stores in 2011 and at the end of the year operated 1,232 retail stores in the United
States, Puerto Rico and Canada. Square footage in 2011 increased 0.6 million to 27.2 million compared to
26.6 million in 2010. Our stores typically range in size from 12,000 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 brands across a
range of product categories.
We complement our strong product assortment with a wide selection of pet services, including grooming,
training, boarding and day camp. All our stores feature pet styling salons that provide high-quality grooming
services and offer comprehensive pet training services. As of January 29, 2012, we offered pet boarding at 192 of
our stores through our PetSmart PetsHotels®, or “PetsHotels.”
As of January 29, 2012, there were full-service veterinary hospitals in 799 of our stores. MMI Holdings,
Inc., through a wholly owned subsidiary, Medical Management International, Inc., collectively referred to as
“Banfield,” operated 791 of the hospitals under the registered trade name of “Banfield, The Pet Hospital.” The
remaining 8 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 and community site, as well as
selected social networking sites.
The Pet Industry
The pet industry serves a large and growing market. The American Pet Products Association, or “APPA,”
estimated the calendar year 2011 market at approximately $50.8 billion, an increase of nearly 200% since
calendar year 1994. Based on the 2011-2012 APPA National Pet Owners Survey, approximately 62% of
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