PetSmart Reports Results for the First Quarter 2013

  PetSmart Reports Results for the First Quarter 2013

  Q1 Earnings up 15% to $0.98 per Share; Comp Sales of 3.5%; Total Sales up
                       5.0%; Comp Transactions up 0.8%

Business Wire

PHOENIX -- May 22, 2013

PetSmart, Inc. (NASDAQ: PETM) today reported earnings of $0.98 per share, up
15% compared to $0.85 per share in the first quarter of 2012. Net income
totaled $102 million in the first quarter of 2013, compared to $95 million in
the first quarter of 2012.

Total sales for the first quarter of 2013 increased 5.0% to $1.7 billion. The
increase in net sales was partially impacted by $2 million in unfavorable
foreign currency fluctuations. Comparable store sales, or sales in stores open
at least a year, grew 3.5%, benefitting from comparable transactions growth of
0.8%. Services sales, which are included in total sales, grew 5.8% to $192
million.

During the first quarter, the company generated $147 million in cash flows
from operating activities, spent $35 million in capital expenditures, and
repurchased $180 million of PetSmart stock. The company ended the quarter with
$324 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 focus on providing solutions
for the lifetime needs of pets has kept our pet parent customers highly
engaged with our brand, resulting in positive comparable store sales growth
and transaction growth.”

“As a reminder, the annual guidance for 2013 is for 52 weeks versus 53 weeks
in 2012. For fiscal year 2013, we anticipate comparable store sales growth of
3% - 4%, and total sales growth of 3% - 4%. We are raising our earnings per
share guidance from a previous range of $3.76 to $3.92, to our current
expectations of $3.82 to $3.94,” said Chip Molloy, Executive Vice President
and Chief Financial Officer. "For the second quarter of 2013, we are expecting
comparable store sales growth in the 3% to 4% range, and earnings per share
between $0.82 to $0.86.”

Conference call information

PetSmart management has scheduled a teleconference for 4:30 p.m. EDT on May
22, 2013 to discuss results for the first quarter 2013. 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 second 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 1613971.

A phone replay will be available through June 22, 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 1613971.

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 1,289 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. Through its in-store pet adoption
partnership with PetSmart Charities^®, PetSmart has helped save the lives of
more than 5 million pets since 1994. PetSmart Charities, Inc.and PetSmart
Charities of Canada, Inc. (“PetSmart Charities”) are independent, nonprofit
organizations that save the lives of homeless pets and reduce shelter intake
through spay/neuter efforts. In 2012, nearly 450,000 dogs and cats found homes
through the organization'sadoption centersin all PetSmart stores
andbysponsoring community adoption events. PetSmart Charitiesis the leader
ingrantingmoneyto help pets in need, with more than $28 million given
in2012throughoutNorth America.

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.

                                                            
PetSmart, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share and store data)
(Unaudited)
                                                                       
                     Thirteen Weeks Ended            Thirteen Weeks Ended
                     May 5, 2013     % of          April 29,       % of
                                       Sales         2012              Sales
                                                                       
Merchandise          $ 1,509,372       88.2  %       $ 1,439,559       88.3  %
sales
Services sales         191,577         11.2  %         181,014         11.1  %
Other revenue         9,647        0.6   %        9,320        0.6   %
                                                                       
Net sales             1,710,596    100.0 %        1,629,893    100.0 %
                                                                       
Cost of
merchandise            1,037,114       60.6  %         994,508         61.0  %
sales
Cost of                134,089         7.8   %         128,691         7.9   %
services sales
Cost of other         9,647        0.6   %        9,320        0.6   %
revenue
                                                                       
Total cost of         1,180,850    69.0  %       1,132,519    69.5  %
sales
                                                                       
Gross profit           529,746         31.0  %         497,374         30.5  %
                                                                       
Operating,
general and           362,228      21.2  %        343,023      21.0  %
administrative
expenses
                                                                       
Operating              167,518         9.8   %         154,351         9.5   %
income
                                                                       
Interest              (13,168   )   -0.8  %        (14,129   )   -0.9  %
expense, net
                                                                       
Income before
income tax
expense and
equity income          154,350         9.0   %         140,222         8.6   %
from Banfield


                                                                       
Income tax             (55,547   )     -3.2  %         (48,172   )     -3.0  %
expense
                                                                       
Equity income         3,612        0.2   %        2,633        0.2   %
from Banfield
                                                                       
Net income           $ 102,415      6.0   %       $ 94,683       5.8   %
                                                                       
Earnings per
common share:
Basic                $ 0.99                         $ 0.87      
Diluted              $ 0.98                         $ 0.85      
                                                                       
Weighted
average shares
outstanding:
Basic                  103,305                         108,930
Diluted                104,583                         111,030
                                                         
Stores open at
beginning of           1,278                           1,232
each period
Stores opened
during each            13                              14
period
Stores closed
during each           (2        )                    (5        )
period
Stores open at
end of each        1,289                   1,241        
period
                                                                       
                                                                       

                                                        
PetSmart, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except par value)
(Unaudited)
 
                        May 5,               February 3,          April 29,
                        2013                 2013                 2012
                                                                  
Assets
  Cash and cash         $ 252,988            $ 335,155            $ 268,928
  equivalents
  Short-term              7,455                9,150                22,276
  investments
  Restricted cash         71,226               71,916               71,929
  Receivables,            66,272               72,198               57,346
  net
  Merchandise             738,568              679,090              682,896
  inventories
  Deferred income         62,859               62,859               51,381
  taxes
  Prepaid
  expenses and           81,041             86,768             81,716     
  other current
  assets
                                                                  
    Total current         1,280,409            1,317,136            1,236,472
    assets
                                                                  
  Property and            972,679              985,707              1,035,759
  equipment, net
  Equity
  investment in           28,426               39,934               26,597
  Banfield
  Deferred income         100,601              102,992              79,798
  taxes
  Goodwill                43,914               44,242               44,738
  Other
  noncurrent             48,155             46,970             43,036     
  assets
                                                                  
    Total assets        $ 2,474,184         $ 2,536,981         $ 2,466,400  
                                                                  
Liabilities and
Stockholders'
Equity
  Accounts
  payable and           $ 257,628            $ 202,122            $ 246,612
  bank overdraft
  Accrued
  payroll, bonus          132,705              176,082              126,195
  and employee
  benefits
  Accrued
  occupancy               69,626               70,671               69,456
  expenses and
  deferred rents
  Current
  maturities of           63,180               61,581               55,920
  capital lease
  obligations
  Other current          246,431            244,436            177,511    
  liabilities
                                                                  
    Total current         769,570              754,892              675,694
    liabilities
                                                                  
  Capital lease           462,436              464,578              496,004
  obligations
  Deferred rents          71,565               73,855               79,582
  Other
  noncurrent             119,352            120,064            115,644    
  liabilities
                                                                  
    Total                1,422,923          1,413,389          1,366,924  
    liabilities
                                                                  
  Stockholders'
  Equity:
  Preferred
  stock; $.0001           -                    -                    -
  par value
  Common stock;
  $.0001 par              17                   17                   17
  value
  Additional              1,441,863            1,418,411            1,352,889
  paid-in capital
  Retained                1,913,209            1,827,996            1,586,499
  earnings
  Accumulated
  other                   4,510                5,506                6,706
  comprehensive
  income
  Less: Treasury         (2,308,338 )        (2,128,338 )        (1,846,635 )
  stock
                                                                  
    Total
    stockholders'        1,051,261          1,123,592          1,099,476  
    equity
                                                                  
    Total
    liabilities
    and                 $ 2,474,184         $ 2,536,981         $ 2,466,400  
    stockholders'
    equity

Contact:

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