PetSmart Reports Results for the Fourth Quarter and Fiscal Year 2012

  PetSmart Reports Results for the Fourth Quarter and Fiscal Year 2012

Q4 Earnings up 36% to $1.24 per Share; Comp Sales of 4.6%; Total Sales up 15%;
Comp Transactions up 1.2%; FY12 Earnings up 39% to $3.55 per Share; Comp Sales
            of 6.3%; Total Sales up 11%; Comp Transactions up 2.4%

Business Wire

PHOENIX -- March 6, 2013

PetSmart, Inc. (NASDAQ: PETM) today reported financial results for the fourth
quarter and fiscal year 2012, and provided guidance for 2013. The fourth
quarter and fiscal year 2012 results include an extra week in 2012 compared to
2011. The fourth quarter of fiscal year 2012 was a 14-week quarter versus the
fourth quarter of fiscal year 2011 which was a 13-week quarter. Fiscal year
2012 was a 53-week year versus fiscal year 2011 which was a 52-week year. Both
the fourth quarter and fiscal year 2012 ended on February 3, 2013. The fourth
quarter and fiscal year 2011 ended on January 29, 2012. Comparable store sales
and transactions are calculated on an equivalent basis and are versus the 14
and 53 weeks ended February 5, 2012.

For the quarter, earnings per share were up 36% to $1.24. Comparable store
sales, or sales in stores open at least a year, grew 4.6%, benefitting from
comparable transactions growth of 1.2%. Total sales for the quarter were up
15% to $1.9 billion, partially impacted by $3 million in favorable foreign
currency fluctuations. Services sales, which are included in total sales, grew
15% to $194 million.

For the year, the company delivered earnings per share of $3.55, up 39%
compared to $2.55 last year. Comparable store sales grew 6.3%, benefitting
from comparable transactions growth of 2.4%. Total sales for the year were
$6.8 billion, up 11%, including an unfavorable impact from foreign currency
fluctuations of $2 million, and services sales grew 10% to $740 million.

The impact of the extra week was $126 million in sales and $0.17 in earnings
per share.

During the year, the company generated $696 million in operating cash flow and
spent $138 million in capital expenditures. In addition, the company
repurchased $457 million of PetSmart stock during 2012, with $175 million
repurchased during the fourth quarter. The company also distributed $84
million in dividends during 2012, ending the year with $407 million in cash,
cash equivalents and restricted cash and zero borrowings on its credit
facility.

“We are pleased to report another quarter of solid earnings growth,” said Bob
Moran, Chairman and Chief Executive Officer. “Our unique portfolio of
solutions centered on our merchandise and service offerings is further
strengthened by our culture of innovation and differentiation and truly sets
us apart from the competition.”

“Guidance for 2013 will be on a GAAP basis; therefore all comparisons will be
52 weeks for fiscal year 2013 versus 53 weeks for fiscal year 2012. For 2013,
we anticipate comparable store sales growth of 2% to 4% and total sales growth
of 2% to 4%. We expect earnings per share between $3.76 to $3.92, and spending
for capital expenditures projects to be between $140 million to $150 million,”
said Chip Molloy, Executive Vice President and Chief Financial Officer. “For
the first quarter of 2013, we are expecting comparable store sales growth of
2% to 4%, and earnings per share between $0.92 to $0.98.”

Conference call information

PetSmart management has scheduled a teleconference for 4:30 p.m. EST on March
6, 2013 to discuss results for the fourth quarter and fiscal year 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 first
quarter of 2013. 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 1606485.

A phone replay will be available through April 6, 2013, 11:59 p.m. EDT, at
888-266-2081 in the United States and Canada, or at 703-925-2533 for
international callers, code 1606485.

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 52,000 associates and operates more than 1,278 pet stores in the
United States, Canada and Puerto Rico, over 196 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 nearly 5 million pets.

Forward-looking statements

This news release contains forward-looking statements concerning our
expectations for future performance, including the statements comprising our
2013 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
Consolidated Statements of Operations
(in thousands, except per share and store data)
(Unaudited)
                                                                                                                                       
                     Fourteen Weeks Ended            Thirteen Weeks Ended            Fifty-three Weeks Ended         Fifty-two Weeks Ended
                     February 3,     % of          January 29,     % of          February 3,     % of          January 29,     % of
                     2013              Sales         2012              Sales         2013              Sales         2012              Sales
                                                                                                                                       
Merchandise          $ 1,675,979       89.2  %       $ 1,460,090       89.1  %       $ 5,979,604       88.4  %       $ 5,401,731       88.4  %
sales
Services sales         193,572         10.3  %         168,479         10.3  %         740,471         11.0  %         674,859         11.0  %
Other revenue         9,615        0.5   %        9,259        0.6   %        38,162       0.6   %        36,714       0.6   %
                                                                                                                                       
Net sales             1,879,166    100.0 %        1,637,828    100.0 %        6,758,237    100.0 %        6,113,304    100.0 %
                                                                                                                                       
Cost of
merchandise            1,134,761       60.4  %         1,006,779       61.5  %         4,124,432       61.0  %         3,783,951       61.9  %
sales
Cost of                141,352         7.5   %         123,926         7.5   %         533,504         7.9   %         488,216         8.0   %
services sales
Cost of other         9,615        0.5   %        9,259        0.6   %        38,162       0.6   %        36,714       0.6   %
revenue
                                                                                                                                       
Total cost of         1,285,728    68.4  %       1,139,964    69.6  %        4,696,098    69.5  %       4,308,881    70.5  %
sales
                                                                                                                                       
Gross profit           593,438         31.6  %         497,864         30.4  %         2,062,139       30.5  %         1,804,423       29.5  %
                                                                                                                                       
Operating,
general and           372,186      19.8  %        327,900      20.0  %        1,410,922    20.9  %        1,301,304    21.3  %
administrative
expenses
                                                                                                                                       
Operating              221,252         11.8  %         169,964         10.4  %         651,217         9.6   %         503,119         8.2   %
income
                                                                                                                                       
Interest              (13,275   )   -0.7  %        (14,102   )   -0.9  %        (54,329   )   -0.8  %        (56,842   )   -0.9  %
expense, net
                                                                                                                                       
Income before
income tax
expense
                       207,977         11.1  %         155,862         9.5   %         596,888         8.8   %         446,277         7.3   %
and equity
income from
Banfield
                                                                                                                                       
Income tax             (78,489   )     -4.2  %         (56,604   )     -3.5  %         (223,329  )     -3.3  %         (166,960  )     -2.7  %
expense
                                                                                                                                       
Equity income         4,522        0.2   %        2,742        0.2   %        15,970       0.2   %        10,926       0.2   %
from Banfield
                                                                                                                                       
Net income           $ 134,010      7.1   %       $ 102,000      6.2   %       $ 389,529      5.7   %       $ 290,243      4.7   %
                                                                                                                                       
Earnings per
common share:
Basic                $ 1.26                         $ 0.92                         $ 3.61                         $ 2.59      
Diluted              $ 1.24                         $ 0.91                         $ 3.55                         $ 2.55      
                                                                                                                                       
Weighted
average shares
outstanding:
Basic                  106,470                         110,364                         107,819                         111,909
Diluted                108,071                         112,100                         109,611                         113,993
                                                                                                           
Stores open at
beginning of           1,269                           1,210                           1,232                           1,187
each period
Stores opened
during each            11                              25                              60                              53
period
Stores closed
during each           (2        )                    (3        )                    (14       )                    (8        )
period
Stores open at
end of each        1,278                   1,232                   1,278                   1,232        
period
                                                                                                                                       
                                                                                                                                       

                                                          
PetSmart, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except par value)
(Unaudited)
                                                                
                                             February 3,        January 29,
                                             2013               2012
                                                                
Assets
Cash and cash equivalents                    $ 335,155          $ 342,892
Short-term investments                         9,150              20,311
Restricted cash                                71,916             70,189
Receivables, net                               72,198             53,899
Merchandise inventories                        679,090            644,864
Deferred income taxes                          62,859             51,381
Prepaid expenses and other current            86,768           80,352     
assets
                                                                
Total current assets                           1,317,136          1,263,888
                                                                
Property and equipment, net                    985,707            1,067,028
Equity investment in Banfield                  39,934             37,824
Deferred income taxes                          102,992            93,485
Goodwill                                       44,242             44,084
Other noncurrent assets                       46,970           37,775     
                                                                
Total assets                                 $ 2,536,981       $ 2,544,084  
                                                                
Liabilities and Stockholders' Equity
Accounts payable and bank overdraft          $ 202,122          $ 199,177
Accrued payroll, bonus and employee            176,082            158,079
benefits
Accrued occupancy expenses and                 70,671             68,584
deferred rents
Current maturities of capital lease            61,581             54,219
obligations
Other current liabilities                     244,436          201,247    
                                                                
Total current liabilities                      754,892            681,306
                                                                
Capital lease obligations                      464,578            505,273
Deferred rents                                 73,855             81,403
Other noncurrent liabilities                  120,064          122,273    
                                                                
Total liabilities                             1,413,389        1,390,255  
                                                                
Stockholders' Equity:
Preferred stock; $.0001 par value              -                  -
Common stock; $.0001 par value                 17                 16
Additional paid-in capital                     1,418,411          1,312,996
Retained earnings                              1,827,996          1,507,054
Accumulated other comprehensive income         5,506              5,490
Less: Treasury stock                          (2,128,338 )      (1,671,727 )
                                                                
Total stockholders' equity                    1,123,592        1,153,829  
                                                                
Total liabilities and stockholders'          $ 2,536,981       $ 2,544,084  
equity

Contact:

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