Breaking News

Kerry Says No Truce Accord for Gaza, Talks to Continue 
Tweet TWEET

PetSmart Reports Results for the Third Quarter 2012

  PetSmart Reports Results for the Third Quarter 2012

Q3 Earnings up 50% to $0.75 per Share; Comp Sales of 6.5%; Total Sales up 9%;
  Comp Transactions up 2.3%; Chip Molloy, Executive Vice President and Chief
              Financial Officer, Will Be Resigning in Early 2014

Business Wire

PHOENIX -- November 14, 2012

PetSmart, Inc. (NASDAQ: PETM) today reported earnings of $0.75 per share, up
50% compared to $0.50 per share in the third quarter of 2011. Net income
totaled $82 million in the third quarter of 2012, compared to $56 million in
the third quarter of 2011.

Total sales for the third quarter of 2012 increased 9% to $1.6 billion. The
increase in net sales was partially impacted by $1 million in favorable
foreign currency fluctuations. Comparable store sales, or sales in stores open
at least a year, grew 6.5%, benefitting from comparable transactions growth of
2.3%. Services sales, which are included in total sales, grew 8% to $175
million.

During the third quarter, the company generated $133 million in operating cash
flow, spent $40 million in capital expenditures, distributed $18 million in
dividends, and repurchased $60 million of PetSmart stock. The company ended
the quarter with $370 million in cash, cash equivalents and restricted cash
and zero borrowings on its credit facility.

“Our performance in the third quarter was due to strength across all three
merchandising categories, as well as across services,” said Bob Moran,
Chairman and Chief Executive Officer. “We are executing well, and continue to
define the pet specialty customer experience.”

“As a reminder, 2012 contains a 53^rd week. For all of 2012, we anticipate
comparable store sales growth of 6% to 7%, and total sales growth in the 10%
to 11% range. We are raising our earnings per share guidance from a previous
range of $3.30 to $3.40, to our current expectations of $3.47 to $3.51. The
impact of the extra week is estimated to be $120 million in sales and $0.16 in
EPS,” said Chip Molloy, Executive Vice President and Chief Financial Officer.
“For the fourth quarter of 2012, we are expecting comparable store sales
growth in the mid-single digit range, and earnings per share between $1.16 and
$1.20, including the impact of the extra week.”

The company also announced that Chip Molloy, Executive Vice President and
Chief Financial Officer, will be resigning in early 2014, to allow him to
spend more time with his family, who now live in the southeast. Mr. Molloy
will continue as Executive Vice President and Chief Financial Officer until
June 2013, and will remain with the company as a special advisor until March
2014. “Chip has been an invaluable member of our management team over the past
five years, and has been instrumental in designing a framework and creating a
culture within the company that consistently pushes us to always consider our
shareholders,” said Mr. Moran. “It is this foundation of focus and discipline
that has contributed to our success over the past four years, and will remain
a key pillar of our strategy well into the future.”

Conference call information

PetSmart management has scheduled a teleconference for 4:30 p.m. EST on
November 14, 2012 to discuss results for the third quarter 2012. 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 fourth
quarter of 2012. 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 1596112.

A phone replay will be available through December 14, 2012, 11:59 p.m. EST, at
888-266-2081 in the United States and Canada, or at 703-925-2533 for
international callers, code 1596112.

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 50,000 associates and operates more than 1,269 pet stores in the
United States, Canada and Puerto Rico, over 195 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. Since 1994, PetSmart Charities,
Inc., an independent 501(c)(3) non-profit animal welfare organization and the
largest funder of animal welfare efforts in North America, has provided more
than $165 million in grants and programs benefiting animal welfare
organizations. Through its in-store pet adoption partnership with PetSmart
Charities^®, PetSmart has helped save the lives of more than 5 million pets.

Forward-looking statements

This news release contains forward-looking statements concerning our
expectations for future performance, including the statements comprising our
2012 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: 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. 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.

Follow PetSmart on Twitter www.twitter.com/PetSmartTLC

Find PetSmart on Facebook www.facebook.com/PetSmart


PetSmart, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share and store data)
(Unaudited)
                                                                                                                  
                     Thirteen Weeks Ended            Thirteen Weeks Ended            Thirty-Nine Weeks Ended         Thirty-Nine Weeks Ended
                     October 28,     % of          October 30,     % of          October 28,     % of          October 30,     % of
                     2012              Sales         2011              Sales         2012              Sales         2011              Sales
                                                                                                                                       
Merchandise          $ 1,444,683       88.7  %       $ 1,326,819       88.6  %       $ 4,303,625       88.2  %       $ 3,941,641       88.1  %
sales
Services sales         175,018         10.7  %         161,339         10.8  %         546,899         11.2  %         506,380         11.3  %
Other revenue         9,810        0.6   %        9,399        0.6   %        28,547       0.6   %        27,455       0.6   %
                                                                                                                                       
Net sales             1,629,511    100.0 %        1,497,557    100.0 %        4,879,071    100.0 %        4,475,476    100.0 %
                                                                                                                                       
Cost of
merchandise            1,008,278       61.9  %         940,960         62.8  %         2,989,671       61.3  %         2,777,172       62.1  %
sales
Cost of                128,911         7.9   %         119,038         8.0   %         392,152         8.0   %         364,290         8.1   %
services sales
Cost of other         9,810        0.6   %        9,399        0.6   %        28,547       0.6   %        27,455       0.6   %
revenue
                                                                                                                                       
Total cost of         1,146,999    70.4  %       1,069,397    71.4  %        3,410,370    69.9  %       3,168,917    70.8  %
sales
                                                                                                                                       
Gross profit           482,512         29.6  %         428,160         28.6  %         1,468,701       30.1  %         1,306,559       29.2  %
                                                                                                                                       
Operating,
general and           342,958      21.0  %        326,964      21.8  %        1,038,736    21.3  %        973,404      21.7  %
administrative
expenses
                                                                                                                                       
Operating              139,554         8.6   %         101,196         6.8   %         429,965         8.8   %         333,155         7.4   %
income
                                                                                                                                       
Interest              (13,375   )   -0.8  %        (14,038   )   -0.9  %        (41,054   )   -0.8  %        (42,740   )   -1.0  %
expense, net
                                                                                                                                       
Income before
income tax
expense and            126,179         7.8   %         87,158          5.8   %         388,911         8.0   %         290,415         6.5   %
equity income
from Banfield
                                                                                                                                       
Income tax             (48,335   )     -3.0  %         (33,826   )     -2.3  %         (144,840  )     -3.0  %         (110,356  )     -2.5  %
expense
                                                                                                                                       
Equity income         4,472        0.3   %        2,826        0.2   %        11,448       0.2   %        8,184        0.2   %
from Banfield
                                                                                                                                       
Net income           $ 82,316       5.1   %       $ 56,158       3.7   %       $ 255,519      5.2   %       $ 188,243      4.2   %
                                                                                                                                       
Earnings per
common share:
Basic                $ 0.76                         $ 0.50                         $ 2.36                         $ 1.67      
Diluted              $ 0.75                         $ 0.50                         $ 2.32                         $ 1.65      
                                                                                                                                       
Weighted
average shares
outstanding:
Basic                  107,719                         111,330                         108,303                         112,425
Diluted                109,333                         113,081                         110,117                         114,399
                                                                                                           
Stores open at
beginning of           1,249                           1,197                           1,232                           1,187
each period
Stores opened
during each            24                              15                              49                              28
period
Stores closed
during each           (4        )                    (2        )                    (12       )                    (5        )
period
Stores open at
end of each        1,269                   1,210                   1,269                   1,210        
period
                                                                                                                                       
                                                                                                                                       


PetSmart, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except par value)
(Unaudited)
                                                      
                      October 28,          January 29,          October 30,
                      2012                 2012                 2011
                                                                
Assets
Cash and cash         $ 298,090            $ 342,892            $ 271,252
equivalents
Short-term              13,862               20,311               19,555
investments
Restricted cash         71,916               70,189               61,439
Receivables,            49,811               53,899               65,709
net
Merchandise             765,831              644,864              707,997
inventories
Deferred income         51,381               51,381               44,999
taxes
Prepaid
expenses and           111,164            80,352             88,908     
other current
assets
                                                                
Total current           1,362,055            1,263,888            1,259,859
assets
                                                                
Property and            997,361              1,067,028            1,064,993
equipment, net
Equity
investment in           35,412               37,824               35,082
Banfield
Deferred income         85,308               93,485               95,426
taxes
Goodwill                44,248               44,084               44,266
Other
noncurrent             44,623             37,775             34,336     
assets
                                                                
Total assets          $ 2,569,007         $ 2,544,084         $ 2,533,962  
                                                                
Liabilities and
Stockholders'
Equity
Accounts
payable and           $ 266,708            $ 199,177            $ 228,431
bank overdraft
Accrued
payroll, bonus          161,030              158,079              149,032
and employee
benefits
Accrued
occupancy               74,106               68,584               72,563
expenses and
deferred rents
Current
maturities of           60,023               54,219               52,446
capital lease
obligations
Other current          181,381            201,247            169,733    
liabilities
                                                                             
Total current           743,248              681,306              672,205
liabilities
                                                                
Capital lease           475,552              505,273              511,984
obligations
Deferred rents          75,948               81,403               82,565
Other
noncurrent             117,248            122,273            121,068    
liabilities
                                                                
Total                  1,411,996          1,390,255          1,387,822  
liabilities
                                                                
Stockholders'
Equity:
Preferred
stock; $.0001           -                    -                    -
par value
Common stock;
$.0001 par              17                   16                   16
value
Additional              1,393,158            1,312,996            1,290,152
paid-in capital
Retained                1,711,574            1,507,054            1,420,471
earnings
Accumulated
other                   5,600                5,490                5,731
comprehensive
income
Less: Treasury         (1,953,338 )        (1,671,727 )        (1,570,230 )
stock
                                                                
Total
stockholders'          1,157,011          1,153,829          1,146,140  
equity
                                                                
Total
liabilities and       $ 2,569,007         $ 2,544,084         $ 2,533,962  
stockholders'
equity

Contact:

PetSmart, Inc.
Investor Relations, 623-587-2025