PetSmart Reports Results for the Third Quarter 2008

Earnings of $0.28 per Share; Comp Sales Growth of 5.4 Percent; Net Sales Growth of 12.1 Percent; Services Sales Growth of 15.2 Percent

PHOENIX, AZ--(MARKET WIRE)--Nov 19, 2008 -- PetSmart, Inc. (NasdaqGS:PETM ) today reported net income of $35.8 million, or $0.28 per share, for the third quarter of 2008. That compares with net income of $29.5 million, or $0.23 per share, for the third quarter of 2007.

Net sales for the third quarter of 2008 increased 12.1 percent to $1.3 billion, compared to the third quarter of 2007. Comparable store sales -- or sales in stores open at least a year -- grew 5.4 percent in the third quarter, on top of 1.4 percent growth in the same period in 2007. During the third quarter, pet services sales were $127.8 million, up 15.2 percent from the third quarter of last year.

"The unique blend of staples and discretionary items inherent to our business model has allowed us to manage through this challenging environment and deliver on our guidance for the quarter," said Phil Francis, Chairman and Chief Executive Officer. "But we are not immune to the pressures of a slowing economy. We have decided to pull back even further on our capital spending in 2009 and focus on consistent execution and on outperforming in those areas of the business that differentiate PetSmart from the competition."

Guidance

"In the fourth quarter we expect to deliver earnings per share between 59 and 62 cents and comparable store sales in the low to mid-single digits," said Chip Molloy, Chief Financial Officer. "Our guidance assumes that current trends continue, including some inflation benefit on the top line, product margin pressure and ongoing expense leverage."

2008 Full Year Guidance

-- Total sales growth: High-single digits
-- Comparable store sales growth: Low- to mid-single digits
-- Operating income percentage: Down approximately 20 to 30 basis points as a percentage of sales
-- Net interest expense: Approximately $15 million per quarter
-- Income tax rate: 38 to 39 percent
-- Earnings per share: $1.49 to $1.52 per share
-- Capital expenditures: $285 million or lower
-- Net new store growth: 100 to 104
-- PetsHotel growth: 45

Conference call information

PetSmart management has scheduled a teleconference for 4:30 p.m. (EST) today to discuss results for the third quarter of 2008 as well as the current outlook. This teleconference will be webcast live for all investors at www.petm.com or www.streetevents.com. The webcast will be available until the company announces results for the fourth quarter of 2008. In addition, you can listen to the call live by dialing 866-238-1645 (within the United States and Canada) or 703-639-1163 (for international callers), code 1298971. A phone replay will be available through December 3, 2008, at 888-266-2081 in the United States and Canada, or at 703-925-2533 for international callers, code 1298971.

About PetSmart

PetSmart, Inc. is the largest specialty pet retailer of services and solutions for the lifetime needs of pets. The company operates more than 1,107 pet stores in the United States and Canada, 132 in-store PetSmart PetsHotels® cat and dog boarding facilities, and is a leading online provider of pet supplies and pet care information (www.petsmart.com). PetSmart provides a broad range of competitively priced pet food and pet products; and offers complete pet training, pet grooming, pet boarding, doggie day camp and pet adoption services. Since 1994, PetSmart Charities®, Inc., an independent 501(c)(3) non-profit animal welfare organization, has funded more than $70 million in grants and programs benefiting animal welfare organizations and, through its in-store pet adoption programs, has helped save the lives of more than 3 million pets.

Forward-looking statements

This news release contains forward-looking statements concerning our expectations for future performance, including the statements comprising our 2008 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.