Petsmart 2003 Annual Report Download - page 28

A determination by tax regulators that our provision for income and other taxes is not adequate may result in a
material impact to our Ñnancial position.
We operate in multiple tax jurisdictions and could be subject to audit in these jurisdictions. These audits can
involve complex issues that may require an extended period of time to resolve and may cover multiple years. We
believe an adequate provision for income and other taxes has been made for all years subject to audit. A
determination by tax regulators in these jurisdictions that our provision for taxes is not adequate may result in a
material impact to our Ñnancial position.
Our business exposes us to claims that could result in adverse publicity, harm to our brand, and a reduction in
our sales.
We are occasionally subject to claims due to the injury or death of a pet in our stores or while under our care in
connection with the pet services we provide. In addition, we sell certain small pets including Ñsh, birds, reptiles, and
small rodents in our stores. Given the large number of small pets we sell, deaths or injuries of these small pets
sometimes occur while they are within our care. As a result, we may be subject to claims that we do not properly
care for these small pets. We may also be subject to claims resulting from the transfer of diseases from pets in our
stores to associates and customers. In addition, from time to time, we have been subject to product liability claims
for some of the products we sell. Any negative publicity or claims relating to any of the foregoing could harm our
reputation and business, as well as expose us to litigation expenses and damages.
Pending legislation, weather, disease, or other factors could disrupt the supply of the small pets and products we
sell, which could harm our reputation and decrease sales.
There is generally a signiÑcant 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 diseases that can quickly decrease or destroy the supply
of these pets. In addition, our supply of products may be negatively impacted by weather, disease, contamination, or
trade barriers. Any disruption in the supply of products to our stores, due to legislation, weather, disease, or any
other factor, could harm our reputation and decrease our sales.
Fluctuations in the stock market, as well as general economic and market conditions, may harm the market
price of our common stock.
Over the last several years, the market price of our common stock has been subject to signiÑcant Öuctuation.
The market price of our common stock may continue to be subject to signiÑcant Öuctuations in response to
operating results and other factors including, but not limited to:
‚ Announcements by analysts regarding their assessment of PETsMART and our prospects;
‚ Announcements of our Ñnancial results, particularly if they diÅer from investors' expectations;
‚ 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 and consolidations;
‚ The prospects of our industry; and
‚ Hostilities and acts of terrorism.
In addition, the stock market in recent years has experienced price and volume Öuctuations that often have
been unrelated or disproportionate to the operating performance of companies. These Öuctuations, as well as general
economic and market conditions, may harm the market price of our common stock.
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