Petsmart 2011 Annual Report Download - page 26

Pending legislation, weather, catastrophic events, disease, or other factors, could disrupt our operations,
supply chain and the supply of small pets and products we sell, which could harm our reputation and decrease
sales.
There is generally a significant amount of legislation pending at the federal, state, provincial and local levels
regarding the handling of pets. This legislation may impair our ability to transport the small pets we sell in our
stores. The small pets we sell in our stores are susceptible to health risks and diseases that can quickly decrease
or destroy the supply of these pets. In addition, our supply of products may be negatively impacted by weather,
catastrophic events, disease, supply chain malfunctions, contamination or trade barriers. Any disruption in our
operations or the supply of products to our stores could harm our reputation and decrease our sales.
Fluctuations in the stock market, as well as general economic and market conditions, may impact our
operations, sales, financial results and market price of our common stock.
Over the last several years, the market price of our common stock has been subject to significant fluctua-
tions. The market price of our common stock may continue to be subject to significant fluctuations in response to
the impact on our operations, sales and financial results of a variety of factors including, but not limited to:
• General economic changes;
• Actions taken by our competitors, including new product introductions and pricing changes;
• Changes in the strategy and capability of our competitors;
• Our ability to successfully integrate acquisitions;
• The prospects of our industry;
• Natural disasters, hostilities and acts of terrorism; and
• National or regional catastrophes or circumstances, such as a pandemic or other public health or welfare
scare.
In addition, the stock market in recent years has experienced price and volume fluctuations that often have
been unrelated or disproportionate to the operating performance of companies. These fluctuations, as well as
general economic and market conditions, including but not limited to those listed above, may harm the market
price of our common stock. Further, a change in an analyst’s published opinion or rating of our business could
impact the market price of our common stock.
Continued volatility and disruption to the global capital and credit markets may adversely affect our ability to
access credit and the financial soundness of our suppliers.
Financial turmoil affecting the banking system and financial markets and the risk that additional financial
institutions may consolidate or become insolvent has resulted in a tightening in the credit markets, a low level of
liquidity in many financial markets, and volatility in credit, currency and equity markets. In such an environment,
there is a risk that lenders, even those with strong balance sheets and sound lending practices, could fail or refuse
to honor their legal commitments and obligations under existing credit commitments, including but not limited
to: extending credit up to the maximum permitted by credit facility, allowing access to additional credit features
and otherwise accessing capital and/or honoring loan commitments. If our lender fails to honor its legal
commitments under our credit facility, it could be difficult in this environment to replace our credit facility on
similar terms. And if our suppliers or key third party vendors of necessary services and technical systems
encounter similar difficulties with credit or liquidity in their own businesses, our business may also be adversely
affected.
16