The ratings on PetsMart Inc. reflect the company's participation in the competitive and highly fragmented pet supplies retail industry and its inconsistent operating history. These risks are partially mitigated by the company's leading market position in the industry and its significantly improved operating performance. Phoenix, Ariz.-based PetsMart is a leading operator of specialty pet supply stores. The company has made significant progress in turning around its operations, resulting in healthy same-store sales gains over the past three years. PetsMart continues to post positive operating performance in 2004, with comparable-store sales increasing 7% in the first half. This is attributed to PetsMart's successful store reformatting, expanded focus on pet services, and improved operating efficiency. The reformatting of the company's store base
