Petsmart 2010 Annual Report Download - page 9

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 are based on
management’s current expectations and beliefs about future events or future financial performance. We have
attempted to identify forward-looking statements by words such as: “anticipate,” “believe,” “can,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” or other com-
parable terminology. These statements are not guarantees of future performance or results and involve known and
unknown risks, uncertainties and other factors, including the risks outlined under “Item 1A. Risk Factors”
contained in Part I of this Annual Report, that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements.
Although we believe the expectations and beliefs reflected in the forward-looking statements are reasonable,
such statements speak only as of the date this Annual Report on Form 10-K is filed, and we disclaim any intent or
obligation to update any of the forward-looking statements after such date, whether as a result of new information,
actual results, future events or otherwise, unless required by law.
Our fiscal year consists of the 52 or 53 weeks ending on the Sunday nearest January 31 of the following year. The
2010 fiscal year ended on January 30, 2011, and was a 52-week year. The 2009 and 2008 fiscal years were also 52-
week years. Unless otherwise specified, all references in this Annual Report on Form 10-K to years are to fiscal years.
Item 1. Business
General
We opened our first stores in 1987 and have become the leading specialty provider of products, services and
solutions for the lifetime needs of pets. We have identified a large group of pet owners we call “pet parents,” who are
passionately committed to their pets and consider their pets members of the family. Our strategy is to attract and
keep these customers by becoming the preferred provider for the Total Lifetime Care
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of pets.
We opened 38 net new stores in 2010 and at the end of the year operated 1,187 retail stores in North America.
Square footage in 2010 increased 0.7 million to 26.6 million compared to 25.9 million in 2009. Our stores typically
range in size from 12,000 to 27,500 square feet and carry a broad selection of high-quality pet products at everyday
low prices. We offer approximately 10,000 distinct items, including nationally recognized brand names, as well as
an extensive selection of proprietary brands, including both exclusive and private label products, across a range of
product categories.
We complement our strong product assortment with a differentiated selection of pet services, including
grooming, training, boarding and day camp. All our stores offer complete pet training services and virtually all our
stores feature pet styling salons that provide high-quality grooming services. As of January 30, 2011, we offered pet
boarding at 180 of our stores through our PetSmart PetsHotels», or “PetsHotels.”
As of January 30, 2011, there were full-service veterinary hospitals in 768 of our stores. MMI Holdings, Inc.,
through a wholly owned subsidiary, Medical Management International, Inc., collectively referred to as “Banfield,”
operated 757 of the hospitals under the registered trade name of “Banfield, The Pet Hospital.” The remaining 11
hospitals are operated by other third parties in Canada.
Our PetPerks»program enables us to understand the needs of our customers and target offers directly to them.
We also reach customers through PetSmart.com», our pet e-commerce site, as well as mypetsmart.com, our pet
community site and selected social networking sites.
The Pet Industry
The pet industry serves a large and growing market. The American Pet Products Association, or “APPA,”
estimated the calendar year 2010 market at approximately $47.7 billion, an increase of more than 180% since
calendar year 1994. Based on the 2009/2010 APPA National Pet Owners Survey, approximately 62% of households
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