The ratings on PetsMart Inc. reflect the company's participation in the competitive and highly fragmented pet supplies retail industry. These risks are partially mitigated by the company's leading market position in the industry and its significantly improved operating performance. PetsMart is a leading operator of specialty pet supply stores. The company has made significant progress in turning around its operations over the past three years. PetsMart continued to post positive operating performance in the first nine months of fiscal 2004, as comparable-store sales increased 6.9%. This is attributed to PetsMart's successful store reformatting and expanded focus on pet services. The reformatting of the company's store base into the Eagle format (which offers customers an easier shopping experience) from its warehouse-style
