2. Summary
Rating: Hold
Target Price $ 38-$42
Current Price $ 40.95
Current & Forecast Metrics
Current P/E 19.71
P/E Range 20-22
Forecast P/E 21
Div Yield 1.4%
Market Cap 4.22B
EPS $1.79
Forecast EPS $3.6
Adjusted Beta .87
• Largest Pet Specialty One-Stop Shop
• High quality differentiation strategy
• Strategy shift from location expansion
to merchandising and service growth

3. Company
Description
Founded in 1986, based in Phoenix, AZ
• Operate 1,172 stores (2010)
• Over 10,000 products
• Business Segments
 Training
 Grooming
 Boarding
 Veterinary (Banfield)
• Petsmart’s Charity
“We want to be a part of the solution not a part of the problem. “
-- Michael Manson

4. $0.0
$20.0
$40.0
$60.0
1994 1999 2004 2009
Industry Spending (bil)
• Sector: Consumer Discretionary
• Average annual growth for the industry is 6.5%
• Growth Expectations
 New store unit growth 2-3%
 Comparable store sales 2-4%
• Revenue Drivers
 Consumer spending
 Pet ownership
 Humanization of pets
Risks
Industry
Spending
Valuation
Industry
Company
Overview
Financial
Analysis

5. Risks
Industry
Spending
Consumer
Risk
Changes in
Consumer
Preferences
Locations
Competitor
Risk
Pet Product
Selection
Prices
Business Risk
Product Recalls
Vendor
Relationships
Market
Risk
Home
Ownership
Unemployment
Rate
• Recessionary conditions• Increased competition
• E-commerce
Valuation
Industry
Company
Overview
Financial
Analysis

6. • 14% total market share
• Exclusive product contracts
 Martha Stewart
 GNC
• Competitors
 Big box retailers (WalMart)
 Grocery stores
 Petco
Valuation
Industry
Company
Overview
Financial
Analysis
14%
46%
26%
10%
4%
Total Market Share
PetSmart
Mass
Grocery
Other Pet Specialty
Customer
Competitive
Positioning
Net Sales and
Service Sales

7. Primary Attributes PetSmart Mass &
Grocery
Independent Other Pet
Specialty
Broad Assortment X X
Engaged In-Store
Experience With Your
Pet
X
Knowledgeable
Associates
X X
Customer Loyalty
Program
X X X
Veterinary Services X
Grooming Services X X X
Boarding and Day Camp
Services
X X
Training Services X X
Trip Consolidation X
Valuation
Industry
Company
Overview
Financial
Analysis
Customer
Competitive
Positioning
Net Sales and
Service Sales

8. Customer
Competitive
Positioning
Valuation
Industry
Company
Overview
Financial
Analysis
% of PetSmart
Customers
% of Total Sales
Average Transactions
Per Year
Average Annual Spend
per Customer
PetPerks Members
Mart
40%
5%
1.2
$18
36%
Smart
50%
45%
4.1*
$136
57%
Smart
with Heart
10%
50%
17.1
$757
79%
1. Cross selling products
2. Promoting premium pet food brands
3. Promoting & offering services
Net Sales and
Service Sales

9. $-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
2009 2010 2011 2012 2013 2014
Net Sales (Dollar Breakdown)
Services sales
Merchandise sales
Valuation
Industry
Company
Overview
Financial
Analysis
Customer
Competitive
Positioning
Net Sales and
Service Sales

10. Valuation
Industry
Company
Overview
Financial
Analysis
75%
80%
85%
90%
95%
100%
2009 2010 2011 2012 2013 2014
Net Sales (Percent Breakdown)
Merchandise sales Services sales
This increment is mainly due
to the High Profit Margin of
Service Sales.
Customer
Competitive
Positioning
Net Sales and
Service Sales

11. 1%
11%
52%
34%
2%
88%
Revenue Breakdown
Services
Pet Food,
Treats and
Litter
Pet Supplies
Live Pets and
Other
Merchandise
Sales
Valuation
Industry
Company
Overview
Financial
Analysis
Customer
Competitive
Positioning
Net Sales and
Service Sales

12. `
15%
85%
Grooming & Boarding Services
PetSmart
Mass
• $3.4 Billion spent in 2009
Valuation
Industry
Company
Overview
Financial
Analysis
Customer
Competitive
Positioning
Net Sales and
Service Sales

13. `
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
$-
$200
$400
$600
$800
$1,000
$1,200
2006 2007 2008 2009 2010 2011 2012 2013 2014
Service Sales
Training
PetsHotel
Grooming
Service Sales Percent
11%
16%
Service Sales
Valuation
Industry
Company
Overview
Financial
Analysis
Customer
Competitive
Positioning
Net Sales and
Service Sales

14. `
Valuation
Industry
Company
Overview
Financial
Analysis
Customer
Competitive
Positioning
Net Sales and
Service Sales
1x
2x
7.5x
11.1x
Merchandise Grooming Training Boarding
Individual Margin

15. `
Valuation
Industry
Company
Overview
Financial
Analysis
1x
1.5x
3.5x
5.4x
Dog Product Only Dog Plus Grooming Dog Plus Grooming &
Training
Dog Plus Grooming,
Training & Boarding
Gross Margin
Customer
Competitive
Positioning
Net Sales and
Service Sales

16.  Historically capital expenditures 4.5%-6.5% of sales
 Approximately $300m
 8% - 9% historical store growth
 Looking forward capital expenditures 2.1% of sales
 Approximately $120-$130m
 2% - 3% new store growth
 Focused on remodeling and expanding current stores
Valuation
Industry
Company
Overview
Financial
Analysis
0
20
40
60
80
100
120
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
New Store Openings
38
100
EarningsCapital
Expenditures
Cash Flow

17. • Steady revenue stream
 2010 revenues $5.6b up from $5.3b in 2009
(5.5% increase)
 Projected to increase 7-8% annually
• Projected earnings
 Current EPS: $1.59
 5 year forecast: $3.36
 55% upside
Valuation
Industry
Company
Overview
Financial
Analysis
EarningsCapital
Expenditures
Cash Flow
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
2009 2010 2011 2012 2013 2014
Net income
Earning Per Share

18. Cash flow expected to increase ~ $500m
• Decreased spending on capital expenditures
• Increased store efficiencies
• Expanding sales growth
Valuation
Industry
Company
Overview
Financial
Analysis
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Operating Cash Flows
Capital Expenditure
Free cash flow
% of Operating CF
EarningsCapital
Expenditures
Cash Flow

19. • Fair Value
 Current Price: $40.95 (Mar. 31, 2011)
 Target Price: $38-$42 per share
• Used three valuation models
 Free cash flow to the firm
 Enterprise value multiple
 Three-Stage dividend discount
Valuation
Industry
Company
Overview
Financial
Analysis
FCFM EV/EBITDAInvestment
Summary
DDM

20. • Investors required equity return: 9.2%
• Discounted at WACC: 8.8%
• Free cash flows increase 16% Y/Y
• Target Price: $40.34
$-
$100
$200
$300
$400
$500
$600
Free Cash Flow (thousands)
Valuation
Industry
Company
Overview
Financial
Analysis
FCFM EV/EBITDAInvestment
Summary
DDM

21. • Current EV/EBITDA multiple: 9.1
 Steady historical growth
 Forecast future multiple: 10.0
• Closest stock return correlation
 Dicks Sporting Goods (73%)
 Home Depot (67%)
• Target Price: $38 - $40
Home Depot Dick’s Sporting Goods PetSmart PetSmart (e)
9.2 10.4 9.1 10.0Valuation
Industry
Company
Overview
Financial
Analysis
FCFM EV/EBITDAInvestment
Summary
DDM

22. • Initial dividend $.08 in 2005; rose to $.33 in
2009
• Expected growth:
 22% for 5 years
 16% until 2019
 5.5% long term
• Target Price: $36.34
$-
$0.50
$1.00
$1.50
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Dividends Per Share
FCFM EV/EBITDAInvestment
Summary
DDM
Valuation
Industry
Company
Overview
Financial
Analysis

23. • Significant change in business model
 Slower unit growth
 Improved cash flows
 Expanding products and services
 Higher profit margins
Executive
Summary
Rating: Hold
Target Price $ 38-$42
Current Price $ 40.95

24. Income
Statement
Stmt of Cash
Flow
Balance Sheet Correlation
CLAYM
WACC
DCFM
FCFF
Unemployment
Rate
Consumer
Spending
New Opening
Stores
Net Sales
Trend
Exclusive
Product
Total owned
Pets
Pet Ownership
Product
Margin
Management
Industry
Spending
Humanization
Homes with
Pets
Qualification
Service marginNet Sales
Competitive
Positioning
Revenue
Breakdown
Operating CFs
Risks
Customers
Sales/Sq.Ft
US Inflation
Financials & Valuations Data & Quantitive Company Related
Net Income
Breakdown
Net Sales
Breakdown
Earning per
share
Service sales
forecast
Dividends per
share

25. Net Sales
Net Sales
Net Sales Growth Rate in the past 10 yrs
10.67%

26. Correlation
(Price)
Stock Price 1 year 3 year 5 year
Coach 83.09% 88.70% 80.55%
Foot Locker 82.19% 77.66% 51.24%
Nordstrom, Inc. 34.55% 81.80% 70.22%
The Pep Boys-Manny, More & Jack 65.67% 72.58% 66.42%
Macy's 84.38% 68.55% 55.24%
Target 69.21% 79.89% 74.83%
Brinker International, Inc 52.07% 67.33% 59.50%
RadioShack Corp. 24.22% 83.49% 73.65%
Home Depot, Inc 47.27% 87.09% 67.25%
Big 5 -17.60% 73.84% 60.79%
Dicks Sporting Goods 83.12% 73.75% 61.61%

27. Correlation
(Return)
Stock Return 1 year 3 year 5 year
Abercrombie & Fitch Co. 57.94% 56.79% 48.61%
Coach 55.91% 55.65% 49.77%
Foot Locker 65.91% 50.24% 46.13%
Nordstrom, Inc. 59.30% 58.01% 53.16%
O'Reilly Automotive 50.69% 55.92% 50.41%
J.C.Penney Company 54.43% 58.28% 52.88%
Macy's 55.48% 58.52% 52.91%
Target 55.77% 56.93% 52.07%
BestBuy 59.01% 60.41% 51.15%
Home Depot, Inc 54.24% 60.47% 55.71%
Staples 55.10% 60.63% 54.89%
Dicks Sporting Goods 60.14% 58.08% 51.55%

28. CLAYM
Model Description
Model Solution

29. WACC
Computation

30. DCFM
Three Stage
Discounted Cash Flow Model: Three Stage Growth
Model
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Dividends Per
Share 0.33 0.450 0.549 0.670 0.817 0.997 1.156 1.341 1.556 1.805 2.094
Present Value of
Dividends 0.33 0.414 0.464 0.521 0.584 0.655 0.699 0.746 0.795 0.848 0.905
Terminal Value 29.38 67.97
Growth Rate: 2010 to 2014 0.22
Second Stage Growth 2015 to 2019 0.16
Terminal Growth Rate after 2014 0.055
Cost of Equity 0.0875
Intrinsic Value of Equity $ 36.34

31. FCFF
Free Cash Flow to the Firm Valuation
Cash Flows From Operating Activities 2009 2010 2011 2012 2013 2014
Net income $ 198,325.00 $ 182,258.82 $216,534.50 $256,241.81 $309,943.90 $ 370,783.44
Depreciation $ 165,454.00 $ 165,170.43 $165,143.83 $164,867.93 $164,895.43 $ 165,325.43
Receivables $ (3,623.00) $ (1,771.94) $ (4,071.35) $ (4,664.02) $ (5,155.12) $ (5,623.92)
Inventories $ 20,622.00 $ (31,169.00) $ (17,255.00) $ (15,283.00) $ (15,776.00) $ (17,748.00)
Deferred income taxes $ (8,582.00) $ (6,506.33) $ (3,265.24) $ (3,740.56) $ (4,134.42) $ (4,510.40)
Prepaid expenses $ 30,025.00 $ (18,802.76) $ (5,763.92) $ (6,602.98) $ (7,298.24) $ (7,961.92)
Capital Leases (current) $ 189.19 $ 190.14 $ 191.09 $ 192.05 $ 193.01 $ 193.78
Accounts payable $ 17,491.00 $ 21,181.85 $ 17,588.68 $ 20,149.08 $ 22,270.68 $ 24,295.92
Accrued liabilities $ 24,325.00 $ 61,371.78 $ 17,315.23 $ 19,835.83 $ 21,924.45 $ 23,918.20
Other current liabilities $ 39,650.00 $ (22,885.54) $ 9,354.34 $ 10,716.06 $ 11,844.41 $ 12,921.51
Net cash provided by operating
activities $ 483,876.20 $ 349,037.45 $395,772.16 $441,712.20 $498,708.09 $ 561,594.04
Less: Total Capital Expenditures $ 112,920.00 $ 135,361.00 $137,020.00 $135,361.00 $135,361.00 $ 138,561.00
Free Cash Flows to the Firm $ 370,956.20 $ 213,676.45 $258,752.16 $306,351.20 $363,347.09 $ 423,033.04
Free Cash Flow to the Firm Valuation ( 4% Long-term Growth)
2009 2010 2011 2012 2013 2014
WACC 8.75%
Terminal Growth Rate 4.0%
Present Value of Free Cash Flows $ 370,956.20 $196,481.98 $218,784.28 $238,186.84 $259,768.17 $278,102.31
Terminal Value $4,001,913.57 $6,087,477.81
Value of the Firm $5,564,193.36
Less: Value of Debt $ 533,635.00
Value of Equity $5,030,558.36
Shares Outstanding 124,701
Intrinsic Price per Share of Equity $ 40.34

32. EV/EBITDA
PetSmart Enterprise Multiple Valuation
EBITDA Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Stock 2010 2011 2012 2013 2014
Net Income $ 182,258.82 $ 216,534.50 $ 256,241.81 $ 309,943.90 $ 370,783.44
Interest $ 58,993.35 $ 59,288.32 $ 59,584.76 $ 59,882.68 $ 60,182.09
Taxes $ 115,030.26 $ 136,831.44 $ 162,088.89 $ 196,280.22 $ 235,021.85
Depreciation $ 165,170.43 $ 165,143.83 $ 164,867.93 $ 164,895.43 $ 165,325.43
Amortization $ - $ - $ - $ - $ -
EBITDA $ 521,452.86 $ 577,798.09 $ 642,783.39 $ 731,002.22 $ 831,312.82

33. EV/EBITDA
(Cont.)
Enterprise Value Multiple 9.00
WACC 8.75%
EV Forecast $4,693,075.71 $5,200,182.79 $5,785,050.54 $6,579,020.01 $7,481,815.34
Cash $ 322,456.84 $ 346,766.83 $ 374,615.64 $ 405,396.81 $ 438,977.14
Value of Debt $ (536,303.18) $ (538,984.69) $ (541,679.61) $ (544,388.01) $ (547,109.95)
Value of Equity $4,479,229.38 $5,007,964.92 $5,617,986.57 $6,440,028.81 $7,373,682.52
Shares Outstanding 119,712.96 114,924.44 110,327.46 110,327.46 110,327.46
Future Equity Prices $ 37.42 $ 43.58 $ 50.92 $ 58.37 $ 66.83
Intrinsic Price/Share $37.42 $36.85 $39.59 $41.73 $43.94
Enterprise Value Multiple 10.00
WACC 8.75%
EV Forecast $5,214,528.57 $5,777,980.88 $6,427,833.93 $7,310,022.23 $8,313,128.15
Cash $ 322,456.84 $ 346,766.83 $ 374,615.64 $ 405,396.81 $ 438,977.14
Value of Debt $ (536,303.18) $ (538,984.69) $ (541,679.61) $ (544,388.01) $ (547,109.95)
Value of Equity $5,000,682.23 $5,585,763.01 $6,260,769.96 $7,171,031.03 $8,204,995.34
Shares Outstanding 119,712.96 114,924.44 110,327.46 110,327.46 110,327.46
Future Equity Prices $ 41.77 $ 48.60 $ 56.75 $ 65.00 $ 74.37
Intrinsic Price/Share $38.41 $41.10 $44.12 $46.47 $48.89

34. Income Statement
PetSmart, Inc.
Pro Forma Income Statement
USD in thousands except per share data.
Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
% of Sales 2009 2010 2011 2012 2013 2014
Column1 Column2 Column3 Column4 Column5 Column6 Column7 Column8
Merchandise sales $ 4,761,039 $ 4,962,874 $ 5,310,275 $ 5,681,995 $ 6,079,734 $ 6,505,316
Services sales 575,353 617,474 690,775 800,999 935,950 1,091,500
Net sales 100.0% $ 5,336,392 $ 5,580,348 $ 6,001,050 $ 6,482,994 $ 7,015,684 $ 7,596,816
Cost of merchandise sales 71.5% 3,402,021 3,546,243 3,770,295 4,011,488 4,255,814 4,514,689
Cost of services sales 72.2% $ 415,154 $ 445,816 $ 493,213 $ 562,301 $ 644,869 $ 738,946
Total cost of sales 69.8% 3,817,175 3,992,059 4,263,508 4,573,790 4,900,683 5,253,635
Gross profit 30.2% $ 1,519,217 $ 1,588,289 $ 1,737,541 $ 1,909,204 $ 2,115,001 $ 2,343,181
Total operating expenses 22.7% 1,150,138 1,264,342 1,359,660 1,468,855 1,589,546 1,721,214
Operating income (EBIT) $ 369,079 $ 323,947 $ 377,881 $ 440,350 $ 525,454 $ 621,967
Interest Expense 59,748 58,993 59,288 59,585 59,883 60,182
Other income (expense) 0.5% $ 29,996 $ 32,257 $ 34,848 $ 37,711 $ 40,835
Income before income taxes (EBT) 7.0% 309,331 294,949 350,850 415,613 503,283 602,620
Provision for income taxes 2.6% $ 117,554 $ 115,030 $ 136,831 $ 162,089 $ 196,280 $ 235,022
Other income 0.0% 6,548 2,340 2,516 2,718 2,942 3,185
Net income $ 198,325 $ 182,259 $ 216,535 $ 256,242 $ 309,944 $ 370,783
Dividends 41,151 53,871 63,094 73,895 90,152 109,986
Retained Earnings $ 157,174 $ 128,388 $ 153,441 $ 182,347 $ 219,792 $ 260,798
Shares Outstanding $ 124,701 $ 119,713 $ 114,924 $ 110,327 $ 110,327 $ 110,327
Earning Per Share 1.59 1.52 1.88 2.32 2.81 3.36
Dividends Per Share $0.33 $0.45 $0.55 $0.67 $0.82 $1.00

35. Balance Sheet
(Asset)
Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Assets 2009 2010 2011 2012 2013 2014
Current assets
Cash and cash equivalents $ 308,360.00 $ 322,456.84 $ 346,766.83 $ 374,615.64 $ 405,396.81 $ 438,977.14
Restricted cash $ 48,172.00 $ 50,374.21 $ 54,171.91 $ 58,522.46 $ 63,331.09 $ 68,577.01
Receivables $ 52,232.00 $ 54,003.94 $ 58,075.30 $ 62,739.32 $ 67,894.44 $ 73,518.36
Inventories $ 563,389.00 $ 594,558.00 $ 611,813.00 $ 627,096.00 $ 642,872.00 $ 660,620.00
Deferred income taxes $ 36,805.00 $ 43,311.33 $ 46,576.57 $ 50,317.13 $ 54,451.56 $ 58,961.95
Prepaid expenses & other current
assets $ 57,652.00 $ 76,454.76 $ 82,218.67 $ 88,821.65 $ 96,119.89 $ 104,081.80
Total current assets $ 1,066,610.00 $ 1,141,159.08 $ 1,199,622.28 $ 1,262,112.20 $ 1,330,065.78 $ 1,404,736.26
Non-current assets:
Property, plant and equipment
Property and equipment, at cost $ 2,342,979.00 $ 2,478,340.00 $ 2,615,360.00 $ 2,750,721.00 $ 2,886,082.00 $ 3,024,643.00
Accumulated Depreciation
$
(1,141,122.00)
$
(1,306,292.43)
$
(1,471,436.26)
$
(1,636,304.19)
$
(1,801,199.61)
$
(1,966,525.04)
Equity and other investments $ 32,486.00 $ 32,486.00 $ 32,486.00 $ 32,486.00 $ 32,486.00 $ 32,486.00
Goodwill $ 42,200.00 $ 42,200.00 $ 42,200.00 $ 42,200.00 $ 42,200.00 $ 42,200.00
Deferred income taxes $ 94,901.00 $ 119,365.62 $ 128,364.58 $ 138,673.53 $ 150,067.97 $ 162,498.58
Other long-term assets $ 23,932.00 $ 25,604.69 $ 26,916.46 $ 28,318.57 $ 29,843.27 $ 31,518.69
Total non-current assets $ 1,395,376.00 $ 1,391,703.88 $ 1,373,890.78 $ 1,356,094.91 $ 1,339,479.62 $ 1,326,821.22
Total assets $ 2,461,986.00 $ 2,532,862.97 $ 2,573,513.06 $ 2,618,207.11 $ 2,669,545.41 $ 2,731,557.48

36. Balance Sheet
(Liability & S.E)
Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
2009 2010 2011 2012 2013 2014
Liabilities and stockholders' equity
Liabilities
Current liabilities
Capital leases $ 37,839.00 $ 38,028.20 $ 38,218.34 $ 38,409.43 $ 38,601.47 $ 38,794.48
Accounts payable $ 212,121.00 $ 233,302.85 $ 250,891.52 $ 271,040.60 $ 293,311.28 $ 317,607.20
Accrued liabilities $ 168,304.00 $ 229,675.78 $ 246,991.02 $ 266,826.85 $ 288,751.30 $ 312,669.50
Other current liabilities $ 146,965.00 $ 124,079.46 $ 133,433.80 $ 144,149.86 $ 155,994.27 $ 168,915.78
Total current liabilities $ 565,229.00 $ 625,086.29 $ 669,534.67 $ 720,426.73 $ 776,658.32 $ 837,986.95
Non-current liabilities
Capital leases $ 533,635.00 $ 536,303.18 $ 538,984.69 $ 541,679.61 $ 544,388.01 $ 547,109.95
Other long-term liabilities $ 190,407.00 $ 166,905.05 $ 179,488.00 $ 193,902.67 $ 209,835.14 $ 227,216.46
Total non-current liabilities $ 724,042.00 $ 703,208.23 $ 718,472.69 $ 735,582.29 $ 754,223.15 $ 774,326.41
Total liabilities $ 1,289,271.00 $ 1,328,294.51 $ 1,388,007.37 $ 1,456,009.02 $ 1,530,881.47 $ 1,612,313.36
Stockholders' equity
Common stock $ 16.00 $ 16.00 $ 16.00 $ 16.00 $ 16.00 $ 16.00
Additional paid-in capital $ 1,148,228.00 $ 1,205,639.40 $ 1,265,921.37 $ 1,329,217.44 $ 1,395,678.31 $ 1,465,462.23
Retained earnings $ 1,093,708.00 $ 1,222,095.99 $ 1,375,536.97 $ 1,557,883.66 $ 1,777,675.50 $ 2,038,473.42
Treasury stock $(1,071,606.00) $(1,225,188.38) $(1,458,125.28) $(1,727,248.83) $(2,037,227.13) $(2,387,437.64)
Accumulated other comprehensive income $ 2,369.00 $ 2,005.44 $ 2,156.63 $ 2,329.83 $ 2,521.26 $ 2,730.11
Total stockholders' equity $ 1,172,715.00 $ 1,204,568.45 $ 1,185,505.69 $ 1,162,198.09 $ 1,138,663.94 $ 1,119,244.12
Total liabilities and stockholders' equity $ 2,461,986.00 $ 2,532,862.96 $ 2,573,513.06 $ 2,618,207.11 $ 2,669,545.41 $ 2,731,557.48

37. Statement of Cash Flow
Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
2009 2010 2011 2012 2013 2014
Cash Flows From Operating Activities
Net income $ 198,325.00 $ 182,258.82 $ 216,534.50 $ 256,241.81 $ 309,943.90 $ 370,783.44
Depreciation $ 165,454.00 $ 165,170.43 $ 165,143.83 $ 164,867.93 $ 164,895.43 $ 165,325.43
Changes in Receivables $ (3,623.00) $ (1,771.94) $ (4,071.35) $ (4,664.02) $ (5,155.12) $ (5,623.92)
Changes in Inventories $ 20,622.00 $ (31,169.00) $ (17,255.00) $ (15,283.00) $ (15,776.00) $ (17,748.00)
Changes in Deferred income taxes $ (8,582.00) $ (6,506.33) $ (3,265.24) $ (3,740.56) $ (4,134.42) $ (4,510.40)
Changes in Prepaid expenses $ 30,025.00 $ (18,802.76) $ (5,763.92) $ (6,602.98) $ (7,298.24) $ (7,961.92)
Changes in Capital Leases (current) $ (20,125.00) $ 189.19 $ 190.14 $ 191.09 $ 192.05 $ 193.01
Changes in Accounts payable $ 17,491.00 $ 21,181.85 $ 17,588.68 $ 20,149.08 $ 22,270.68 $ 24,295.92
Changes in Accrued liabilities $ 24,325.00 $ 61,371.78 $ 17,315.23 $ 19,835.83 $ 21,924.45 $ 23,918.20
Changes in Other current liabilities** $ 39,650.00 $ 32,323.65 $ 65,838.60 $ 69,661.59 $ 73,496.65 $ 77,459.51
Net cash provided by operating activities $ 463,562.00 $ 404,245.70 $ 452,255.47 $ 500,656.77 $ 560,359.37 $ 626,131.27
Cash Flows From Investing Activities
Purchases of property, plant, and equipment $ (65,066.00) $(135,361.00) $(137,020.00) $(135,361.00) $(135,361.00) $(138,561.00)
Changes in Deferred Income Taxes $ (1,773.00) $ (24,464.62) $ (8,998.96) $ (10,308.95) $ (11,394.43) $ (12,430.61)
Changes in Other Comprehensive Income $ 5,083.00 $ (363.56) $ 151.19 $ 173.20 $ 191.44 $ 208.84
Purchase (Sale) of Other Long-term Assets $ 24,869.00 $ (1,672.69) $ (1,311.76) $ (1,402.11) $ (1,524.70) $ (1,675.41)
Net cash used for investing activities $ (36,887.00) $(161,861.87) $(147,179.54) $(146,898.87) $(148,088.70) $(152,458.18)
Cash Flows From Financing Activities
Issuance (Payment) of Capitalized Leases $ (20,125.00) $ 2,668.17 $ 2,681.52 $ 2,694.92 $ 2,708.40 $ 2,721.94
Changes in Other Long-term Liabilities $ 8,807.00 $ (23,501.95) $ 12,582.95 $ 14,414.67 $ 15,932.47 $ 17,381.32
Repurchases of treasury stock $(164,783.00) $(153,582.38) $(232,936.90) $(269,123.55) $(309,978.30) $(350,210.51)
Payment of Cash Dividends $ (41,151.33) $ (53,870.83) $ (63,093.52) $ (73,895.13) $ (90,152.06) $(109,985.51)
Net cash provided by (used for) financing activities $(217,252.33) $(228,286.99) $(280,765.95) $(325,909.09) $(381,489.49) $(440,092.76)
Net change in cash $ 209,422.67 $ 14,096.84 $ 24,309.99 $ 27,848.82 $ 30,781.17 $ 33,580.33
Cash at beginning of period $ 126,314.00 $ 308,360.00 $ 322,456.84 $ 346,766.83 $ 374,615.64 $ 405,396.81
Cash at end of period $ 43,827.00 $ 322,456.84 $ 346,766.83 $ 374,615.64 $ 405,396.81 $ 438,977.14
Net Change in Cash $ 82,487.00 $ 14,096.84 $ 24,309.98 $ 27,848.82 $ 30,781.17 $ 33,580.32

38. Quarterly
Unemployment Rate
Source: Bureau of Labor Statistics

39. New Opening
Stores
0
20
40
60
80
100
120
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
New Store Openings
38
93

40. Pet Ownership
Pet ownership is down*
Decreased home ownership
High Unemployment
Empty Nesters
62% of U.S. households own a pet*
52% of adults age 62 and older own pets *
58% own more than two pets
10% own six pets or more
People age 65 and over
Increasing Discretionary income **
5.8% increase in Real Median Income (2009)**
21% estimated growth in Animal Care and Services between 2008-2018.***
*The APPA’s 2009/2010 National Pet Owner Survey
** “Income, Poverty, and Health Coverage in the United States”, U.S. Census Bureau’s 2009
***2010-2011 Occupational Outlook Handbook, Animal Care and Service Workers section

41. Home with Pets
45.6
38.2
13.3
6 5.3 4.7 3.9
0.7
0
5
10
15
20
25
30
35
40
45
50
MillionsofHomes
Pet Type
Homes with Pets

42. Total Owned Pets
0
20
40
60
80
100
120
140
160
180
200
MillionsofPets
Total Owned Pets

43. Industry Spending
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0 1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
RevenueinBillions
Industry Spending

44. Industry Spending
38%
23%
27%
5%
7%
Industry Spending by Category
Food
Supplies
Medical Care
Animal Purchases
Services

45. Net Sales Trend
Total Revenue

46. Net Sales Trend
0
2
4
6
8
10
12
0
50
100
150
200
250
300
2009 2010 2011 2012 2013 2014
DollarsperSq/ft
Trends per Sq/ft
Net Sales
Cost of Sales
Net Income

47. Product Margin
Classification Available Example Margin (as a multiple)
1 Grocery Brand Anywhere Pedigree 1
2 Bridge Brand Anywhere Iams 1.4
3 Premium
Pet Specialty
Stores Science Diet 1.8
4 Rx
PetSmart
Exclusive Royal Canin 1.8
5 Super Premium Pet Specialty Blue Buffalo 2.1

48. Management
Qualifications
Executive Chairman Philip L. Francis
CEO PetSmart - 1998 to 2009
CEO J. Sainsbury plc. subsidiary, Shaw’s Supermarkets
VP of Roundy’s (wholesale grocery distribution company)
CEO Robert F. Moran
PetSmart’s COO
President of North American PetSmart store operations
President Toys ‘R’ Us, Ltd., Canada
CEO of Sears de Mexico
CFO of Galerias Preciados, a Spanish department store chain.
CFO Chip Molloy
CFO of Retail Stores Circuit City, Inc
Corporate planning at Capital One Financial
Private equity with AGL Capital Investments
Consulting with Deloitte Consulting.

49. Management
Interview with Co-Founder Michael Manson
PetSmart empowers employees:
Store managers given the responsibility and authority to make changes
PetSmart provides training classes for associates
CEO Francis and Mr. Moran entered management during financial distress
PetSmart approaching failure
Stock price had plummeted
Significant changes required for recovery
Management returned PetSmart to
profitability

50. Exclusive Products
Authority Brand
Rx Pet Food
Only retailer to offer Rx pet food because of veterinary restrictions.
Exclusive Products
Exclusive Relationships
Martha Stewart PETS Collection
GNC – Dietary Pet Supplements
GNC Executive Vice President Tom Dowd, “the new pet vitamins represent a true
consumer-driven innovation.”
Fisher-Price Pet Toys

51. Safety
Child food and toy standards used
Pet Safety Products:
Pet harnesses,
Portable carriers,
Belt systems for vehicle
transportation
Holistic pet health
Organic food
Supplements
Humanization
Humanization is: Treating pets as family members legally, emotionally, financially
88% of pets are considered family.
Legal Rights
25% of pet owners legally provide for pets
(2007)
“Pet Protection Agreement”
“Pet Trust”
Last Will and Testament
Tax Breaks proposed in HAPPY Act
(The Humanity and Pets Partnered Through the Years Act)
Medical Rights
AVMA lobbying Congress for:
Pre-Tax Pet Benefits
Pets allowed on employer benefits

52. Consumer Spending
Spending Up
Consumers are not cutting back on pet spending
Pet product retailers are top retail industry performers
Growing Market
6.5% annual growth from 1994 to 2010
Since 2007,
Pet spending growth has slowed about 1% to 2% annually
Industry is still growing at 5% year over year
Decreased Spending Power
Increased pet food costs in 2008

53. Risks
Consumer
Risk
Changes in
Consumer
Preferences
Locations
Competitor
Risk
Pet Product
Selection
Prices
Business Risk
Product Recalls
Vendor
Relationships
Market
Risk
Home
Ownership
Unemployment
Rate

54. Operation CFs
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Operating Cash Flows
Capital Expenditure
Free cash flow
% of Operating CF

55. Revenue
Breakdown
1%
11%
52%
34%
2%
88%
Revenue Breakdown
Services
Pet Food,
Treats and
Litter
Pet Supplies
Live Pets and
Other
Merchandise
Sales

56. Customers
% of PetSmart
Customers
% of Total Sales
Average Transactions
Per Year
Average Annual Spend
per Customer
PetPerks Members
Mart
40%
5%
1.2
$18
36%
Smart
50%
45%
4.1*
$136
57%
Smart with
Heart
10%
50%
17.1
$757
79%

57. Gross Margin
1x
1.5x
3.5x
5.4x
Dog Product Only Dog Plus Grooming Dog Plus Grooming &
Training
Dog Plus Grooming,
Training & Boarding
Gross Margin

58. Margin
1x
2x
7.5x
11.1x
Merchandise Grooming Training Boarding
Individual Margin

59. Sales per Square Foot
Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
2009 2010 2011 2012 2013 2014
Net Sales Per Sq/Ft $ 206.04 $ 208.16 $ 217.71 $ 229.61 $ 242.53 $ 255.74
Net Income per
sq/ft
$ 7.66 $ 6.80 $ 7.86 $ 9.08 $ 10.71 $ 12.48
Sales per store $ 4,644.38 $ 4,794.11 $ 4,975.99 $ 5,224.01 $ 5,515.47 $ 5,825.78

60. Competitive
Positioning
Primary Attributes PetSmart Mass &
Grocery
Independent Other Pet
Specialty
Broad Assortment X X
Engaged In-Store
Experience With Your
Pet
X
Knowledgeable
Associates
X X
Customer Loyalty
Program
X X X
Veterinary Services X
Grooming Services X X X
Boarding and Day Camp
Services
X X
Training Services X X
Trip Consolidation X

61. US Inflation
Source: Google Trend
Source: ForcastChart.com
1%
US Current Inflation: 1.05%

62. Net Income
Breakdown
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
$-
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
$300,000.00
$350,000.00
$400,000.00
2006 2007 2008 2009 2010 2011 2012 2013 2014
Sevice Sales Portion
Mechandise Sales Portion
Sevice Sales Persent
39.85%
55.56%

63. Service Sales Forecast
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
$-
$200
$400
$600
$800
$1,000
$1,200
2006 2007 2008 2009 2010 2011 2012 2013 2014
Service Sales
Training
PetsHotel
Grooming
Service Sales Percent
11%
16%

64. Earning per share
$1.59
$1.52
$1.88
$2.32
$2.81
$3.36
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
2009 2010 2011 2012 2013 2014
Net income
Earning Per Share

65. Net sales
breakdown
75%
80%
85%
90%
95%
100%
2009 2010 2011 2012 2013 2014
Net Sales(Percent Breakdown)
Merchandise sales Services sales

66. Net sales
breakdown
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
2009 2010 2011 2012 2013 2014
Net Sales(Dollar Breakdown)
Services sales
Merchandise sales

67. Dividends Per Share
$0.33
$0.45
$0.55
$0.67
$0.82
$1.00 $1.06 $1.12
$1.19
$1.26
$1.33
$-
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Dividends Per Share

68. Earning per share