1

Safe Harbor

This presentation contains forward-looking statements, including

statements relating to future revenue growth and goals and future

business opportunities that involve substantial risks and

uncertainties. Such risks and uncertainties include, but are not

limited to, general economic conditions and our ability to manage

our operations and growth. Actual results and developments may

therefore differ materially from those described in this

presentation. For more information about PetSmart, Inc., and risks

arising when investing in PetSmart,

PetSmart Inc.,
Inc you are directed to the

company's Form 10-K, and subsequent Forms 10-Q filed with the

Securities and Exchange Commission.

2
Business Update

B b Moran,
Bob M
President and Chief Executive Officer
3
 Overview

Expected annual sales of over

Leading pet specialty retailer
$5.3 billion in 2009

Expected annual services

Pet services leader
penetration of 11 percent in 2009

More than 1,150 stores expected

Productive North America store network at the end of 2009

Competitive, every day

Industry--leading selection and value
Industry low price strategy

Strong balance sheet and solid

Financial flexibility generator of cash

4
 Total Lifetime Care
Every Pet, Every Parent, Every Time
1,145 Stores at
end of Q2
Over
O
46,000 Associates

PetSmart Over Training Grooming

Charities® 10,000 SKUs

Banfield®
in 738 Stores
PetsHotels® in
156 Stores
5
 Solid Sales/EPS Growth
$6 0
$6.0 $2 50
$2.50

$5.1
$5.0 $2.00
$4.6**
$
$4.2
$4.0 $3.8 $1.50
$1.52
$3.4 $1.47*
ons)

$1 33
$1.33
$
$3.0
(In Billio

$1.25
$3.0 $2.7 $1.14 $1.00
$2.5
$2.2 $0.92

$2 0
$2.0 $0.61 $0 50
$0.50

$0.35
$1.0 $0.00

-$0.28
$0.0 ($0.50)
2000 2001 2002 2003 2004 2005 2006 2007 2008

*Excludes the costs to exit the equine product line, the gain on sale of MMIH stock, and the benefit of the 53rd week 6
**Excludes
**Excludes sales from a 53rd week
 The Pet Population

% of U.S. Households Owning a Pet

64

62 63 63
62 62 62
60 61
58 59
58
56 57
56 56
54

52
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Source: American Pet Products Manufacturers Association, Inc., 2009-2010 National Pet Owners Survey 7
 The Pet Industry
2008 Total Pet Market Pet Products & Supplies
$43.2 Billion $32.1 Billion

5% 7%
7%
10%
39%
26%
52%
31%

23%

Food Food
Supplies/OTC Medicine Supplies/OTC Medicine
Vet Care Services (Grooming/Boarding)
Services (Grooming/Boarding)
Live Animal Live
Li Animal
A i l

Source: American Pet Products Manufacturers Association, Inc., 2009-2010 National Pet Owners Survey 8
 PetSmart Market Share

Pet Products & Supplies Grooming & Boarding Services

$32.1 Billion $3.2 Billion

4%
10% 15%

46%
26%

85%
14%

Mass PetSmart PetSmart

Grocery Other Pet Specialty Other

Independent

Source: 2008 Nielsen Panel Data 9

 The Competitive Landscape

Other Pet
Primary
y Attributes Mass Grocery Independent
Specialty
PetSmart

• Broad Assortment
• Engaged In-Store Experience
With Your Pet
• Knowledgeable Associates
• Customer Loyalty Program
• Veterinaryy Services
• Grooming Services
• Boarding & Day Camp Services
• Training Services
• Trip Consolidation

10
 Current Situation in Economy
U.S. Unemployment (%) U.S. Personal Consumption U.S. Savings Rate (%)
Index
10 107 6

9
106 5
8

7 106
4
6
105
5 3
105
4
2
3 104
2
1
104
1

0 103 0
Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2
2008 2008 2008 2008 2009 2009 2008 2008 2008 2008 2009 2009 2008 2008 2008 2008 2009 2009

11
 Macro Impacts on PetSmart
Customers and Transactions
(Comp Percent Change – 12 Months Ending July 2009)
4%
3.1%
3%
2%
1%
%
0%
-1%
-2%
-3%
-4% -3
3.7%
7%
-5%
Comp Store Customers
Transactions per Customer

12
 Shift in Focus
2003 2007 2010+

C
Construction
t ti

Operating

Merchandising

13
 Strategic Priorities

Leveraging Improving
Customer Merchandise
Insights Capabilities
Shareholder
Value

Engaging
C t
Customers

14
The Customer

Mary Miller
Chief Marketing Officer and
Senior Vice President, Marketing
15
 Strategic Priorities

Leveraging Improving
Customer Merchandise
Insights Capabilities
Shareholder
Value

Engaging
C t
Customers

16
 Customer Insights

Gather customer
data

Mine consumer
Launch Initiative
insights

Develop and
Test and pilot refine business
Measure initiatives

17
 Customer Segmentation

% Customers % Sales

Smart
10 with 50
Heart

50 Smart 45

40 Mart 5

18
 How Our Customers Shop?
Smart with Heart Smart Mart
% of PetSmart
10% 50% 40%
Customers

% of Total Sales 50% 45% 5%

% of Total Margin 46% 48% 6%

Average
Transactions Per 17.1 4.1 1.2
Year
Average Annual
Spend per $757 $136 $18
Customer
Mass Retailer
(% that have shopped for pet 10% 24% 32%
food/supplies in past 4 weeks
from mass retailer)

PetPerks Members 79% 57% 36%

Source: PetSmart CRM Database 19

 What Do Our Customers Look Like?
Smart with Heart Smart Mart

Dog Owners 92% 77% 59%

Cat Owners 58% 34% 22%
Female Shoppers 70% 66% 61%
Annual Family
51% 46% 41%
Income of $75k+
College Graduates 36% 32% 29%

Engaged
E d in
i services,
i pett iis View P
Vi PetSmart
tS t as resource,
Focused on price/value,
Characteristics child, most likely to likely a services customer -
cares about convenience
purchase ANF foods most likely grooming

New puppy products,

What do they Primarily
P i il hard
h d goods
d and d
services, and multiple Primarily hard goods
Purchase? food for dog, cat or fish
species products

Source: PetSmart CRM Database 20

 Customer Strategic Focus
Smart
S t with
ith H
Heartt S
Smart
t M t
Mart
% of PetSmart
10% 50% 40%
Customers

% of Total Sales 50% 45% 5%

% of Total Margin 46% 48% 6%

Average
Transactions Per 17.1 4.1 1.2
Year
Average Annual
Spend per $757 $136 $18
Customer
Mass Retailer
(% that have shopped for pet 10% 24% 32%
food/supplies in past 4 weeks
from mass retailer)

PetPerks Members 79% 57% 36%

Source: PetSmart CRM Database 21

Merchandise Update

Joe O’Leary,
Senior Vice President Merchandising
and Supply Chain
22
 Strategic Priorities

Leveraging Improving
Customer Merchandise
Insights Capabilities
Shareholder
Value

Engaging
C t
Customers

23
 Our Merchandising Priorities

Develop
Strong
Merchandise
Capabilities

Leverage
Core
Strengths

Improve
Merchandise
Assortment and
Margin

24
 Leverage Core Strengths

Best
Destination
for Food

D i i
Driving
Differentiated
Adoptions
Product
Assortment

Strengthened
Vendor
Partnerships

25
 Differentiated Product Assortment

More than 10,000 Distinct Items

26
 Best Destination for Food
The PetSmart Margin Available
Aisle Range

Pet Specialty
S
Super P
Premium
i 2 1X
2.1X

PetSmart
Rx 1 8X
1.8X Retail
Exclusive

Premium 1 8X
1.8X Pet Specialty

Bridge 1.4X Everywhere

Groceryy 1X Everywhere
y

27
 Strengthened Vendor Partnerships

Outpacing the
Market
M k t in
i
Growth &
Market Share

Raising the
Sharing of Bar on
Industry Industry
Insights
g Standards
Senior
Management
Meetings
Compelling
V d
Vendor
Promotions

28
Eukanuba Promotion

29
 Driving Adoptions

Quarterly weekend adoption events that result

in ~18,000 new adoptions per weekend

Meaningful branding opportunities

Workingg with vendors to develop

p long-
long
g-term
adoption strategies

Identifying opportunities to increase sales

penetration per adoption

New customer opportunity

Promoting Adoptions to Drive New Pet Acquisition and Drive Sales

30
 Driving Adoptions
USA Today Full
Full--Page Ad

31
 Our Merchandising Priorities

Develop
Strong
Merchandise
Capabilities

Leverage
Core
Strengths

Improve
Merchandise
Assortment and
Margin

32
 Improve Merchandise Assortment and Margin

Progress
Leverage Strengths in Consumables

Reset of Key Hardgood Categories

Increased Penetration of Proprietary Brands

Completed
In Progress

Driving to Expanding Product Margins

33
 Leverage Strengths in
Consumables

C oss Sell g
Cross-Selling

Advanced Nutrition &

Formulas / Rx

Trade Up and In Strategy

Trade-Up

Primary Traffic Driver

34
 Reset of Key Hardgood Categories

Focus on Differentiation, Innovation, Solutions and Value

50% of Hardgood Sales Resets Completed

— Dog Toys
— Dog Collars & Leads
— Dog Containment
— Dog Waste Management

Good, Better, Best Assortment

Significant Margin Improvements

35
 Collar and Leads Reset
Before
• Excessive price points per category
• No clear ggood/better/best offerings
g
• Difficult shopping experience
• Difficult store labor experience

After

• Clear pricing tiers in every section

• E t bli h d good/better/best
Established d/b tt /b t
• Improved shopping experience
• Improved quality & reduced costs
• Improved
p store labor efficiencies

After

36
 Increase Penetration of
Proprietary Brands

Brand Product Brand

Development Development Consolidation
• Relaunch • Formula & • Increased
Authority & Packaging customer
D tl ’
Dentley’s i
improvements t awareness
• Finalized • Holiday products • Improved
Portfolio • Vendor recognition
partnerships

37
Driving Towards Long
Long--Term Goal of 25% of Sales
 Our Merchandising Priorities

Develop
Strong
Merchandise
Capabilities

Leverage
Core
Strengths

Improve
Merchandise
Assortment and
Margin

38
 Develop Strong
Merchandising Capabilities

 Building strong merchandising leadership team

with extensive merchandising and retail
operations experience

 Lowering product costs,

costs enhancing planning
efficiency and improving promotional
effectiveness

B
Beginning
gi i g tot ddevelop
l space & assortment
t t
capabilities.

Talent in Place and Vendor Partnerships Strengthened

39
St
Store O
Operations
ti and
d SServices
i

David Lenhardt,
Senior Vice President
Store Operations and Human Resources
40
 Strategic Priorities

Leveraging Improving
Customer Merchandise
Insights Capabilities
Shareholder
Value

Engaging
C t
Customers

41
 Engaging Customers

Consistent Execution

• Simplified and streamlined

store operational processes
• Implemented labor systems
• Improved alignment with
supply chain

Deep Customer Focus

• Creating a differentiated and

engaged customer experience
• Developing an enhanced
selling culture

42
 Consistent Store Execution

Strong in-store execution capabilities

Standardized operational processes
Labor management systems
Merchandise movement
Improved in-stocks
Reduced scope of district management
Tight management of expense controls

A more focused, disciplined & standardized approach

43
 Deep Customer Focus

Differentiated and Engaged

Customer Experience

• Focused, formalized customer

engagement standards
• Defining key customer
engagement behaviors

44
 Customer Engagement Officer

Formalized

Customer Focused

Consistent

45
 Driving Results
Early Impact of CEO

Since the CEO rollout, key drivers of customer satisfaction have significantly improved, resulting in
an increase in overall satisfaction.

700 430 bps

608 bps Improvement
600 in Overall
524 bps Satisfaction
500
Basis Points

400 354 bps

300
231 bps
b
B

200

100

0
Checkout Speed Availability of Associate Pet Care Items Wanted In
and Efficiency Assistance Knowledge Stock

Overall satisfaction is defined as percent of customers completely satisfied. 46

OSAT data -- U.S. year to date through Q2.
Enhanced Selling Culture

47
 Multiple Services Offerings
PetsHotel
i 156 S
in Stores

Grooming Training

Day Camp
Banfield Partnership
i 738 stores
in t

48
 Services Growth
Services
Sales Sales
(Millions) Penetration
$700 ~ 11.0% 12%
10.4%
$600 9.7%
10%
8.8%
$500
8%
$400
6%
$300
4%
$200

$100 2%

$0 0%
2006 2007* 2008 2009
Training PetsHotels Grooming Sales Penetration

49
* Excludes the 53rd week
 Services Market Opportunity
60% I d t Services
Industry S i Penetration
P t ti ((pastt 12 months)
th )

46%

40% Services still provide significant

untapped demand from pet owners

20%
15%

6%
4%
0%
Grooming Boarding Training Daycare
Base: Dog Owners Dog & Cat Owners Dog Owners Dog Owners

50
Source: Mar ’09 Brand Tracking
 Services Opportunity
Driving Incremental Sales Among Existing Customers

As customers trial and use of services increases,

they become more loyal and spend more.
Gross
5.4x Margin

35
3.5x

1.5x
1x

Dog Product Only Dog Plus Grooming Dog Plus Grooming & Dog Plus Grooming,
Training Training & Boarding

Source: PetPerks data 51

 PetsHotel / Day Camp

Key
y Differentiator

Viable Business Model

Hi hl Fragmented
Highly F t d IIndustry
d t

Halo Sales

52
 PetsHotel vs. Human Travel Industry

PetsHotel weekly occupancy variance has declined at a

similar rate as human lodging, reflecting the current
economici iimpactt on ttravell ttrends.
d
Occupancy Variance Avg. Occupancy Variance
2000 -200
200
(07--08))
((07
1500 -220

1000 -240

-260
500
-280
bps

0
-300

bps
-500
-320
-1000 -340
-311 bps
-1500 -360

-2000 * -380
Human Lodging
-400 -379 bps
07-08 Lodging Bps Change 07-08 PsH Bps Change PetsHotels

Note: Fwk 200753 = Wk 1 in 08 to better align seasonality. PETM data based on 62 comp PetsHotels 53
* Industry Data from Smith Travel Research (STR) “Weekly US Lodging Performance” reports. No industry data for Fwks 200843 and 200847
 Strengthening PetsHotel Model

Grow Sales
Leveraging Alignment with
New customer Add-on services
Seasonal pricing customer core store grand
marketing and merchandise
engagement opening

Reduce Expenses
Leverage PetsHotel Labor
Process Expense
labor in core space Cost to build scheduling
improvements reduction
store optimization tool

54
 Our Associates
Associates are our:
 Greatest Differentiator
M Mostt Effective
Eff ti M k ti Ch
Marketing Channell
 Key to Building Strong Pet Parent Relationships

55
Financial Overview

Chip Molloy,
Chi f Fi
Chief Financial
i l Offi
Officer
and Senior Vice President
56
 Improving Financial Performance
2002-2005
2002-
$3,761
$4,000 $2,993 $3,364
Sales $2,695 Sales
(Millions)
$2,000 CAGR
+12%
$0
2002 2003 2004 2005
EBT
(Millions)
$400 $289 EBT $
$203 $
$241
$200 $135 CAGR
+29%
$0
2002 2003 2004 2005

EBT % 10%
EBT %
7.2% 7.7%
6.8% Peaks
5.0%
5% at 7
7.7%
7%
in 2005
0%
2002 2003 2004 2005

57
 A Lot Has Changed
Since Our Peak in ‘05
05
$6,000 $4,584 $5,065 ~$5,325
Sales $3,761 $4,234 Sales
(Millions) $4,000 CAGR
$2,000 9%
$0
2005 2006 2007 2008 2009
EBT
$320 $309 $311 EBT $
(Millions)
CAGR
$300 $289 $290
~$285 0%
$280
$260
2005 2006 2007 2008 2009

10% 7.7% EBT %

EBT % 6.9% 6 7%
6.7% 6 1%
6.1% ~5.4% Declines
5%
230 bps
0%
2005 2006 2007 2008 2009

58
 First We Had Cost Challenges
Millions C
Cap E
Ex % Sales Millions C t
Costs % Sales
$300 6.4% 7% $2,000 38%
37.8%
5.7% 6%
$250 37.3%
$1,500
4.4% 5%
$200 37%

4%
$150 $1,000 36.4%
3%
$100 36%
2%
$ 00
$500

$50 1%

$166 $241 $294

$0 0% $0 35%
2005 2006 2007 2005 2006 2007
Rent & Occupancy* O,G & A
Supply Chain* Interest Expense
% Sales *Gross
Gross Margin Items

59
 Fiscal Discipline Transformation

Up Through 2007 2008 & Beyond

What What
Can Can
We We
Do? Afford
To
Do?

60
 Fiscal Discipline: Step 1
Optimizing Cap Ex
Millions % Sales
$300 6.4% 7%
5.7%
$250 4.7% 6%
4.4% 5%
$200 ~$120-
~$120-
$150M 4%
$150 ~2.2% 3%
$100
2%
$50 1%
$166 $241 $294 $238 ~$120
$0 0%
2005 2006 2007 2008 2009 2010+
Expected Uses of Future Expenditures: Expected Benefits:
• Maintaining a superior look and feel to our • Reduces yr/yr dilution
stores (maintenance) • Helps to “variabilize” cost structure
• 3
3-4%/yr
4%/yr square foot growth • Significant reduction in depreciation in
• ~20 PetsHotels/yr the out years
• High yield re-modeling/reset projects • Forces prioritization of highest yielding
projects
• Increases free cash flow

61
 Managing Capital Helps Manage
Free Cash Flow
2005 2006 2007 2008 2009

$387
$330 ~$346
$307
$270
Cash From
Operations*

Capital $166 ~$120

$241 $238
Expenditures
$294

~$226
$149
$164
Free Cash
Flow $13
$29

All numbers in millions

* Cash flow from operations was adjusted to include capital lease payments
62
 Fiscal Discipline: Step 2
18% Manage Costs
16%
14%
12% Cost Growth*

10% Sq. Ft. Growth

8%
6%
4% Manage Costs
to Leverage
2% at 2.0%-2.5%
Comp
0%
2006 2007 2008 2009 2010+

Reductions Opportunities
• Store Labor • Travel • Depreciation
(Non- Customer Facing) • Supplies • Rent & Occupancy
• Maintenance • Supply Chain Efficiencies • Cost-Conscious Culture
• Professional Fees

*Costs include Rent and Occupancy, Supply Chain, OG&A, Interest Expense 63
 Our Current Challenge Is
Reduced Discretionary Spend
Mix 2005 2006 2007 2008 2009

Consumables 49 1%
49.1% 49 2%
49.2% 49 6%
49.6% 51 6%
51.6% 53 5%
53.5%

Hardgoods 40.7% 39.8% 38.6% 36.1% 34.0%

Live Pet 2.3% 2.2% 2.1% 1.9% 1.8%

Services 7.9% 8.8% 9.7% 10.4% 10.7%

Gross Margin %
(Products & Services)
45.0%
44.5%
Margin negatively impacted by 600 basis
44.0%
point decline in hardgoods penetration
43 5%
43.5%
43.0%
42.5%
42.0%
41 5%
41.5%
2005 2006 2007 2008 2009

64
 Driving Sales While Stabilizing/
Expanding GM Is Key
Goals are to Consistently Drive…
 2-4%
2 4% C
Comp
 Stable to Expanding GM%

How We Plan to Deliver…

 Leverage
g Core Strengths
g
 Leverage Strengths in Consumables
 Reset of Key Hardgood Categories
 Increased Penetration of Proprietary Brands
 Improve Merchandise Capabilities

65
 The Ultimate Goal Is To Consistently
Produce Superior Returns
2-4% Comps

4-7% Sales
G
Growth
th 7-12% EBT $
Growth
3-4% Sq. Ft.
Stable to
Expanding 13-18%
13-
4-5% Share
Product Total Yield
Repurchase
Margins Increasing Yield
Operating
Cash Flow
Leveraging $350M+
Costs at a 1.5-2%
1.5-
2-2.5% Comp Dividend
Yield
Cap Ex $120
$120--
$150M

Free Cash
Flow $200-
$200-
$230M +
66
Q & A Session

67
68