On March 4, 2004, Standard&Poor's Rating Services raised its corporate credit rating on PetsMart Inc. to 'BB-' from 'B+'. The outlook is positive. The upgrade reflects PetsMart's significant operating improvement over the past three years due to strong sales trends and an enhanced distribution network. As a result, credit protection measures have improved significantly over this period. A higher rating could be considered over the next two years if the company continues to improve credit protection measures while prudently managing its growth. The ratings reflect PetsMart Inc.'s participation in the competitive and highly fragmented pet supplies retail industry and its improving, but still inconsistent, operating history. These risks are mitigated somewhat by the company's leading position in the
