Petsmart 2010 Annual Report Download - page 3

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(in thousands, except gross prot and per-share amounts)
 GrossProt 29.1% 28.5% 29.5%
 EarningsPerShare 2.01 1.59 1.52
LETTER TO THE
STOCKHOLDERS
April 18, 2011
DearFellowStockholders:
In2010,wedeliveredsolidresultsaswecontinuedourjourneyofbecomingabestinclass
specialty retailer. Using the strength of our brand and leveraging customer insights, we
maintainedourfocusoninnovation,differentiationandbuildingstrategicnewpartnerships,
givingourcustomersevenmorecompellingreasonstoshopourstores.
WeexpandedourportfolioofexclusiveofferingsandpartnershipstoincludeMarthaStewart
Pets™ and GNC Pets.
™
We also introduced industry-leading ea & tick brands into our
assortment,increasedpenetrationofourinnovativeproprietarybrands,andexpandedour
selectionofchannelexclusivespecialtyfoodswiththeadditionofWellness®brandpetfood
andsnacks.Thestrengthofourcorebusiness,combinedwiththeadditionofthesestrategic
partnershipsandnewofferings,drovecomparablestoresalesgrowthof4.8%andincreased
netsalesby6.7%.Ourstrongsalesperformancecoupledwithcontinuedcostandcapital
disciplineresultedinearningspersharegrowthof26%.
Our suite of pet services offerings – grooming, pet training, PetSmart PetsHotels® and
Doggie Day CampSM–continuestobeakeydifferentiatorandanintegralpartofourstrategy
to engage our pet parents, understand their needs, and provide solutions that promote
customer loyalty.Services sales increased 7.5% to $619 million, or 10.9% of sales, with
grooming representing the largest share. The PetsHotels business is beneting from an
uptick in human travel in addition to our focus on improved operational efciencies and
costcontrols.AstheleadingspecialtyproviderofpetservicesinNorthAmerica,morepet
parentsentrusttheirpetstouswhentheyareinneedofservices.
We generated $458 million in operating cash ow and spent $125 million in capital
expenditures, adding 38 net new stores and 18 PetsHotels, ending the year with 1,187
storesand180PetsHotelsintheUnitedStatesandCanada.Weboughtback$263million
of PetSmart stock under our $400 million share purchase program. We also increased
our quarterly dividend 25% from 10 cents to 12.5 cents per share and paid $53 million
individends.
OurpartnershipwithPetSmartCharitiesdemonstratesourcommitmenttosavingthelives
of homeless pets and promoting new pet acquisition. Since 1994, more than 4.4 million
petshavebeenadoptedinaPetSmartstorethroughoneofthePetSmartCharitiesin-store
adoptioncenters.Withtherecentdeclineinpetownershiptrends,wearefocusedmorethan
everonsupportingthispartnership,andareproudtoreportthatin2010alone,morethan
403,000petswereadoptedinourstores.