Petsmart 2003 Annual Report Download - page 4

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2
April 26, 2004
Dear Fellow Stockholders:
In 2003, we made strides in our quest to drive strong,
sustainable results, and we set the foundation
for the next phase of our evolution—building a
powerful brand.
For the year, PETsMART earned $0.95 per share,
compared to $0.63 per share in 2002. Topline sales
grew 11.2 percent year over year, and comparable
store sales increased 7.0 percent. Our pet services
business continued to surpass expectations, growing
at 25.4 percent for the year. And, we generated
$246.4 million in cash from operations, further
strengthening our balance sheet and our ability
to finance new growth initiatives.
We ended the year with 60 net new stores, giving
us a presence in nearly all of North America’s
top 60 markets. In 2004, we will open 90 net new
stores, adding up to annual square footage growth
of about 12 percent.
We completed reformats of virtually every store in
the chain, changing the shopping experience in
ways that matter to our customer, driving returns
and further differentiating PETsMART from
the competition. The format is flexible and gives
us the ability to easily adapt to an ever-changing
marketplace. In 2004, we’re building on that
format. By the fourth quarter, each of our stores
will have new in-store signage that’s designed
to improve our communications with customers.
And, we’re testing other in-store enhancements
to make our stores easier to shop and to build
long-term relationships with our customers.
Pet services continue to be an engine of profitable
growth and give us the opportunity to create
and enhance our relationships with our customers.
And, once pet parents discover our services,
they do not leave us. Our pet services are three
times more profitable than the core store and
have consistently grown at or above our target
of 20 percent. We expect these growth rates to
continue for at least the next two years. Our
customers trust us, and by providing high-quality
grooming and training services, we’ve earned the
right to move into new service adjacencies.
“Once pet parents discover our services,
they do not leave us.”