Petsmart 2004 Annual Report Download - page 23

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 relate to future events or our future Ñnancial performance. We have attempted to identify forward-
looking statements by terminology including: ""anticipate,'' ""believe,'' ""can,'' ""continue,'' ""could,'' ""estimate,''
""expect,'' ""intend,'' ""may,'' ""plan,'' ""potential,'' ""predict,'' ""should,'' or ""will'' or the negative of these terms
or other comparable terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks outlined under ""Business Risks'' contained in Part I
of this Annual Report that may cause our actual results, levels of activity, performance or achievements to be
materially diÅerent from any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.
Although we believe the expectations reÖected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the
date this Annual Report on Form 10-K is Ñled, and we do not intend to update any of the forward-looking
statements after the date this Annual Report on Form 10-K is Ñled to conform these statements to actual
results, unless required by law.
Our Ñscal year consists of the 52 or 53 weeks ending on the Sunday nearest January 31 of the following
year. Unless otherwise speciÑed, all references in this Annual Report on Form 10-K to years are to Ñscal years.
The 2004, 2003 and 2002 Ñscal years were 52-week years.
Item 1. Business
General
PETsMART was incorporated in Delaware on August 11, 1986, and we opened our Ñrst two stores in
March 1987. In Ñscal 2004, we generated sales of $3.4 billion, making PETsMART the leading provider of
products, services and solutions for the lifetime needs of pets in North America. We opened 83 net new stores
in Ñscal 2004 and, as of January 30, 2005, operated 726 retail stores in North America. Our stores typically
range in size from 19,000 to 27,000 square feet. Our stores carry a broad and deep selection of high quality pet
supplies at everyday low prices. We oÅer more than 12,900 distinct items, including nationally recognized
brand names, as well as an extensive selection of private brands across a range of product categories.
We complement our extensive product assortment with a selection of value-added pet services, including
grooming, pet training, boarding and day camp. Virtually all our stores oÅer complete pet training services and
feature pet styling salons that provide high-quality grooming services. Through our strategic relationship with
BanÑeld, The Pet Hospital, operating under the registered trademark of BanÑeld, we make full-service
veterinary care available in approximately 430 of our stores.
We also reach customers through our direct marketing channels, including PETsMART.com, one of the
Internet's most popular pet e-commerce sites, as well as an e-commerce site dedicated to equine products and
two major branded catalogs.
We have identiÑed a large group of pet owners we call ""pet parents,'' who are passionately committed to
their pets and consider their pets family members. Our strategy is to attract and keep these customers by
becoming the preferred provider of Total Lifetime Care
SM
for pets. As part of this strategy, we focus on driving
eÇciencies in our stores, on our processes and our systems, on growing our pet services business and on
delighting our customers by 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 Ñscal 2003, we completed the reformatting of our stores to create a specialty store environment by
organizing the store by pet species, placing a greater emphasis on pet services and eliminating most of the high
steel shelving, resulting in a brighter and more open store. Our store format, combined with our enhanced
distribution and information systems capabilities, has reduced inventories, made the store easier to shop and
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