UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 19, 2014

 

 

PetSmart, Inc.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware   0-21888   94-3024325

(State or Other Jurisdiction

of Incorporation)

  

(Commission

File Number)

  

(I.R.S. Employer

Identification Number)

19601 North 27th Avenue, Phoenix, Arizona 85027

(Address of Principal Executive Offices) (Zip Code)

(623) 580-6100

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed from last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 2.02. Results of Operations and Financial Condition.

On August 19, 2014, PetSmart, Inc. issued a press release announcing its results for the second quarter ended August 3, 2014, entitled “PETSMART ANNOUNCES SECOND QUARTER 2014 RESULTS.” A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Report on Form 8-K, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing with the Securities and Exchange Commission made by PetSmart, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 8.01. Other Events

On August 19, 2014, PetSmart, Inc. also issued a press release regarding its determination to explore strategic alternatives for maximizing shareholder value. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

 

Exhibit

No.

   

Description

99.1    Press Release entitled “PetSmart Announces Second Quarter 2014 Results,” dated August 19, 2014.
99.2    Press Release entitled “PetSmart to Explore Strategic Alternatives For Maximizing Shareholder Value,” dated August 19, 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    PetSmart, Inc.
Dated: August 19, 2014     By:  

/s/ J. Dale Brunk

     

J. Dale Brunk

Vice President, Deputy General Counsel, and Assistant Secretary

Exhibit Index

 

Exhibit

No.

   

Description

99.1    Press Release entitled “PetSmart Announces Second Quarter 2014 Results,” dated August 19, 2014.
99.2    Press Release entitled “PetSmart to Explore Strategic Alternatives For Maximizing Shareholder Value,” dated August 19, 2014.
EX-99.1

Exhibit 99.1

 

LOGO

PetSmart Announces Second Quarter 2014 Results

Earnings up 10.1% to $0.98 per Share; Total Sales up 1.4%

Affirms Guidance for Fiscal Year 2014

Company to Acquire Pet360; Leading Online Pet Specialty Retailer

Outlines Cost Reduction Program and Other Performance Improvement Initiatives

PHOENIX – August 19, 2014 – PetSmart, Inc. (NASDAQ: PETM) today announced financial results for the second quarter of 2014, and affirmed guidance for fiscal year 2014. The Company also announced a definitive agreement to acquire Pet360, the premier online pure play pet specialty retailer, for $130 million with the possibility of additional performance-based payments totaling up to $30 million by the end of 2016.

Second Quarter Results

Earnings of $0.98 per share were up 10.1% compared to $0.89 per share in the second quarter of 2013. Net income increased 5.1% to $98.1 million, compared to $93.4 million in the prior year period.

Net sales for the second quarter of 2014 increased 1.4% to $1.7 billion. Comparable store sales, or sales in stores open at least one year, including online sales, decreased 0.5%, with comparable transactions decreasing 2.6%. Services sales, which are included in net sales, grew 4.7% to $214 million.

In the second quarter, the company generated $92 million in cash flows from operating activities, invested $36 million in capital expenditures, distributed $19 million in dividends, and made no purchases of PetSmart stock. The company ended the quarter with $323 million in cash, cash equivalents and restricted cash, and it had no borrowings against its credit facility.

Said David Lenhardt, President and Chief Executive Officer, “While we face many of the same headwinds affecting other retailers, we continue to deliver extraordinary value to our customers and achieve strong earnings and cash flows. We are focused on leveraging our competitive strengths, including superior customer focus and loyalty, and capitalizing on the continued growth of the specialty channel. We have already begun implementing a broad range of performance improvement initiatives following the Board’s detailed review of our business over the last several months.”

Acquisition of Pet360

Commenting on the Pet360 transaction, Lenhardt said: “We are delighted to announce our planned acquisition of Pet360, the most comprehensive online resource for pet parents. This transaction is a smart and efficient way to make PetSmart a leader in the online retail space. As discussed previously, although online sales are still a relatively small part of the pet products industry, we expect them to become a more relevant source of revenue in the future. Combining PetSmart’s unparalleled strengths in traditional outlets with Pet360’s established digital footprint will perfectly position PetSmart to capitalize on this evolution and enhance our ability to serve pet parents across all distribution channels.”

Pet360 is an integrated media company dedicated to connecting pet parents with the information, products and advice they need to raise happy, healthy pets. The Pet360 network is comprised of more than nine of the top pet websites and reaches over 12 million pet parents per month, making Pet360 the most comprehensive source for online pet information and products in the U.S. Its family of premium brands includes Pet360.com – the most comprehensive online resource for pet parents; petMD.com – the world’s largest digital resource for pet health information; PetFoodDirect.com – the leading online retailer of pet food, medications and supplies; and BlogPaws – the largest professional network of pet bloggers and social media enthusiasts. The company is headquartered outside Philadelphia, PA.

Combining Pet360’s family of e-commerce websites, digital media programs and content sites, with PetSmart’s existing web platform and store network will immediately allow PetSmart to provide customers a rich omni-channel information and shopping experience. It also brings industry leading talent to PetSmart, along with cost savings opportunities through increased scale, merchandise assortment and valuable web platform and fulfillment capabilities.

The transaction is expected to close in September, subject to customary closing conditions, including receipt of regulatory approvals.

Performance Improvement Initiatives

PetSmart has the platform, strategy and resources to maintain and grow its competitive advantage and drive enhanced shareholder value creation going forward. Following the Board’s comprehensive business review begun last Spring, the Company has developed a multi-faceted plan aimed at driving growth and profitability in the future. The plan includes a variety of performance improvement initiatives that will allow it to deliver near and long-term results and continue to deliver strong returns for shareholders.

To that end the Company has embarked on a broad cost reduction program that will fundamentally restructure the cost base of the Company. The program will target all areas of the business, including, in order of magnitude, cost of goods sold, logistics, sourcing, store operating costs and overhead. The Company expects to realize these savings before the end of fiscal 2015 and will provide additional details about the program and targets next quarter.

At the same time, the Company is steadfastly focused on ensuring that PetSmart is well positioned for the long-term and to that end is focused on the following growth initiatives:

 

  •   Strengthening our leadership position as the destination for pet food: Broadening our offering of grocery store and mass brands to drive new customers into stores; evolving our channel-exclusive offering to take advantage of ongoing industry innovation; and introducing focused marketing designed to highlight our breadth of assortment and value;

 

  •   Growing our proprietary and exclusive products and services: Introducing additional proprietary and exclusive brands aimed at keeping customers in our stores and building greater loyalty; and growing our services business through continued investments in people and technology which enhance the customer experience;

 

  •   Further developing omni-channel capabilities: Aggressively competing for customers online and taking advantage of PetSmart’s unrivaled scale and distribution infrastructure to provide customers a 360-degree shopping experience; and

 

  •   Developing a more personalized customer experience: Building a compelling, personalized, and connected customer experience, through strengthened CRM capabilities and an enhanced loyalty program, which reinforces the strength of our brand and highlights our unique value proposition.

Said Lenhardt, “Even with today’s separate announcement on exploring strategic alternatives for the Company, our team remains 100% committed to driving the business forward for the benefit of our customers and shareholders. Everything we are doing is aimed at continuing to build unparalled customer loyalty through innovation and creating a best-in-class, more personalized customer experience. We are also instituting more effective pricing and promotion strategies, improving cost and margin discipline and better leveraging our unrivaled scale and distribution infrastructure.”

Fiscal Year 2014 Guidance

Based on the Company’s year-to-date results and outlook for the remainder of the year in light of the consumer environment and competitive market, the Company affirmed its fiscal year 2014 outlook. This guidance does not include the impact of the Pet360 acquisition or the benefits or costs associated with the cost improvement initiatives outlined above,

 

  •   Comparable store sales relatively flat

 

  •   Net sales growth in the low-single digits

 

  •   Earnings per share between $4.29 to $4.39

 

  •   Operating cash flow between $600 to $625 million

Third Quarter 2014 Guidance

 

  •   Comparable store sales growth flat to slightly down

 

  •   Earnings per share of $0.93 to $0.97

Conference Call Information

PetSmart management has scheduled a teleconference for 10:00 a.m. EDT on August 20, 2014 to discuss results for the second quarter 2014. This teleconference will be webcast live for all investors at www.petm.com. The webcast will be available until the company announces results for the third quarter of 2014. In addition, you can listen to the call live by dialing 866-814-1933 (within the United States and Canada) or 703-639-1365 (for international callers), code 1642743.

A phone replay will be available through September 20, 2014, 11:59 p.m. EDT, at 888-266-2081 in the United States and Canada, or at 703-925-2533 for international callers, code 1642743. The announcement will also be archived at www.petm.com.

About PetSmart

PetSmart, Inc. (NASDAQ: PETM) is the largest specialty pet retailer of services and solutions for the lifetime needs of pets. The company employs approximately 53,000 associates and operates approximately 1,352 pet stores in the United States, Canada and Puerto Rico, 200 in-store PetSmart® PetsHotel® dog and cat boarding facilities and is a leading online provider of pet supplies and pet care information (http://www.petsmart.com). PetSmart provides a broad range of competitively priced pet food and pet products; and offers dog training, pet grooming, pet boarding, PetSmart Doggie Day Camp SM day care services and pet adoption services. Through its in-store pet adoption partnership with PetSmart Charities® and PetSmart Charities® of Canada, PetSmart has helped save the lives of more than 5.7 million pets since 1994. PetSmart Charities, Inc. and PetSmart Charities of Canada (collectively “PetSmart Charities”) are independent, nonprofit organizations that save the lives of homeless pets and reduce shelter intake through spay and neuter efforts. In 2013, nearly 440,000 dogs and cats found homes through PetSmart Charities’ adoption centers in all PetSmart stores and by sponsoring community adoption events. PetSmart Charities is the leader in granting money to help pets in need, with more than $34 million given in 2013 throughout North America.

Forward-looking statements

This news release contains forward-looking statements concerning our expectations for future performance, including the statements comprising our 2014 guidance and the statement regarding the exploration of strategic alternatives. These “forward-looking statements” are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: uncertain outcome, impact, effects and results of PetSmart’s exploration of strategic alternatives; changes in general economic conditions; conditions affecting customer transactions and average ticket including, but not limited to, weather conditions or other seasonal events; our ability to compete effectively; disruption of our supply chain; our ability to effectively manage our growth and operations; changes in our cost structure; and changes in the legal or regulatory environment. There can also be no assurance that the exploration of strategic alternatives will result in a transaction or any other assurance regarding the likelihood that the process will result in any transaction or other strategic change or the timing thereof. Undue reliance should not be placed on such forward-looking statements as they speak only as of the date hereof, and we undertake no obligation to update these statements to reflect subsequent events or circumstances except as may be required by law. For additional information on these and other factors that arise when investing in PetSmart, please see our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K.

PetSmart, Inc.

April Lenhard, 623-587-2025

Investor Relations

or

Sard Verbinnen & Co

Brandy Bergman / Bryan Locke / Margaret Popper

212-687-8080

PetSmart, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except per share and store data)

(Unaudited)

 

     Thirteen Weeks
Ended		     Thirteen Weeks
Ended		     Twenty-Six Weeks
Ended		     Twenty-Six Weeks
Ended		  
     August 3,
2014		     % of
Sales		     August 4,
2013		     % of
Sales		     August 3,
2014		     % of
Sales		     August 4,
2013		     % of
Sales		  

Merchandise sales

    $ 1,505,003        87.0 %    $ 1,492,457        87.5 %    $ 3,024,009        87.4 %    $ 3,001,829        87.9 % 

Services sales

      214,279        12.4 %      204,707        12.0 %      414,434        12.0 %      396,284        11.6 % 

Other revenue

      10,657        0.6 %      8,833        0.5 %      20,628        0.6 %      18,480        0.5 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net sales

      1,729,939        100.0 %      1,705,997        100.0 %      3,459,071        100.0 %      3,416,593        100.0 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cost of merchandise sales

      1,062,446        61.4 %      1,040,814        61.0 %      2,114,090        61.1 %      2,077,928        60.8 % 

Cost of services sales

      141,719        8.2 %      141,130        8.3 %      278,398        8.1 %      275,219        8.1 % 

Cost of other revenue

      10,657        0.6 %      8,833        0.5 %      20,628        0.6 %      18,480        0.5 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total cost of sales

      1,214,822        70.2 %      1,190,777        69.8 %      2,413,116        69.8 %      2,371,627        69.4 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

      515,117        29.8 %      515,220        30.2 %      1,045,955        30.2 %      1,044,966        30.6 % 

Operating, general, and administrative expenses

      352,165        20.4 %      358,670        21.0 %      711,245        20.6 %      720,898        21.1 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income

      162,952        9.4 %      156,550        9.2 %      334,710        9.7 %      324,068        9.5 % 

Interest expense, net

      (12,890 )      -0.7 %      (12,828 )      -0.8 %      (26,073 )      -0.8 %      (25,996 )      -0.8 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income before income tax expense and equity income from Banfield

      150,062        8.7 %      143,722        8.4 %      308,637        8.9 %      298,072        8.7 % 

Income tax expense

      (58,037 )      -3.4 %      (54,493 )      -3.2 %      (116,629 )      -3.4 %      (110,040 )      -3.2 % 

Equity income from Banfield

      6,091        0.4 %      4,139        0.2 %      9,874        0.3 %      7,751        0.2 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income

    $ 98,116        5.7 %    $ 93,368        5.5 %    $ 201,882        5.8 %    $ 195,783        5.7 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Earnings per common share:

                 

Basic

    $ 0.99        $ 0.90        $ 2.03        $ 1.89     
  

 

 

      

 

 

      

 

 

      

 

 

    

Diluted

    $ 0.98        $ 0.89        $ 2.02        $ 1.87     
  

 

 

      

 

 

      

 

 

      

 

 

    

Weighted average shares outstanding:

                 

Basic

      99,226          103,474          99,215          103,390     

Diluted

      99,689                104,512                99,766                104,547           

Stores open at beginning of each period

      1,340          1,289          1,333          1,278       

Stores opened during each period

      13          12          20          25       

Stores closed during each period

      (1 )        —            (1 )        (2 )     
    

 

 

      

 

 

      

 

 

      

 

 

      

Stores open at end of each period

      1,352                1,301                1,352                1,301           

PetSmart, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except par value)

(Unaudited)

 

     August 3,
2014		     February 2,
2014		     August 4,
2013		  

Assets

       

Cash and cash equivalents

    $ 251,757      $ 285,622      $ 281,554   

Short-term investments

      —          —          3,087   

Restricted cash

      71,226        71,226        71,226   

Receivables, net

      79,446        72,685        69,118   

Merchandise inventories

      793,364        740,302        770,268   

Deferred income taxes

      71,940        71,945        62,859   

Prepaid expenses and other current assets

      107,156        76,463        115,319   
  

 

 

    

 

 

    

 

 

  

Total current assets

      1,374,889        1,318,243        1,373,431   

Property and equipment, net

      954,109        952,955        951,499   

Equity investment in Banfield

      31,851        33,577        29,678   

Deferred income taxes

      103,011        110,408        98,162   

Goodwill

      41,659        41,140        43,031   

Other noncurrent assets

      60,228        65,645        54,105   
  

 

 

    

 

 

    

 

 

  

Total assets

    $ 2,565,747      $ 2,521,968      $ 2,549,906   
  

 

 

    

 

 

    

 

 

  

Liabilities and Stockholders’ Equity

       

Accounts payable and bank overdraft

    $ 246,995      $ 255,251      $ 248,467   

Accrued payroll, bonus, and employee benefits

      146,513        160,008        163,494   

Accrued occupancy expenses and deferred rents

      73,624        81,867        72,829   

Current maturities of capital lease obligations

      70,072        66,887        64,449   

Other current liabilities

      250,756        230,332        221,150   
  

 

 

    

 

 

    

 

 

  

Total current liabilities

      787,960        794,345        770,389   

Capital lease obligations

      449,873        451,597        454,673   

Deferred rents

      61,528        65,932        68,856   

Other noncurrent liabilities

      106,590        116,312        108,649   
  

 

 

    

 

 

    

 

 

  

Total liabilities

      1,405,951        1,428,186        1,402,567   
  

 

 

    

 

 

    

 

 

  

Stockholders’ Equity:

       

Preferred stock; $.0001 par value

      —          —          —     

Common stock; $.0001 par value

      17        17        17   

Additional paid-in capital

      1,547,068        1,515,333        1,487,860   

Retained earnings

      2,335,983        2,173,005        1,989,401   

Accumulated other comprehensive (loss) income

      (858 )      (2,159 )      2,475   

Less: Treasury stock

      (2,722,414 )      (2,592,414 )      (2,332,414 ) 
  

 

 

    

 

 

    

 

 

  

Total stockholders’ equity

      1,159,796        1,093,782        1,147,339   
  

 

 

    

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 2,565,747      $ 2,521,968      $ 2,549,906   
  

 

 

    

 

 

    

 

 

  
EX-99.2

Exhibit 99.2

PetSmart Exploring Strategic Alternatives to Maximize Shareholder Value

PHOENIX – August 19, 2014 – PetSmart, Inc. (NASDAQ: PETM), the world’s largest specialty retailer of pet supplies and the foremost authority for pet parents seeking services and solutions for the lifetime needs of their pets, today announced that based on a thorough business review that began last spring, the Board of Directors has determined that it will explore strategic alternatives for the Company to maximize value for shareholders, including a possible sale of the Company. The Board has been working with JP Morgan Securities LLC and Wachtell, Lipton, Rosen & Katz to assist in the process.

Said Gregory P. Josefowicz, Chairman, “PetSmart has delivered superb returns for our investors over a long period of time, with our shares outperforming the S&P 500 in seven of the last 10 fiscal years, and five out of the last six. Indeed, 5-year total shareholder return as of our fiscal year ended February 2, 2014 was 259.3% versus 140.6% for the S&P 500. For the same period, we delivered EPS CAGR of 21%, with 272 basis points of operating income margin expansion, and we returned nearly $2 billion to shareholders through dividends and share repurchases. We are extremely proud of what our PetSmart team has accomplished and, despite recent headwinds affecting PetSmart and many retailers, firmly believe the Company is very well positioned for superior future performance.”

He continued: “Notwithstanding our confidence in the Company’s future prospects, following a detailed Board review of the Company over the last several months, including many constructive conversations with a wide range of shareholders, we have decided to explore options to maximize shareholder value, including a potential sale of the Company.”

“Whatever the outcome of the process, we are as committed as ever to continuing to meet the needs of our customers and their pets, attracting and retaining world class talent, and driving sales and margins,” said Josefowicz. “We are not providing a timetable for our process, nor do we intend to comment further or update the market until it is complete.”

David K. Lenhardt, President and Chief Executive Officer, said, “The entire management team is dedicated to continuing to deliver value for our customers and our shareholders. We are focused on pursuing our strategic plans, including this afternoon’s announcement that we have entered into a definitive agreement to acquire Pet360 which will allow PetSmart to enhance its omni-channel capabilities and provide customers a unique and leading 360-degree shopping experience. This afternoon’s announcement about exploring alternatives will not distract the management team from continuing to pursue a broad range of performance improvement initiatives already underway.”

PetSmart Background

PetSmart, Inc. (NASDAQ: PETM) is the largest specialty pet retailer of services and solutions for the lifetime needs of pets. Since opening its first store in 1987 in Phoenix, PetSmart has had a long and distinguished history of industry leadership and innovation, including creating the original national chain of pet superstores, combining unique value-added services (including in-store pet training, boarding, day-care, grooming, veterinary care and adoption services) with the broadest and deepest merchandise assortment to create an unrivaled experience for pet parents in a single box.

The company today employs approximately 53,000 highly trained associates and operates approximately 1,352 pet stores in the United States, Canada and Puerto Rico, 200 in-store PetSmart® PetsHotel® dog and cat boarding facilities, and full-service veterinary hospitals in 856 stores.

The Company also has best in class CRM capabilities and a rich database of over 35 million active customers (who accounted for approximately 90% of fiscal 2013 sales). It is the leading online provider of pet supplies and pet care information (http://www.petsmart.com).

Over the past five fiscal years, the Company has averaged 4.2% annual same-store sales growth while delivering an EPS CAGR of 21% and 272 basis points of operating income margin expansion. It has also generated substantial excess free cash flow and prudently returned capital to our shareholders (nearly $2.0 billion over the past five years) through regular dividends and share repurchases. Additionally, it has doubled its return on invested capital from 18.1% in 2009 to 36.2% in 2013.

Through its in-store pet adoption partnership with PetSmart Charities® and PetSmart Charities® of Canada, PetSmart has helped save the lives of more than 5.7 million pets since 1994. PetSmart Charities, Inc. and PetSmart Charities of Canada (collectively “PetSmart Charities”) are independent, nonprofit organizations that save the lives of homeless pets and reduce shelter intake through spay and neuter efforts. In 2013, nearly 440,000 dogs and cats found homes through PetSmart Charities’ adoption centers in all PetSmart stores and by sponsoring community adoption events. PetSmart Charities is the leader in granting money to help pets in need, with more than $34 million given in 2013 throughout North America.

Forward-looking statements

This news release contains forward-looking statements concerning our expectations for future performance, including the statements regarding the exploration of strategic alternatives, whether those strategic alternatives could maximize stockholder value and the statements comprising our 2014 guidance. These “forward-looking statements” are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: uncertain outcome, impact, effects and results of PetSmart’s exploration of strategic alternatives; changes in general economic conditions; conditions affecting customer transactions and average ticket including, but not limited to, weather conditions or other seasonal events; our ability to compete effectively; disruption of our supply chain; our ability to effectively manage our growth and operations; changes in our cost structure; and changes in the legal or regulatory environment. There can also be no assurance that the exploration of strategic alternatives will result in a transaction or any other assurance regarding the likelihood that the process will result in any transaction or other strategic change or the timing thereof. Undue reliance should not be placed on such forward-looking statements as they speak only as of the date hereof, and we undertake no obligation to update these statements to reflect subsequent events or circumstances except as may be required by law. For additional information on these and other factors that arise when investing in PetSmart, please see our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K.

PetSmart, Inc.

April Lenhard, 623-587-2025

Investor Relations

or

Sard Verbinnen & Co

Brandy Bergman / Bryan Locke / Margaret Popper

212-687-8080