UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
____________________
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 1, 1997
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to __________
_________________
Commission file number: 0-23574
PETCO ANIMAL SUPPLIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0479906
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9125 Rehco Road, San Diego, California 92121
(Address of principal executive office) (Zip Code)
(619) 453-7845
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X
No ___
(Indicate the number of shares of each of the registrant's classes of common
stock, as of the latest practicable date.)
Title Date Outstanding
Common Stock, $.0001 Par Value December 10, 1997 20,973,795
PETCO Animal Supplies, Inc.
Form 10-Q
For the Quarter Ended November 1, 1997
Index
Part I Financial Information Page
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at February 1, 1997
and November 1, 1997 3
Consolidated Statements of Operations for the thirteen
and thirty-nine weeks ended November 2, 1996 and
November 1, 1997 4
Consolidated Statements of Cash Flows for the thirty-nine
weeks ended November 2, 1996 and November 1, 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
PETCO ANIMAL SUPPLIES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except shares)
<TABLE>
<S> <C> <C>
February 1, November 1,
1997 1997
ASSETS
Current assets:
Cash and cash equivalents $ 44,338 $ 3,828
Receivables 7,881 13,210
Inventories 82,782 98,993
Other current assets 2,428 2,866
Total current assets 137,429 118,897
Fixed assets, net 109,829 132,092
Goodwill 42,408 40,113
Deferred tax assets 19,070 29,308
Other assets 2,244 2,724
$310,980 $323,134
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 42,457 $ 47,378
Accrued expenses 18,043 28,429
Accrued salaries and employee benefits 9,096 7,734
Revolving credit facility 8,950 23,000
Current portion of capital lease and
other obligations 4,575 5,278
Total current liabilities 83,121 111,819
Capital lease and other obligations,
excluding current portion 15,581 12,538
Accrued store closing costs 8,691 9,710
Deferred rent 7,088 8,500
Stockholders' equity:
Common stock, $.0001 par value, 100,000,000
shares authorized, 20,153,423 and
20,973,454 shares issued and outstanding,
respectively 2 2
Additional paid-in capital 265,971 270,611
Accumulated deficit (69,474) (90,046)
Total stockholders' equity 196,499 180,567
_______ _______
$310,980 $323,134
</TABLE>
See accompanying notes to consolidated financial statements
PETCO ANIMAL SUPPLIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share data)
<TABLE>
<S> <C> <C> <C> <C>
Thirteen weeks ended Thirty-nine weeks ended
November 2, November 1, November 2, November 1,
1996 1997 1996 1997
Net sales $ 151,556 $ 191,775 $ 428,829 $ 538,143
Cost of sales and
occupancy costs 112,095 141,304 319,915 400,123
Gross profit 39,461 50,471 108,914 138,020
Selling, general, and
administrative expenses 34,333 52,964 97,709 131,252
Merger and business integration
costs 2,949 22,496 17,894 31,937
Operating income (loss) 2,179 (24,989) (6,689) (25,169)
Interest income (expense) 54 (882) (407) (2,056)
Earnings (loss) before
income taxes 2,233 (25,871) (7,096) (27,225)
Income taxes (benefit) 1,116 (8,858) (1,982) (8,698)
Net earnings (loss) $ 1,117 $ (17,013) $ (5,114) $ (18,527)
Net earnings (loss) per common
and common equivalent
share $ 0.06 $ (0.81) $ (0.27) $ (0.90)
Weighted average number of
common and common equivalent
shares outstanding 20,146,685 20,958,804 19,183,990 20,520,325
</TABLE>
See accompanying notes to consolidated financial statements
PETCO ANIMAL SUPPLIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<S> <C> <C>
Thirty-nine weeks ended
November 2, November 1,
1996 1997
Cash flows from operating activities:
Net loss $ (5,114) $(18,527)
Depreciation and amortization 12,902 17,877
Deferred taxes (2,256) (10,238)
Changes in assets and liabilities:
Receivables (2,490) (4,778)
Inventories (19,033) (13,444)
Other current assets (2,071) (236)
Other assets (1,157) (185)
Accounts payable 5,525 871
Accrued expenses 2,566 8,352
Accrued salaries and employee benefits 466 (1,362)
Accrued store closing costs 4,150 1,576
Deferred rent (642) 1,281
Other -- 7,437
Net cash used in operating activities (7,154) (11,376)
Cash flows from investing activities:
Additions to fixed assets (35,419) (41,301)
Net cash invested in acquisitions of businesses (7,598) --
Net cash used in investing activities (43,017) (41,301)
Cash flows from financing activities:
Net borrowings under revolving credit facility 4,511 14,050
Repayment of capital lease and other obligations (1,640) (4,918)
Proceeds from the issuance of common stock 78,989 2,445
Distributions to shareholders (769) --
Net cash provided by financing
activities 81,091 11,577
Net increase(decrease) in cash and cash equivalents 30,920 (41,100)
Cash and cash equivalents at beginning of year 17,185 44,338
Cash and cash equivalents at beginning of year
of immaterial pooling of interests -- 590
Cash and cash equivalents at end of period $ 48,105 $ 3,828
</TABLE>
See accompanying notes to consolidated financial statements
PETCO ANIMAL SUPPLIES, INC.
Notes to Consolidated Financial Statements
NOTE 1 - GENERAL
In the opinion of management of Petco Animal Supplies, Inc. (the "Company" or
"PETCO"), the unaudited consolidated financial statements contain all
adjustments, consisting of normal recurring adjustments, necessary to present
the financial position, results of operations and cash flows as of
November 1, 1997, and for the periods ended November 2, 1996 and
November 1, 1997. Because of the seasonal nature of the Company's business, the
results of operations for the thirteen and thirty-nine weeks ended
November 2, 1996 and November 1, 1997, are not necessarily indicative of the
results to be expected for the full year. The Company's fiscal year ends on the
Saturday closest to January 31, resulting in years of either 52 or 53 weeks.
All references to a fiscal year refer to the fiscal year ending on the Saturday
closest to January 31 of the following year. For example, references to fiscal
1996 refer to the fiscal year beginning on February 4, 1996 and ending on
February 1, 1997. For further information, refer to the consolidated financial
statements and footnotes thereto for fiscal 1996 included in the Company's
Form 10-K Annual Report (File No. 0-23574) filed with the Securities and
Exchange Commission on April 30, 1997.
NOTE 2 - ACQUISITIONS
During fiscal 1996, the Company completed two acquisitions of retailers of pet
food and supplies in transactions accounted for as purchases. The aggregate
fair value of assets acquired was $14,433 and assumed liabilities were $1,384
with $13,049 of net cash invested in the acquisition of these businesses. The
excess of the aggregate cost over the fair value of net assets acquired was
$11,293 which was recorded as goodwill and is being amortized over fifteen
years. The consolidated financial statements include the operating results
from the closing date for each respective purchase acquisition.
The Company acquired all of the outstanding equity securities of a retailer with
eight pet food and supply stores operated under the tradename Pet Nosh in July
1996 and a retailer with four pet food and supply stores operated under the
tradename PETS USA in October 1996, in exchange for an aggregate 876,706 shares
of common stock in transactions accounted for as poolings of interests. All
prior period financial statements have previously been restated for these
acquisitions.
The company acquired all of the outstanding equity securities of a retailer with
thirty-two pet food and supply stores operated under the tradename Pet Food
Warehouse in December 1996 in exchange for 2,052,190 shares of common stock, and
a retailer with eighty-two pet food and supply stores operated under the
tradename PetCare ("PetCare") in November 1997 in exchange for 1,543,445 shares
of common stock, (collectively, the "Pooled Companies"), with these acquisitions
accounted for as poolings of interests. Consolidated financial statements for
the periods presented have been restated to include the financial position and
results of operations and cash flows of the Pooled Companies.
Net sales and net earnings (loss) for PETCO, as previously reported, and the
Pooled Companies for the periods preceding the acquisitions were as follows:
<TABLE>
<S> <C> <C> <C>
Pooled
PETCO Companies Combined
Thirteen weeks ended November 2, 1996
Net sales $107,908 $ 43,648 $151,556
Net earnings (loss) 1,327 (210) 1,117
Thirty-nine weeks ended November 2, 1996
Net sales 307,692 121,137 428,829
Net earnings (loss) (4,409) (705) (5,114)
PETCO PetCare Combined
Twenty-six weeks ended August 2, 1997
Net sales $292,292 $ 54,076 $346,368
Net earnings (loss) 475 (1,988) (1,513)
</TABLE>
In August 1997, the Company acquired all of the outstanding equity securities of
a retailer with four pet food and supply stores operated under the tradename
Super Pets. In October 1997, the Company acquired all of the outstanding equity
securities of a retailer with nine pet food and supply stores operated under the
tradename Paws, a retailer with five pet food and supply stores operated under
the tradename The PetCare Company, and a retailer with four pet food and supply
stores operated under the tradename Pet Food Savemart, in exchange for an
aggregate 613,077 shares of common stock. These acquisitions were accounted for
as poolings of interests with their financial positions and results of
operations for the thirteen weeks ended November 1, 1997 included in the
accompanying consolidated financial statements. Previously reported financial
statements have not been restated to include the results of these acquisitions
as revenues and results of operations prior to the acquisition were not
material to the consolidated financial results of the Company.
Distributions to shareholders reflected in the accompanying Consolidated
Statements of Cash Flows are related to activities of acquired companies.
The Company recorded merger and business integration costs of $2.9 million
during the thirteen weeks ended November 2, 1996, and $17.9 million during the
thirty-nine weeks ended November 2, 1996. These costs include transaction
costs, costs attributable to lease cancellation and closure of duplicate or
inadequate facilities and activities, facility conversion costs, cancellation of
certain contractual obligations and other integration costs.
The Company recorded charges of $33.5 million during the thirteen weeks ended
November 1, 1997, which consist of merger and integration costs of $22.5 million
and $11.0 million of related costs reflected in selling, general and
administrative expenses. The Company recorded charges of $42.9 million during
the thirty-nine weeks ended November 1, 1997, which consist of merger and
business integration costs of $31.9 million and $11.0 million of related costs
reflected in selling, general and administrative expenses. These costs include
transaction costs, costs attributable to lease cancellation and closure of
duplicate or inadequate facilities and activities, facility conversion costs,
cancellation of certain contractual obligations and other integration costs.
NOTE 3 - NET EARNINGS (LOSS) PER SHARE
Net earnings (loss) per common and common equivalent share are computed by
dividing net earnings (loss) by the weighted average number of common and common
equivalent shares outstanding during the period.
For the thirteen and thirty-nine weeks ended November 2, 1996 and November 1,
1997, common equivalent shares were not included as their effect would not be
materially dilutive.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The Company currently utilizes both superstore and traditional store formats and
follows a strategy of converting and expanding its store base from a traditional
store format to a superstore format. As a result of this strategy, the Company
has opened and acquired superstores, has expanded, remodeled, and relocated
traditional stores into superstores, collectively referred to as conversions,
and has closed underperforming stores. At November 1, 1997, the Company
operated 451 stores, including 383 superstores, in 33 states and the District of
Columbia. At November 2, 1996, the Company operated 389 stores, of which 314
were superstores.
As a result of the Company's plan to open approximately 40 superstores this
year, including conversions of existing traditional stores into superstore
formats and excluding acquisitions, the Company anticipates certain costs to
increase as a percentage of sales in the near term. In addition, the timing of
new superstore openings and related preopening expenses and the amount of
revenue contributed by new and existing superstores may cause the Company's
quarterly results of operations to fluctuate. The Company expects continued
downward pressure on its gross profit as a percentage of sales from higher
occupancy costs in new stores and increased competitive pressures in certain
markets. This trend should be offset, however, by increased sales from
maturing stores and the benefit of expanded merchandise assortments in existing
stores. Increased payroll, advertising and other store level expenses as a
percentage of sales in new stores should also contribute to lower store
operating margins. In addition, the Company charges preopening costs associated
with each new superstore to earnings as incurred. Therefore, the Company
expects that the opening of a large number of new superstores in a given
quarter may adversely impact its quarterly results of operations for that
quarter.
During fiscal 1996, the Company completed two acquisitions of retailers of pet
food and supplies which were accounted for as purchases.
In July 1996, the Company acquired a retailer that operated eight pet food and
supply stores under the tradename Pet Nosh located in New York, New Jersey, and
Connecticut.
In October 1996, the Company acquired a retailer that operated four pet food
and supply stores under the tradename PETS USA located in Colorado.
In December 1996, the Company acquired a retailer that operated thirty-two pet
food and supply stores under the tradename Pet Food Warehouse located in
Minnesota, Iowa, Wisconsin, North Dakota and South Dakota.
In August 1997, the Company acquired a retailer that operated four pet food and
supply stores under the tradename Super Pets located in Southern California.
In October 1997, the Company acquired a retailer that operated nine pet food
and supply stores under the tradename Paws located in Pennsylvania and
New Jersey, a retailer that operated five pet food and supply stores under the
tradename The PetCare Company located in Southern California, and a retailer
that operated four pet food and supply stores under the tradename Pet Food
Savemart located in Kansas and Missouri.
In November 1997, the Company acquired a retailer that operated eighty-two
stores under the tradename PetCare located in ten midwestern and southern
states.
These eight acquisitions have been accounted for as poolings of interest. The
consolidated financial statements for the prior periods presented have been
restated to include the accounts of Pet Nosh, PETS USA, Pet Food Warehouse, and
PetCare.
The Company's business is also subject to some seasonal fluctuations.
Historically, the Company has realized a higher portion of its net sales during
the fourth quarter and a lower portion of its net sales in the third quarter.
RESULTS OF OPERATIONS
THIRD QUARTER 1997 COMPARED TO THIRD QUARTER 1996
Net sales increased 26.5% to $191.8 million for the thirteen weeks ended
November 2, 1997 ("third quarter 1997") from $151.6 million for the thirteen
weeks ended November 2, 1996 ("third quarter 1996"). The increase in net
sales in third quarter 1997 resulted primarily from the addition of 77
superstores, including the conversion of 17 traditional stores into superstores,
partially offset by the closing of 22 stores in the past year, and a comparable
store net sales increase of 10.2%. The comparable store net sales increase was
attributable to maturing superstores, increased advertising, and expanded
merchandise assortments in existing stores. The net increase in the Company's
store base accounted for approximately $29.6 million, or 73.7% of the net sales
increase, and $10.6 million, or 26.3% of the net sales increase, was
attributable to the increase in comparable store net sales.
Gross profit, defined as net sales less cost of sales including occupancy costs,
increased $11.0 million to $50.5 million in third quarter 1997 from $39.5
million in third quarter 1996. As a percentage of sales, gross profit increased
to 26.3% in third quarter 1997 from 26.0% in third quarter 1996. This increase
reflects greater purchasing leverage during the current period.
Selling, general and administrative expenses increased $18.6 million to $53.0
million in third quarter 1997 from $34.3 million in third quarter 1996.
Selling, general and administrative expenses in the third quarter 1997 include
charges of $11.0 million related to the acquisition of PetCare. Excluding these
charges, these expenses decreased to 21.9% of net sales in third quarter 1997
from 22.7% in third quarter 1996 primarily due to better cost controls at the
store level during the current period.
Merger and business integration costs of $22.5 million were recorded in third
quarter 1997 compared to $2.9 million in third quarter 1996.
Operating loss in third quarter 1997 was $25.0 million compared to an operating
income of $2.2 million in third quarter 1996. Operating income, excluding
merger and business integration costs and other charges, increased to $8.5
million or 4.4% of net sales in the third quarter 1997 from $5.1 million or 3.4%
of net sales in the third quarter 1996.
Net interest expense was $0.9 million for the third quarter 1997 compared to net
interest income of $0.1 million for the third quarter 1996.
Income tax benefit was $8.9 million in third quarter 1997, compared to income
taxes of $1.1 million in third quarter 1996. Income tax benefit reflects the
benefit of the loss before income taxes for the third quarter 1997.
Net loss was $17.0 million for the third quarter 1997 compared with a net income
of $1.1 million for the same period last year. Net earnings, excluding merger
and business integration costs and other charges and related tax benefits, on a
comparable basis, increased 45% to $4.5 million, or $0.22 per share, for the
third quarter 1997 compared to $3.1 million, or $0.15 per share, for the third
quarter 1996.
THIRTY-NINE WEEKS ENDED NOVEMBER 1, 1997 COMPARED TO THIRTY-NINE WEEKS ENDED
NOVEMBER 2, 1996
Net sales increased 25.5% to $538.1 million for the thirty-nine weeks ended
November 1, 1997 from $428.8 million for the thirty-nine weeks ended November 2,
1996. The increase in net sales resulted primarily from the addition of 77
superstores, including the conversion of 17 traditional stores into superstores,
partially offset by the closing of 22 stores in the past year, and a comparable
store net sales increase of 12.1%. The comparable store net sales increase was
attributable to maturing superstores, increased advertising and expanded
merchandise assortments in existing stores. The net increase in the Company's
store base accounted for approximately $75.5 million, or 69.1% of the net sales
increase, and $33.8 million, or 30.9% of the net sales increase, was
attributable to the increase in comparable store net sales.
Gross profit increased $29.1 million, or 26.7%, to $138.0 million for the
thirty-nine weeks ended November 1, 1997 from $108.9 million for the same
period last year. As a percentage of net sales, gross profit increased to 25.6%
for the thirty-nine weeks ended November 1, 1997 from 25.4% for the same period
last year. This increase reflects greater purchasing leverage during the
current period.
Selling, general and administrative expenses increased $33.6 million to $131.3
million in fiscal 1997 from $97.7 million for the same period last year.
Selling, general and administrative expenses in fiscal 1997 include charges of
$11.0 million related to the acquisition of PetCare. Excluding these charges,
these expenses decreased to 22.3% for the thirty-nine weeks ended
November 1, 1997 from 22.8% for the same period last year primarily due to
better cost controls at the store level during the current period.
Merger and business integration costs of $31.9 million were recorded in the
thirty-nine weeks ended November 1, 1997 compared to $17.9 million in the
thirty-nine weeks ended November 2, 1996.
Operating loss was $25.2 million for the thirty-nine weeks ended November 1,
1997, compared to an operating loss of $6.7 million in the same period last
year. Operating income, excluding merger and business integration costs and
other charges, on a comparable basis, increased to $17.7 million or 3.3% of net
sales for the thirty-nine weeks ended November 1, 1997 from $11.2 million or
2.6% of net sales for the same period last year.
Net interest expense increased to $2.1 million for the thirty-nine weeks ended
November 1, 1997 from $0.4 million for the same period last year.
Income tax benefit was $8.7 million in the thirty-nine weeks ended November 1,
1997 compared to income tax benefit of $2.0 million for the same period last
year. Income tax benefit primarily reflects the benefit of the loss before
incomes taxes.
Net loss was $18.5 million for the thirty-nine weeks ended November 1, 1997
compared to a net loss of $5.1 million for the same period last year. Net
earnings, excluding merger and business integration costs and other charges and
related tax benefits, on a comparable basis, increased 37% to $9.3 million, or
$0.45 per share, for the thirty-nine weeks ended November 1, 1997 compared to
$6.8 million, or $0.36 per share, for the thirty-nine weeks ended November 2,
1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations and expansion program through internal
cash flow, external borrowings and the sale of equity securities. At
November 1, 1997, total assets were $323.1 million, of which $118.9 million were
current assets. Net cash used in operating activities was $11.4 million for the
thirty-nine weeks ended November 1, 1997 and $7.2 million for the same period of
the prior year. The Company's sales are substantially on a cash basis,
therefore cash flow generated from operating stores provides a source of
liquidity to the Company. The principal use of operating cash is for the
purchase of merchandise inventories. A portion of the Company's inventory
purchases is financed through vendor credit terms.
The Company uses cash in investing activities to acquire stores, purchase fixed
assets for new and converted stores and, to a lesser extent, to purchase
warehouse and office fixtures, equipment and computer hardware and software in
support of its distribution and administrative functions. During the
thirty-nine weeks ended November 2, 1996 the Company acquired a retailer of pet
food and supplies with net cash of $7.6 invested in the acquisition of this
business. Cash used in investing activities was $41.3 million for the
thirty-nine weeks ended November 1, 1997 and $43.0 million for the same period
of the prior year.
The Company finances some of its purchases of equipment and fixtures through
capital leases and other obligations. Purchases of $0.7 million and $6.5
million of fixed assets were financed in this manner during the thirty-nine
weeks ended November 1, 1997 and November 2, 1996, respectively. The Company
believes that additional sources of capital lease and other financing are
available on a cost-effective basis and plans to use them, as necessary, in
connection with its expansion program.
The Company's primary long-term capital requirement is funding for the opening
or acquisition of superstores and the conversion of traditional stores into
superstores. During the thirty-nine weeks ended November 2, 1996, net proceeds
of $79.0 million were obtained from the issuance of common stock to provide
funds for the Company's expansion program, the acquisition of related businesses
and for working capital requirements.
The Company has a revolving credit facility with a commitment of up to $40.0
million which expires December 6, 1998. Borrowings under this facility are
unsecured and bear interest, at the Company's option, at either the bank's
reference rate or LIBOR plus 0.375% based on the Company's leverage ratio at
November 1, 1997. At November 1, 1997 the Company had outstanding borrowings
under this facility in the amount of $23.0 million. The revolving credit
facility contains certain affirmative and negative covenants related to debt,
interest and fixed charges coverage and consolidated net worth.
As of February 1, 1997, the Company had available net operating loss
carryforwards of $14.9 million for federal income tax purposes, which begin
expiring in 2004, and $8.9 million for state income tax purposes, which begin
expiring in 1997.
The Company anticipates that funds generated by operations, funds available
under the existing or a replacement revolving credit facility, currently
available vendor financing and capital lease and other financing will be
sufficient to finance its continued operations and planned store openings for at
the least the next twelve months.
CERTAIN CAUTIONARY STATEMENTS
Certain statements in this Quarterly Report on Form 10-Q that are not
historical fact constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results of the Company to be materially different
from historical results or from any results expressed or implied by such
forward-looking statements. These factors are discussed under the caption
"Certain Cautionary Statements" in the Company's Annual Report on Form 10-K for
the year ended February 1, 1997.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable
PART II. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
1. Exhibits
(a) 27.1 Financial Data Schedule (filed electronically only)
2. Reports on Form 8-K
(a) The Company filed no reports on Form 8-K during the thirteen weeks
ended November 1, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PETCO ANIMAL SUPPLIES, INC.
By: /s/ James M. Myers
James M. Myers
Senior Vice President Finance
and Chief Accounting Officer
Date: December 15, 1997
14
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-END> NOV-01-1997
<CASH> 3,828
<SECURITIES> 0
<RECEIVABLES> 13,210
<ALLOWANCES> 0
<INVENTORY> 98,993
<CURRENT-ASSETS> 118,897
<PP&E> 132,092
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<TOTAL-ASSETS> 323,134
<CURRENT-LIABILITIES> 111,819
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0
0
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<OTHER-SE> 180,565
<TOTAL-LIABILITY-AND-EQUITY> 323,134
<SALES> 538,143
<TOTAL-REVENUES> 538,143
<CGS> 400,123
<TOTAL-COSTS> 400,123
<OTHER-EXPENSES> 163,189
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,056
<INCOME-PRETAX> (27,225)
<INCOME-TAX> (8,698)
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<NET-INCOME> (18,527)
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