PetSmart (PETM) Approves 233% Increase in Dividend and $350 Million Stock Buyback Plan

June 23, 2009 4:33 PM EDT

PetSmart, Inc. (NASDAQ: PETM) announced the Board of Directors' approval to increase its quarterly dividend by 233% from $0.03 to $0.10 per share beginning in the second quarter of fiscal 2009. The Board of Directors also authorized a $350 million stock purchase plan that expires in January 2012.
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PetSmart's dividend increase and share purchase authorization follow an extensive analysis of PetSmart's expected free cash flows that confirmed our confidence in our current operating plan to:

-- Continue to grow the business, which includes growing new stores by about 40 per year for the foreseeable future with further room to grow in the footprint as well as continuing to reinvest in our existing stores to improve our comparable stores sales growth and gross margins.

-- Return significant cash to shareholders after investing in existing and new stores by increasing the quarterly dividend to $0.10 per share from $0.03, payable August 14, 2009, to shareholders of record at the close of business on July 31, 2009. This increase results in an indicated annual rate of $0.40 per share. In addition, the Board authorized a share purchase program allowing the company to opportunistically purchase shares of up to $350 million over the next 2.5 years.
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