PETCO Animal Supplies, Inc.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030603/PETCOLOGO )
Speaking at the Company's Annual Meeting of Shareholders, Chief Executive Officer James Myers noted that through its first quarter 2004 PETCO has delivered comparable store sales increases of 5% or greater in 44 of the past 45 quarters, an impressive track record extending more than 11 years. In fiscal 2003, total sales increased to $1.65 billion, representing an increase of 12% over the prior year. Sales of services including grooming and canine education achieved total annual growth of 22% in 2003, again establishing the segment as the fastest growing of PETCO's businesses. Operating income increased substantially to $138 million, or 8.3% of sales. Overall, strong comparable store sales and expanding margins drove a significant increase in net earnings.
Net sales for PETCO during first quarter 2004 increased 13.7% to $425.9 million with a comparable store sales increase of 6.3%. This strong revenue growth drove a 42% increase in net earnings over the prior year quarter.
"PETCO's exceptional performance is a reflection of our leading market position in a consistently growing $28 billion industry," Myers said. "Positive demographic forces and our business model's track record of operational excellence position us well for continued strong growth."
Store Enhancements, Expansion Plans
In fiscal 2003, the Company opened 54 net new stores and created more than 100 new "Millennium"-format stores through the combination of new stores and remodels. This brought the total number of stores in the "Millennium" format to more than 200. The Company ended fiscal 2003 with 654 stores, and the first quarter of 2004 with 669 stores in 44 states and the District of Columbia.
In fiscal 2004, the Company plans to continue with its strategic store remodel program and update approximately 50 stores to the latest format. In addition, PETCO plans to open 90 new stores, or, 70 net new stores after relocations and store closings.
"We believe there is significant room for additional growth as we continue onward to our target store count of 1,250 total community based stores," Myers said.
Animal Care Initiatives
The Company noted its dedication to continually raising animal care standards within the industry by educating both associates and customers.
Included in its ongoing initiatives are:
* Providing award-winning training to all store associates
* Conducting hourly walks with comprehensive checklists to further
ensure the well being of animals
* Designing high-quality habitats around the well-being of companion
animals
* Appointing a Director of Veterinary Medicine, who has reviewed all
animal care protocols and habitats
* Ensuring that every store has an associated veterinarian working with
it so that any animal requiring vet care receives appropriate
treatment
* Creating an industry-leading vendor certification program under which
inspection teams ensure that PETCO's animal care standards are met at
each of the Company's vendor partner facilities
* Development of an Animal Care Advisory Board that will help the
Company to continue raising the bar for animal care standards within
the industry
Community Animal Welfare Support
PETCO emphasized the importance of the PETCO Foundation, the Company's non-profit charity, which in fiscal 2003 raised and donated more than $3.6 million to animal welfare groups around the country. Since inception in 1999, the Foundation has raised more than $17 million, which has supported more than 2,000 grassroots animal welfare organizations.
When devastating firestorms ravaged Southern California last year, PETCO and the PETCO Foundation provided truckloads of food, supplies and temporary housing for animals forced from their homes.
"Customers instinctively brought all kinds of animals, including the barnyard variety, to PETCO stores, where our animal-loving associates provided free care and safekeeping. Many store associates volunteered their time at a number of temporary shelters where families were stranded for up to a week. These actions demonstrate PETCO's community focus and the empathy and care we strive to promote as core PETCO values among our store associates," Myers said.
In addition to helping in disasters, the Foundation, with its animal adoption group partners around the country, helped place more than 1.5 million adoptable animals in 2003.
Building the PETCO Brand at the National Level with PETCO Park
Myers also discussed that while PETCO remains a community-focused organization, it continues to strengthen its brand at a national level in a variety of ways.
One noteworthy example is PETCO Park, the new home of the San Diego Padres baseball team, which is increasing the Company's top-of-mind brand recognition. Already generating more than half a billion impressions nationwide, PETCO Park has been a home run from a branding perspective, both in PETCO's home town as well as its store communities across the country.
Other Business Items
A shareholder proposal relating to the review of animal sales was rejected. More than 98% of the votes cast were against the shareholder proposal.
About PETCO Animal Supplies, Inc.
PETCO is a leading specialty retailer of premium pet food, supplies and services. PETCO's vision is to best promote, through its people, the highest level of well being for companion animals, and to support the human-animal bond. PETCO generated net sales of $1.6 billion in fiscal 2003. It operates 669 stores in 44 states and the District of Columbia, as well as a leading destination for on-line pet food and supplies at www.petco.com.
Through the PETCO Foundation, PETCO's non-profit charity, the Company endeavors to be a community leader in promoting the welfare of companion animals, as well as the importance of the human-animal bond. The PETCO Foundation has raised more than $17 million since inception in 1999. More than 2,000 non-profit grassroots animal welfare organizations from around the nation have received support from the Foundation.
Certain statements in this news release that are not historical fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results of PETCO to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors, such as performance of new stores, ability to execute expansion strategy and sustain growth, debt levels, reliance on vendors and exclusive distribution arrangements, competition, integration of operations as a result of acquisitions, compliance with various state and local regulations and dependence on senior management, are discussed from time to time in the reports filed by PETCO with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended January 31, 2004.
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PRN Photo Desk,
SOURCE: PETCO Animal Supplies, Inc.
CONTACT: Rodney Carter, Senior Vice President, CFO, +1-858-202-7848,
Web site: http://www.petco.com/
