Certain Relationships and Related Party Transactions

12 Months Ended

Jan. 30, 2022

Related Party Transactions [Abstract]

Certain Relationships and Related Party Transactions

Certain Relationships and Related Party Transactions

Certain of the Company’s pharmacy operations are conducted through a wholly-owned subsidiary of PetSmart for which the Company and PetSmart entered into a services agreement which provides for the payment of a management fee due from PetSmart. The Company recognized $25.5 million, $40.1 million and $41.1 million within net sales in the consolidated statements of operations for the services provided during Fiscal Year 2021, Fiscal Year 2020, and Fiscal Year 2019, respectively.

The Company’s consolidated financial statements include management fee expenses of $1.3 million allocated to the Company by PetSmart for organizational oversight and certain limited corporate functions provided by its sponsors for Fiscal Year 2020 and Fiscal Year 2019, respectively. Allocated costs are included within selling, general and administrative expenses in the consolidated statements of operations.

As of January 30, 2022 and January 31, 2021, the Company had a net receivable from PetSmart of $2.5 million and $21.9 million, respectively, which was included in prepaid expenses and other current assets on the Company’s consolidated balance sheets. During Fiscal Year 2019, an intercompany loan agreement with PetSmart was terminated which resulted in a $79.5 million reduction of the Company’s net receivable from PetSmart.

PetSmart Guarantees

PetSmart previously provided a guarantee of payment with respect to certain equipment and other leases that the Company entered into and served as a guarantor in respect of the Company’s obligations under a credit insurance policy in favor of certain of the Company’s suppliers. As of January 30, 2022, all such guarantees had been released, with the exception of guarantees pertaining to one of the Company’s lease agreements.