Petsmart 2004 Annual Report Download

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Heart
The of
Business
Our

Table of contents

  • Page 1
    Heart of Our Business The

  • Page 2
    ...of services and solutions for the lifetime needs of pets. The company operates more than 725 pet stores in the United States and Canada, a growing number of in-store PETsHOTELs, as well as a large pet supply catalog business and a leading online provider of pet products and information (www.petsmart...

  • Page 3
    There's a special place and time in every PETsMART store where, every day, the simple becomes extraordinary. ® It's the groomer's reassuring word and gentle stroke. It's the extra touch. It's a caring story exchanged in the cat food aisle. It's the genuine smile. It's a playful greeting at the ...

  • Page 4
    ... testing in late 2004 on a 2,400 square-foot, stand-alone Doggie Day Camp™ inside our Pasadena, Calif., store. We'll test up to five more locations in 2005. • PETsHOTEL and Doggie Day Camp give added dimension to our brand by expanding our ability to provide Total Lifetime Care™ for pets...

  • Page 5

  • Page 6
    "Customer service like this is legendary, and you can be sure that my experience will be conveyed to everyone who will listen. I'd say quality customer service, such as David Place displayed to me today is rare, but not at PETsMART, especially at David's store." C H U C K H A G U E , M A R I E T ...

  • Page 7
    ... GA PETsMART customer Chuck Hague, a pet parent to three dogs, two cats and a hamster, had already had one memorable experience at PETsMART when he returned with another problem. The first time, he was searching for a replacement for a defective filter. "The manager simply walked up to a box, opened...

  • Page 8
    ...as we develop and enhance our service offerings as well as grow our product and pet lines. • Nearly one quarter of our stores serve equine customers through our State Line Tack® business and more than half offer veterinary services through Banfield, The Pet Hospital® . • PETsMART products also...

  • Page 9

  • Page 10
    ... language for her name as well as praise such as "good girl!" Triumphant (At right) Bryan Bradley and his parents credit Tina Gannon's extraordinary efforts with saving their dog's life. A PETsMART accredited pet training instructor at Store 271 in Davenport, Iowa, Tina used hand signals and sign...

  • Page 11

  • Page 12

  • Page 13
    ... cats and dogs. Instead, we donate store space to local animal welfare organizations, who in partnership with PETsMART Charities, help give homeless pets a second chance at life. • PETsMART Charities Adoption Centers on average find homes for more than 7,000 pets weekly. • PETsMART and PETsMART...

  • Page 14
    ...their new puppy Lola, a Shepherd Chow mix, after their beloved 13-year-old dog Freeway had died. During most of the Freeway years, they shopped at a competitor and used its loyalty card. "Not once did we receive coupons of any kind, not to mention any type of greeting or customer service," Kimberlei...

  • Page 15

  • Page 16
    14

  • Page 17
    ... pets like children, grooming services are increasingly being treated as more necessity than luxury. • PETsMART grooming salons are carefully designed and equipped to ensure the highest levels of safety and comfort and groomers must pass a rigorous training and certification program before working...

  • Page 18
    ... to develop our grooming, training and PETsHOTEL businesses, and we're finding new adjacencies that also can deliver solid shareholder returns. We are consolidating this highly fragmented business and creating new markets by exposing these services to customers who never have used them before. Pet...

  • Page 19
    ...' needs and delivering solutions, store appearance, short checkout lines, in-stocks and employing passionate, well-trained associates. 30 20 10 0 2002 2003 2004 SALES PER SQUARE FOOT 200 The PetPerks® savings card, our customer relationship marketing program, has exceeded our expectations...

  • Page 20
    ... for these board committees clearly establish committee member roles and responsibilities. • PETsMART has a clear code of business ethics and policies. • PETsMART has complaint procedures in place for both associates and others. • The internal audit department of PETsMART reviews key areas of...

  • Page 21
    ...check mark whether registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes ¥ No n The aggregate market value of the common stock held by non-aÇliates of the registrant, based on the closing sale price of the Registrant's Common Stock on August 1, 2004, the last business day...

  • Page 22
    ... Procedures Other Information PART III Directors and Executive OÇcers of the Registrant Executive Compensation Security Ownership of Certain BeneÃ'cial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions Principal Accountant Fees and Services...

  • Page 23
    ... providing a superior store environment, a superior shopping experience and superior service. We have improved our distribution capabilities, implemented new management information systems, focused on developing our pet services business and worked to develop a culture of customer service. In Ã'scal...

  • Page 24
    ..., veterinary care, pet services (such as grooming or boarding) and purchases of pets. The APPMA estimates dog food, cat food and treats are the largest volume categories of pet-related products and in 2004 approximated $14.2 billion, or more than 40% of the market. Many premium pet food brands...

  • Page 25
    ...the annual incentive program for managers, from the store level to the executive team, is linked to key customer service metrics. By providing pet parents with expertise and solutions, we believe we are strengthening our relationships with customers, building loyalty and enhancing our leading market...

  • Page 26
    ... do not own any trailers. We operate the following distribution centers: Location Square Footage Date Opened Distribution Type Brockport, New York Phoenix, Arizona Ennis, Texas Columbus, Ohio Gahanna, Ohio Hagerstown, Maryland Newnan, Georgia Phoenix, Arizona Reno, Nevada 392,000 447,000...

  • Page 27
    ... techniques. Pet training services range from puppy classes to advanced and private courses. PETsHOTEL provides boarding for dogs and cats, 24-hour supervision, an on-call veterinarian, temperature controlled rooms and suites, daily specialty treats and play time as well as day camp for dogs. During...

  • Page 28
    ...Financial Information by Business Segment and Geographic Data As of February 2, 2004, we had three operating segments; PETsMART North America, which included all retail stores; PETsMART Direct, which included our equine catalog and equine Internet operations; and PETsMART.com, which included our pet...

  • Page 29
    ... the PETsMART website located at www.petm.com. Business Risks In the normal course of business, our Ã'nancial position is routinely subjected to a variety of risks, including market risks associated with store expansion, investments in information systems, international expansion, vendor reliability...

  • Page 30
    ...cient operation of our business is dependent on our information systems. In particular, we rely on our information systems to eÃ...ectively manage our sales, warehousing, distribution, merchandise planning and replenishment functions and to maintain our in-stock positions. We possess oÃ...site recovery...

  • Page 31
    ...We buy from several hundred vendors worldwide and, together, our two largest vendors accounted for approximately 15.2% of our total sales for Ã'scal 2004. Sales of premium pet food for dogs and cats comprise a signiÃ'cant portion of our revenues. Currently, most major vendors of premium pet foods do...

  • Page 32
    ... exchange rates; ‚ Changes in international staÇng and employment issues; ‚ TariÃ... and other trade barriers; ‚ The burden of complying with foreign laws, including tax laws; and ‚ Political and economic instability and developments. Our business may be harmed if the operation of veterinary...

  • Page 33
    ... to our Ã'nancial position. The Internal Revenue Service is currently examining our tax returns for the 2002 tax year. 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...

  • Page 34
    ... certiÃ'cate of incorporation. In August 1997, our Board of Directors adopted a Stockholder Rights Plan, commonly referred to as a poison pill, under which one preferred share purchase right was distributed on August 29, 1997, for each share of common stock held on that date. We are also subject to...

  • Page 35
    ...Vice President, Services, Strategic Planning and Business Development Senior Vice President, People Senior Vice President, Merchandising and Supply Chain Management Vice President, Chief Accounting OÇcer Philip L. Francis has been a director of PETsMART since 1989, and Chief Executive OÇcer since...

  • Page 36
    ... worked as a consultant for Bain & Company, Inc., a global management consulting Ã'rm. Prior to this, Mr. Hall held various operational and Ã'nancial positions at EXXON Company, U.S.A. David K. Lenhardt joined PETsMART as Senior Vice President of Services, Strategic Planning and Business Development...

  • Page 37
    ...Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina Tennessee...

  • Page 38
    ...leases expire beginning in 2009. Our distribution centers and respective lease expirations are as follows: Location Square Footage Lease Expiration Ennis, Texas Phoenix, Arizona Columbus, Ohio Gahanna, Ohio Hagerstown, Maryland Newnan, Georgia Phoenix, Arizona Reno, Nevada 230,000 447,000...

  • Page 39
    ... time, distribute a quarterly dividend. Our credit facility permits us to pay dividends, so long as we are not in default and the payment of dividends would not result in default. In Ã'scal 2004, the following dividends were declared by the Board of Directors: Date Declared Dividend Amount per Share...

  • Page 40
    ... amount of annual purchases to $35.0 million. In September 2004, the Board of Directors approved a program authorizing the purchase of up to $150.0 million of our common stock through Ã'scal year 2005. This program replaces the March 2003 program. During Ã'scal 2004, we purchased 2,680,778 shares of...

  • Page 41
    ...Weighted average common and potentially dilutive common shares outstanding: Basic 143,888 141,641 134,148 112,006 111,351 Diluted 149,652 147,255 141,682 114,067 111,351 Selected Operating Data: Stores open at end of periodÏÏÏÏÏ 726 643 583 560 533 Square footage at end of period ÏÏ 16,967...

  • Page 42
    ..., as well as in the sections entitled Compensation, Distribution, Information Systems, Government Regulation and Business Risks included in Item 1 Part I of this Annual Report on Form 10-K. The accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations gives...

  • Page 43
    ... advertising, bonus and closed store expenses as a percentage of sales. ‚ During Ã'scal 2004, we purchased 2,680,778 shares of our common stock for approximately $80.0 million, or an average price of $29.84 per share, and we declared cash dividends totaling $0.12 per share. ‚ We expect to open...

  • Page 44
    ... the costs for future occupancy payments, net of expected sublease income, associated with closed stores using the net present value method, at a credit-adjusted risk-free interest rate, over the remaining life of the lease. Judgment is used to estimate the underlying real estate market related to...

  • Page 45
    ...net operating loss carryovers related to our purchase of PETsMART.com in Ã'scal year 2000, based on guidance issued from the Internal Revenue Service. As a result, we expect to utilize an additional $22.1 million of net operating losses previously considered unavailable. We recorded a total tax bene...

  • Page 46
    ... our net operating loss carryovers related to our purchase of PETsMART.com in Ã'scal 2000, based on guidance issued from the Internal Revenue Service. As a result, we expect to utilize an additional $22.1 million of net operating losses previously considered unavailable. We recorded a total tax bene...

  • Page 47
    ... a timing diÃ...erence due to the application of SFAS 146, ""Accounting for Costs Associated with Exit or Disposal Activities.'' The plan to close two of the four stores in 2002, and the related expense recognition, took place at the end of Ã'scal 2002. In 2002, we adopted SFAS 146, which requires us...

  • Page 48
    ... purchase under these programs. Common Stock Dividends We believe our ability to generate cash allows us to invest in the growth of the business and, at the same time, distribute a quarterly dividend. Our credit facility permits us to pay dividends, so long as we are not in default and the payment...

  • Page 49
    ..., based on our current plan to open 100 net new stores and twelve new PETsHOTELs, to Ã'xture and equip a new warehouse in Illinois, to continue our investment in the development of our information systems and to add to our services capacity with the expansion of certain grooming salons. We believe...

  • Page 50
    ...outstanding under our letters of credit. Related Party Transactions We have an investment in MMI Holdings, Inc., or MMIH, a provider of veterinary and other pet-related services. MMIH, through a wholly owned subsidiary, Medical Management International, Inc., or MMI, operates full-service veterinary...

  • Page 51
    ... of our expansion plans, the timing of new store openings and related preopening expenses, the amount of revenue contributed by new and existing stores, and the timing and estimated obligations of store closures, our quarterly results of operations may Ã-uctuate. Recent Accounting Pronouncements The...

  • Page 52
    ...well as changes in our credit standing. In addition, a market risk exists associated with fuel prices. Interest Rate Risk We have the ability to use a revolving line of credit and short-term bank borrowings to support seasonal working capital needs and to Ã'nance capital requirements of the business...

  • Page 53
    ...deÃ'ned in Exchange Act Rule 13a-15(f). Our internal control system is designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published Ã'nancial statements. A control system, no matter how well conceived and operated, can...

  • Page 54
    ... REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders PETsMART, Inc. Phoenix, Arizona We have audited management's assessment, included in the accompanying Management's Report on Internal Control Over Financial Reporting, that PETsMART, Inc. and subsidiaries (the ""Company...

  • Page 55
    ... of new leases to properly account for the following items: ‚ Rent holiday periods Ì The Company had previously recognized rent holiday periods on a straight-line basis over the lease term commencing with the store opening date rather than the date the Company has the right to control the use of...

  • Page 56
    ... and Executive Compensation,'' ""Stock Option Grants, Exercises and Plans,'' and ""Employment and Severance Arrangements'' to be contained in our proxy statement. Item 12. Security Ownership of Certain BeneÃ'cial Owners and Management and Related Stockholder Matters The information required by...

  • Page 57
    ...: The Ã'nancial statement schedule required under the related instructions is included within Appendix F of this Annual Report. See Index to Consolidated Financial Statements and Financial Statement Schedule on page F-1. 3. Exhibits: The exhibits which are Ã'led with this Annual Report or which are...

  • Page 58
    ... undersigned, thereunto duly authorized, on April 11, 2005. PETSMART, INC. By: PHILIP L. FRANCIS Philip L. Francis Chairman of the Board of Directors, and Chief Executive OÇcer /s/ POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes...

  • Page 59
    ... Date /s/ GREGORY P. JOSEFOWICZ Gregory P. Josefowicz /s/ AMIN I. KHALIFA Amin I. Khalifa RONALD KIRK Ronald Kirk Director April 8, 2005 Director April 8, 2005 /s/ Director April 8, 2005 /s/ RICHARD K. LOCHRIDGE Richard K. Lochridge BARBARA A. MUNDER Barbara A. Munder WALTER J. SALMON...

  • Page 60
    ...Stock Grant Agreements for the 2003 Equity Incentive Plan and 1997 Equity Incentive Plan Summary of Directors' Compensation Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm CertiÃ'cation of Chief Executive OÇcer as required by Rule 13a-14(a) of the Securities Exchange...

  • Page 61
    ... 1934, as amended CertiÃ'cation of Chief Financial OÇcer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended * ‰ Filed herewith. Compensation plans or arrangements in which directors or executive oÇcers are eligible to participate. (1) Incorporated by reference to...

  • Page 62
    ... Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such Ã'ling. (24) Incorporated by reference to Exhibit 10.7 to PETsMART's Annual Report on Form 10-K for the Ã'scal year...

  • Page 63
    ... STATEMENTS AND FINANCIAL STATEMENT SCHEDULE Page Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of January 30, 2005 and February 1, 2004 (as restated Consolidated Statements of Operations and Comprehensive Income for the Ã'scal years ended January 30, 2005...

  • Page 64
    ... ACCOUNTING FIRM Board of Directors and Stockholders PETsMART, Inc. Phoenix, Arizona We have audited the accompanying consolidated balance sheets of PETsMART, Inc. and subsidiaries (the ""Company'') as of January 30, 2005 and February 1, 2004, and the related consolidated statements of operations...

  • Page 65
    ... and outstanding Common stock; $.0001 par value; 250,000 shares authorized, 149,517 and 144,813 shares issued Additional paid-in capital Deferred compensation Retained earnings Accumulated other comprehensive income Less: treasury stock, at cost, 4,087 and 1,406 shares Total stockholders...

  • Page 66
    PETsMART, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME January 30, 2005 Fiscal Year Ended February 1, February 2, 2004 2003 (As restated, see (As restated, see Note 2) Note 2) (In thousands, except per share data) Net sales Cost of sales Gross proÃ't ...

  • Page 67
    ... of restricted stock and amortization of deferred compensation, net of award reacquisitions and adjustments Cash dividends ($0.12 per share Other comprehensive income, net of income tax: Foreign currency translation adjustments Purchase of treasury stock, at cost Net income BALANCE AT JANUARY...

  • Page 68
    ... and equipment 4,757 Capital assets received through vendor resolution Compensation expense related to non-employee options Tax beneÃ't from exercise of stock options 34,583 Deferred income taxes 1,895) Changes in assets and liabilities: Receivables, net 10,122) Merchandise inventories 28...

  • Page 69
    ... of January 30, 2005, the Company operated 726 retail stores. The Company oÃ...ers a broad line of products for all the life stages of pets and is the nation's largest provider of pet services, which includes professional grooming, pet training, boarding and day camp. PETsMART is a leading mail order...

  • Page 70
    ... 2004, respectively. Merchandise Inventories and Cost of Sales Merchandise inventories are stated at the lower of cost or market. Cost is determined using the Ã'rst-in, Ã'rst-out method based on moving average costs and includes certain procurement and distribution costs related to the processing of...

  • Page 71
    ... with the pet internet and pet catalog direct marketing channels, which remain an integral part of the Company's direct marketing strategies. Intangible assets consisted solely of trademarks that have an estimated useful life of 10 to 15 years. The trademarks have zero residual value. Changes in the...

  • Page 72
    ... requirement. As of January 30, 2005 and February 1, 2004, the Company had approximately $40,527,000 and $27,862,000, respectively, in reserves related to casualty, selfinsured health plans, employer's professional liability and workers' compensation insurance policies. Reserve for Closed Stores...

  • Page 73
    ... are shipped for catalog and electronic commerce sales. The Company records an allowance for estimated returns in the period of sale. Revenue for grooming, pet training, PETsHOTEL and Doggie Day Camp is recognized when services are performed. Net sales, denominated in US dollars, in Canada were...

  • Page 74
    ... by SFAS No. 123, ""Accounting for Stock-based Compensation'' (""SFAS No. 123''), the Company applies the provisions of Accounting Principles Board Opinion No. 25, ""Accounting for Stock Issued to Employees'' (APB No. 25) and related interpretations, in recording compensation expense for grants of...

  • Page 75
    ... option plans as well as an Employee Stock Purchase Plan (see Note 16). The Company accounts for those plans under APB No. 25 and related Interpretations. Accordingly, no compensation cost is reÃ-ected in net income, as all options granted under those plans had an exercise price equal to the market...

  • Page 76
    ... FASB Statement No. 123, ""Accounting for Stock-Based Compensation'' and supersedes APB Opinion No. 25, ""Accounting for Stock Issued to Employees'', and its related implementation guidance. FAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be...

  • Page 77
    ... interpretation of certain accounting issues and their application under accounting principles generally accepted in the United States of America (""GAAP'') relating to leases. As a result, PETsMART conducted an internal review and determined that certain of its lease accounting methods were not in...

  • Page 78
    ... its lease accounting review, the Company corrected the classiÃ'cation of certain items, including the amortization of leasehold improvements and expenses related to capitalized leases, in its balance sheets and statements of operations to conform with GAAP. ClassiÃ'cation of Auction Rate Securities...

  • Page 79
    ... Restated Fiscal Year Ended February 2, 2003 Cost of sales Gross proÃ't Operating, general and administrative expenses Operating income Interest expense Earnings before income tax expense Income tax expense Net income Comprehensive income Basic earnings per common share Diluted earnings...

  • Page 80
    ... Phoenix, Arizona during Ã'scal 2002. Note 4 ÃŒ Investments The Company has an investment in MMI Holdings, Inc., or MMIH, a provider of veterinary and other pet-related services. MMIH, through a wholly owned subsidiary, Medical Management International, Inc., or MMI, operates full-service veterinary...

  • Page 81
    ... in the Company's retail stores occupied by veterinary services, which is recorded as a reduction of cost of sales in the accompanying consolidated statements of operations. Licensing fees are determined by Ã'xed costs per square foot, adjusted for the number of days the hospitals are open and sales...

  • Page 82
    ...with SFAS No. 146, ""Accounting for Costs Associated with Exit or Disposal Activities.'' The costs for future rental payments associated with closed stores are calculated by using the net present value method, at a credit-adjusted risk-free interest rate, over the remaining life of the lease, net of...

  • Page 83
    ... 30, 2005 Dollars % Fiscal Year Ended February 1, 2004 Dollars % February 2, 2003 Dollars % Provision at federal statutory tax rate ÏÏÏÏ State income taxes, net of federal income tax beneÃ't Foreign taxes Costs associated with the settlement of litigation Change in valuation allowance Other...

  • Page 84
    ...quarter of 2004. This reduction was the result of an analysis based on recently issued guidance from the Internal Revenue Service of net operating loss carryovers related to the purchase of PETsMART.com in Ã'scal year 2000. As a result, the Company expects to utilize an additional $22,100,000 of net...

  • Page 85
    ...price of common shares. Note 11 ÃŒ Employee BeneÃ't Plans The Company has a deÃ'ned contribution plan pursuant to Section 401(k) of the Internal Revenue Code (the ""401(k) Plan''). The 401(k) Plan covers substantially all employees that meet certain service requirements. The Company matches employee...

  • Page 86
    ...were accounted for as a reduction of the proceeds. Share Purchase Programs In April 2000, the Board of Directors approved a plan to purchase the Company's common stock. In March 2003, the Board of Directors extended the term of the purchase of the Company's common stock for an additional three years...

  • Page 87
    ... guarantees provided for insurance programs, capital lease agreements and utilities. As of January 30, 2005, approximately $35,752,000 was outstanding under letters of credit. Operating and Capital Leases The Company leases substantially all of its stores, retail distribution centers and corporate...

  • Page 88
    ...the right to control the use of the property and includes open stores, closed stores, stores to be opened in the future, distribution locations and corporate oÇces. In addition to the commitments scheduled above, the Company has executed lease agreements for future store openings with total minimum...

  • Page 89
    ... the four-year term expired, the Company was required to pay the balance of the Ã'nancing, provide for the sale of the properties to a third party, or pay a guaranteed residual amount. The special purpose entity was created speciÃ'cally to hold the properties, which consisted of two land parcels and...

  • Page 90
    ...restricted stock under the PETsMART, Inc. 1997 Equity Incentive Plan and the PETsMART, Inc. 2003 Equity Incentive Plan. Under the terms of the plans, employees may be awarded shares of common stock of the Company, subject to approval by the Board of Directors. The employee may be required to pay par...

  • Page 91
    ... employee was not required to make any cash payment as a condition of receiving the award. The shares of restricted common stock awarded under the Restricted Stock Bonus Plan vested and were released from the Company's reacquisition right under an accelerated schedule when the Company's common stock...

  • Page 92
    ...vest over a period of three to four years and expire ten years after the date of grant. As of January 30, 2005, stock options to purchase 305,200 shares of common stock were also outstanding under the Company's 1996 Non-Employee Directors Equity Plan with exercise prices ranging from $3.03 to $19.00...

  • Page 93
    ... 2, 2004, the Company had three operating segments; PETsMART North America, which included all retail stores, PETsMART Direct, which included the Company's equine catalog and equine Internet operations and PETsMART.com, which included the Company's pet catalog and pet Internet operations. As of...

  • Page 94
    ... Fourth Quarter As restated(1) Net sales Gross proÃ't Operating income Income before income tax expense Net income Earnings per common share: Basic Diluted Dividends declared per common share Weighted average common and common equivalent shares outstanding Basic Diluted $796,314 239...

  • Page 95
    ... Fourth Quarter As restated Net sales Gross proÃ't Operating income Income before income tax expense Net income Earnings per common share: Basic Diluted Dividends declared per common share Weighted average common and common equivalent shares outstanding Basic Diluted Note 20 ÃŒ Subsequent...

  • Page 96
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  • Page 97
    ... REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders PETsMART, Inc. Phoenix, Arizona We have audited the consolidated Ã'nancial statements of PETsMART, Inc. and subsidiaries (the ""Company'') as of January 30, 2005 and February 1, 2004, and for each of the three Ã'scal years...

  • Page 98
    ... at Beginning of Period Charged to Expense Deductions (In thousands) Balance at End of Period Description Valuation reserve deducted in the balance sheet from the asset to which it applies: Merchandise inventories: Lower of cost or market Fiscal 2002 Fiscal 2003 Fiscal 2004 Shrink Fiscal 2002...

  • Page 99
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  • Page 101
    ...Public Accounting Firm Deloitte & Touche LLP 2901 North Central Avenue Suite 1200 Phoenix, AZ 85012 Stockholder Inquiries PETsMART Investor Relations 19601 North 27th Avenue Phoenix, AZ 85027 (623) 587-2025 [email protected] PETsMART Common Stock The company's common stock is traded...

  • Page 102
    19 6 01 N O R T H 2 7 T H A V E N U E P H O E N I X, A Z 8 5 0 2 7 6 2 3-5 8 0- 610 0 W W W.P E T S M A R T.C O M ©2005 PETsMART Store Support Group, Inc. All rights reserved.