The ratings on PetsMart Inc. reflect its inconsistent historic operating performance, a highly competitive and fragmented pet food supplies and services industry, and the company's highly leveraged capital structure. These risks are mitigated, somewhat, by PetsMart's leading industry position. Standard&Poor's believes PetsMart's growth in recent years has contributed to operating challenges that have slowed improvement in financial performance. Operating issues related to its information systems and the mass distribution of Iams premium dog food by Procter&Gamble Co. negatively affected sales and EBITDA in fiscal 2000 (ended January 2001). These issues resulted in a decrease in EBITDA to $68 million (not adjusted for operating leases) in fiscal 2000 from about $130 million in fiscal 1999. After a
