UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549
                     _____________________________

                               FORM 10-K

             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended                       Commission File Number:
   January 31, 1998                                     0-23574        

                       PETCO ANIMAL SUPPLIES, INC.
        (Exact Name of Registrant As Specified In Its Charter)

	    Delaware                                 33-0479906            	
  (State or Other Jurisdiction	   (I.R.S. Employer Identification No.)
Of Incorporation or Organization)

                9125 Rehco Road, San Diego, California 92121
      (Address, Including Zip Code, of Principal Executive Offices)

           Registrant's Telephone Number, Including Area Code:
                              (619) 453-7845

    Securities registered pursuant to Section 12(b) of the Act:  None

      Securities registered pursuant to Section 12(g) of the Act:
                  COMMON STOCK, $. 0001  PAR VALUE
                          (Title of Class)


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 by check mark if disclosure of delinquent filers in response to 
Item 405 of Regulation S-K is not contained herein, and will not be 
contained, to the best of the Registrant's knowledge, in definitive proxy 
or information statements incorporated by reference in Part III of this 
Form 10-K or any amendment to this Form 10-K:   ____  

As of April 24, 1998, there were outstanding 21,068,826 shares of the 
Registrant's Common Stock, $ .0001 par value.  As of that date, the 
aggregate market value of the voting stock held by non-affiliates of the 
Registrant was approximately $ 374,789,092. 

	Documents Incorporated By Reference: The information called for by 
Part III is incorporated by reference from the Proxy Statement relating to 
the 1998 Annual Meeting of Stockholders of the Registrant.


<PAGE> 1
                                PART I

ITEM 1.  BUSINESS

	PETCO Animal Supplies, Inc. ("PETCO" or the "Company") is a leading 
specialty retailer of premium pet food and supplies.  As of January 31, 
1998, the Company operated 457 stores, including 392 superstores, in 33 
states and the District of Columbia.  PETCO's strategy is to be the leading 
category-dominant national chain of community pet food and supply 
superstores by offering its customers a complete assortment of pet-related 
products at competitive prices, with superior levels of customer service at 
convenient locations.  The Company believes that this strategy provides 
PETCO with a competitive advantage by combining the broad merchandise 
selection and everyday low prices of a pet supply warehouse store with the 
convenience and service of a neighborhood pet supply store.

	PETCO currently utilizes both superstore and traditional store 
formats.  The Company's expansion strategy is to open and acquire 
superstores, including relocations, expansions or remodels of existing 
traditional stores into superstores (collectively referred to herein as 
"conversions"), and to close underperforming stores.  In fiscal 1997, the 
Company opened or acquired 141 stores and closed 20 stores.  Unless 
otherwise indicated, all references in this Annual Report 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 1997 refer to the 
fiscal year beginning on February 2, 1997 and ending on January 31, 1998.

THE PET FOOD, SUPPLY AND SERVICES INDUSTRY

	GENERAL.  In 1996, retail sales in the United States of pet food, 
supplies, small animals (excluding dogs and cats) and services were 
estimated at $18 billion.  Pet food accounted for the majority of this 
market with an estimated $10 billion in sales, pet supply and small animal 
sales were estimated at $4 billion, while sales of pet services, which 
include veterinary services, obedience training and grooming services, were 
estimated at $4 billion.  In 1996, an estimated 58 million households in 
the United States, or over half of all U.S. households, owned at least one 
pet and over half of pet-owning households owned more than one pet.  The 
Company believes that these numbers reflect important demographic changes 
occurring in the United States which have been favorable to the pet food 
and supply industry, such as an increase in families with young children 
and an increase in the number of "empty-nest" households with additional 
disposable income to spend on pets.

	PET FOOD.  Historically, the pet food industry has been dominated by 
national supermarket brands such as Alpo, Kal Kan and Purina, which are 
primarily sold through grocery stores, convenience stores and mass 
merchants.  These brands are generally considered less nutritious than 
premium brands and sell at lower prices.  Until the early 1980s, such 
brands had little retail competition from specialty pet food manufacturers.  
However, over the past five years, sales of national supermarket brands 
have represented a decreasing percentage of the total annual pet food sales 
as premium food such as Iams, Nutro, and Science Diet, which are not 
available through supermarkets or mass merchants due to manufacturers' 
restrictions, has increased in popularity.  Sales of premium pet food are 
estimated to have increased at a compound annual growth rate of 
approximately 18% in recent years and now account for an estimated 25% of 
the total pet food market.  The Company believes that premium pet food 
sales have increased due to the changing demographics discussed above, the 
increasing concern for animal welfare and nutrition, recommendations by 
veterinarians and breeders and the increasing availability and variety of 
premium pet food products.  As one of the leading specialty premium pet 
food retailers in the country, PETCO believes that it is in an excellent 
position to capitalize on these trends.


<PAGE> 2
	PET SUPPLIES.  The Company believes that the growing preference for 
premium pet food has also affected the pet supply industry.  As consumers 
focus on pet health and nutrition, they tend to purchase more and higher 
quality pet supplies, particularly vitamins and veterinary products.  Pet 
supplies are often an impulse purchase made during a customer's regular 
visit to purchase pet food, cat litter or flea control products.  The 
Company believes that demand for pet supplies is less price sensitive than 
the demand for pet food.  Consequently, pet supply products are less 
frequently discounted, resulting in higher gross margins.  For these 
reasons, the pet supply industry has attracted strong interest from 
supermarkets, although due to space constraints, supermarkets tend to carry 
a limited assortment of basic items such as cat litter, collars, dog chews, 
leashes, flea collars and toys.  Pet supply stores such as PETCO, on the 
other hand, carry a wider variety of these basic items and a wide 
assortment of other supplies, which also includes grooming products, pet 
carriers, cat furniture, dog houses, vitamins, treats and veterinary 
products.  The Company believes that sales of supplies at specialty stores 
should continue to increase due to the wide variety of products and the 
high level of customer service available at such stores and the growing 
preference for premium pet food.

	SMALL ANIMALS.  The market for small animals (other than dogs and 
cats) includes sales of fish, birds, reptiles, rabbits, hamsters, mice and 
other small pets.  Because of the overpopulation of dogs and cats and the 
inhumane practices of some breeders, the Company has elected to limit its 
selection of animals to birds, fish, reptiles and other small animals.  
PETCO does, however, participate in pet adoption programs for dogs and 
cats, which are administered through local animal welfare programs.  The 
Company purchases small animals only through domestic breeders.

	PET SERVICES.  The market for pet services includes veterinary 
services, obedience training and grooming services.  The Company offers 
only limited veterinary services such as routine vaccinations.  The Company 
does offer obedience training in most of its stores and offers grooming in 
many of its stores.  Although such services do not generate a significant 
portion of the Company's revenues, the Company believes that offering 
selected pet services does create increased customer traffic in the 
Company's stores.

BUSINESS STRATEGY

	PETCO's strategy is to be the leading category-dominant national 
chain of community pet food and supply superstores by offering its 
customers a complete assortment of pet-related products at competitive 
prices, with superior levels of customer service at convenient locations.  
The key components of PETCO's strategy are:

	Superstore Expansion.  The Company believes that opportunities for 
additional superstores exist in both new and existing markets.  The Company 
intends to continue to increase the number of superstores it operates by 


<PAGE> 3
opening and acquiring superstores in new and existing markets and 
converting traditional stores into superstores.

	ACQUISITIONS.  A significant part of the Company's expansion strategy 
is to capitalize on the consolidation of the fragmented pet food and supply 
industry.  The Company believes that there are acquisition opportunities 
which would allow the Company to attract new customers in existing markets, 
enter new markets and leverage operating costs.  Generally, the Company 
seeks to acquire established and well-located stores or chains of stores 
which are similar in size and format to the Company's existing superstores.  
Consistent with this strategy, the Company has completed 17 acquisitions, 
representing 204 stores located in 27 states, since the Company's initial 
public offering in March 1994.

	COMPLETE MERCHANDISE ASSORTMENT.  PETCO's prototype 15,000 square 
foot superstores carry a complete merchandise assortment of more than 
10,000 active SKUs of high quality pet-related products.  PETCO's products 
include premium pet food, fish, birds, reptiles and other small animals and 
related food and supplies, collars and leashes, grooming products, toys, 
pet carriers, cat furniture, dog houses, vitamins, treats and veterinary 
supplies.  PETCO's traditional stores, which average 3,500 square feet, 
also carry a wide variety of premium pet food and supplies (approximately 
5,000 active SKUs).

	COMPETITIVE PRICES.  PETCO's pricing strategy is to offer everyday 
low prices on all food items which are important in attracting and 
retaining customers.  The Company believes that offering competitive prices 
on food items increases customer traffic and generates sales of high-margin 
supplies.

	SUPERIOR CUSTOMER SERVICE.  Providing knowledgeable and friendly 
customer service is a key aspect of PETCO's business strategy.  Most PETCO 
store managers and sales associates are better able to assist customers 
with their needs because they are pet owners and enthusiasts.  PETCO 
emphasizes the training and development of its personnel, and the Company 
believes that this enables it to attract and retain highly motivated, well-
qualified store managers and sales associates committed to providing 
superior levels of customer service.

	CONVENIENT STORE LOCATIONS.  PETCO's stores are located in high-
traffic retail areas with ample parking, often in community shopping 
centers anchored by a large supermarket.  The Company selects sites which 
are characterized by weekly or more frequent shopping patterns.  All stores 
offer extended shopping hours and are open seven days a week. 

	ENJOYABLE SHOPPING EXPERIENCE.  PETCO's stores are attractively 
designed to create a fun and exciting shopping environment for customers 
and their pets.  The Company's superstores are brightly illuminated with 
colorful fixtures and graphics and feature prominent and attractive 
signage. Superstores feature an assortment of fish, aquarium systems, 
reptiles, birds and small animals.  Birds and other animals are available 
for demonstration by PETCO employees and for handling by customers.  Many 
of the Company's superstores also contain a glassed-in grooming area that 
allows customers to observe the grooming process while they shop.

	INNOVATIVE COMMUNITY PROGRAMS.  PETCO has several long-standing 
neighborhood marketing programs in effect designed to introduce consumers 


<PAGE> 4
to its stores and maintain long-term customer and community relationships.  
Due to the large numbers of dogs and cats available at local animal 
shelters, PETCO's long-standing corporate policy has been to encourage its 
customers to adopt these pets from animal shelters.  On designated days, in 
cooperation with animal welfare organizations, the Company offers pet 
adoption services at its stores.  The Company's other community programs 
include in-store vaccination clinics, programs with local pet-related 
charities, a product sample program to introduce consumers and their pets 
to premium food and supplies and a preferred customer program.  In 
addition, the Company maintains referral programs and other relationships 
with local breeders and veterinarians.

MERCHANDISING

	COMPLETE MERCHANDISE ASSORTMENT.  Management believes that PETCO 
stores offer the pet owner one of the most complete and exciting 
assortments of pet products and services available in the marketplace.  
PETCO's products and services generally fall into five main categories.

	PET FOOD.  PETCO offers a complete assortment of leading name brand 
premium food for dogs and cats, such as Iams, Nutro, and Science Diet as 
well as selected mass brand foods.  Due to manufacturers' restrictions, 
premium brands are not currently sold through supermarkets, warehouse 
clubs, or mass merchants, but are sold exclusively through specialty pet 
stores and veterinarians.  The Company also offers a PetGold(r) private 
label brand of premium dog and cat food.  In addition to food for dogs 
and cats, the Company features a variety of treats and rawhide chew 
items.  The Company also sells an extensive variety of food for fish, 
birds, reptiles and small animals.

	PET SUPPLIES.  PETCO's broad assortment of supplies for dogs and cats 
includes many private label items and offers collars and leashes, 
grooming products, toys, pet carriers, cat furniture, dog houses, 
vitamins, treats and veterinary supplies.  The Company also offers broad 
lines of supplies for other pets, including aquariums, filters, bird 
cages and supplies for small animals.

	SMALL ANIMALS.  PETCO superstores feature specialty departments which 
stock a large assortment of fish, domestically bred birds, reptiles and 
other small pets.  The stores' animal selection typically includes 
cockatiels, parakeets and finches in the bird category; iguanas, turtles 
and snakes in the reptile category; and hamsters, rats and mice in the 
small animal category.  Birds and other animals are available for 
demonstration by PETCO employees and handling by customers.  The Company 
believes that its small animal displays add excitement to shopping at 
PETCO and generate increased sales of high-margin small animals and 
related food and supplies.

	GROOMING AND OTHER SERVICES.  Professional grooming is available at 
many of the Company's superstores.  Grooming services are performed in 
glass-walled stations in the stores to provide an eye-catching display 
and to increase customer awareness and confidence in the service.  In 
addition, the Company offers vaccinations and obedience training.

	NOVELTY ITEMS.  PETCO carries a variety of novelty items, including 
apparel for pets, calendars, as well as other pet-related merchandise.  In 


<PAGE> 5
addition, the Company features a variety of seasonal and holiday pet 
items.

	COMPETITIVE PRICES.  PETCO's pricing strategy is to offer everyday 
low prices on all food items which are important in attracting and 
retaining customers.  The Company believes that offering competitive prices 
on key food items increases customer traffic and generates sales of higher-
margin pet supplies.  PETCO's large buying volume and sophisticated 
distribution network allows it to compete effectively on price.  The 
Company modifies its pricing policies by regional or local markets and is 
able to institute overnight price changes, as necessary, to meet market 
competition.  PETCO's price guarantee program offers to match all 
competitors advertised prices.


STORE DEVELOPMENT

	The Company utilizes both superstore and traditional store formats.  
The Company plans to open only superstores in the future and expects that 
these will be the Company's current prototype superstores which average 
approximately 15,000 square feet.  These prototype superstores offer fish, 
birds, reptiles and other small animals, and grooming services.  Overall, 
the Company's superstores average approximately 13,000 square feet in size.  
The Company's traditional stores average approximately 3,500 square feet in 
size and generally do not sell fish, birds, reptiles or small animals.

	The Company's experience indicates that its superstore format 
achieves increased customer traffic, sales volume and profitability 
compared to its traditional stores.  As a result, the Company intends to 
continue to increase the number of superstores it operates by opening and 
acquiring superstores in new and existing markets and converting 
traditional stores into superstores.

	Although the Company does not plan to open any new traditional stores 
in the future, it will continue to operate profitable and well-situated 
traditional stores until such time as they may be converted into 
superstores.

	In fiscal 1997, the Company opened or acquired 141 stores and closed 
20 stores.  The table below sets forth the number of each type of store the 
Company operated at the end of each fiscal year indicated, as restated for 
the pooling of interests with PetCare Plus, Inc. ("PetCare").

<TABLE>
<S>                                     <C>          <C>       <C>
                                                 Traditional
                                    Superstores     Stores    Total Stores
                                    -----------  -----------  ------------
Fiscal 1993                             108          139	      247
Fiscal 1994                             174          114          288
Fiscal 1995                             264           89          353
Fiscal 1996                             345           68          413
Fiscal 1997                             392           65          457
</TABLE>

	PETCO attempts to obtain convenient, high-traffic stores located in 
prime community shopping centers.  The Company undertakes substantial 
market research prior to entering new markets.  Key factors in market and 
site selection include high visibility, easy access, ample parking, 
population, demographics and the number and location of competitors.



<PAGE> 6
PURCHASING AND DISTRIBUTION

	The Company's centralized purchasing and distribution system 
minimizes the delivered cost of merchandise and maximizes the in-stock 
position of its stores.
 
	PETCO purchases most of its merchandise directly from specialty 
suppliers and manufacturers of national brands.  The Company purchases the 
majority of its pet food products from three vendors, Iams, Nutro, and 
Science Diet, the first of which supplied products that accounted for more 
than 10% and less than 15% of the Company's sales in fiscal 1997.  While 
the Company does not maintain long-term supply contracts with any of its 
vendors, PETCO believes that it enjoys a favorable and stable relationship 
with each of these vendors.

	PETCO currently operates three central and five regional distribution 
centers.  The central distribution centers are located in Rancho Cucamonga, 
California; Dayton, New Jersey; and Aurora, Illinois.  Bulk items for all 
stores are either shipped to regional distribution centers for 
redistribution or are sent directly to store locations.  Manufacturers ship 
non-bulk supplies to the central distribution facilities which the Company 
then distributes either to regional centers or directly to store locations.  
Management believes that its centralized distribution system enables its 
stores to maximize selling space by reducing necessary levels of safety 
stock carried in each store.

COMPETITION

	The pet food and supply business is highly competitive.  This 
competition can be categorized into four different segments: (i) 
supermarkets and other mass merchants, (ii) single store and conventional 
pet shops, (iii) specialty pet supply chains and (iv) pet supply warehouse 
stores.  Many of the premium pet food brands offered by the Company, such 
as Iams, Nutro, and Science Diet, are not available to grocery stores or 
other mass merchants due to manufacturers' restrictions.  The Company 
believes that the principal competitive factors influencing the Company's 
business are product selection and quality, convenient store locations, 
customer service and price. The Company believes that PETCO competes 
effectively within its various geographic areas; however, some of the 
Company's competitors are much larger in terms of sales volume and have 
access to greater capital and management resources than the Company.

	The pet food and supply industry has been characterized in recent 
years by the consolidation of a number of pet supply chains.  This 
consolidation has been accomplished through the acquisition of independent 
pet stores by larger specialty pet supply chains or pet supply warehouse 
chains and the acquisition of these larger chains by similar competitors.  
The Company believes this consolidation trend may have a positive impact on 
industry conditions as store capacity may be rationalized, both in existing 
and in new units.  There can be no assurance that in the future the Company 
will not face greater competition from other national or regional 
retailers.



<PAGE> 7
TRADEMARKS AND LICENSES

	The Company has registered several service marks and trademarks with 
the United States Patent and Trademark Office, including PETCO(r), PETCO 
Pals(tm), Advantage Pet Products(r), Aquatic Gardens(r), Avian Select(r), 
Finishing Touch(r), Mighty Marble(r), Paw Pals(r), PetGold(r), Ruff 
Toys(r), Small Animal Kingdom(r), Where the Pets Go(tm) and Your Pet's 
Second Best Friend(r).  The Company believes the PETCO trademark has become 
an important component in its merchandising and marketing strategy.  The 
Company believes it has all licenses necessary to conduct its business.

REGULATION

	The transportation and sale of small animals is governed by various 
state and local regulations.  To date, these regulations have not had a 
material effect on the Company's business or operations.  The Company's 
fish and small animal buyers and real estate department are responsible for 
compliance with such regulations.  Prior to the opening of each store, the 
Company's fish and small animal buyers and real estate department review 
the regulations of the relevant state and local governments.  The Company's 
fish and small animal buyers and real estate department then ensure ongoing 
compliance by keeping abreast of industry publications and maintaining 
contacts with the Company's fish and small animal suppliers and the 
appropriate regulatory agency within each such state and local government.

EMPLOYEES

	As of January 31, 1998, the Company employed approximately 9,400 
associates, of whom approximately 4,200 were employed full-time.  
Approximately 93% of the Company's employees were employed in stores or in 
direct field supervision, approximately 3% in distribution centers and 
approximately 4% in the corporate office in San Diego.  Management believes 
its labor relations are generally good.


CERTAIN CAUTIONARY STATEMENTS

	Certain statements in this Annual Report, including, but not limited 
to, Item 7 - "Management's Discussion and Analysis of Financial Condition 
and Results of Operations," contain certain forward-looking statements 
within the meaning of Section 27A of the Securities Act of 1933, as 
amended, Section 21E of the Securities Act of 1934, as amended, and the 
Private Securities Litigation Reform Act of 1995, that are not historical 
facts but rather reflect current expectations concerning future results and 
events.  The words "believes," "expects," "intends," "plans," 
"anticipates," "likely," "will," and similar expressions identify such 
forward-looking statements.  These forward-looking statements are subject 
to risks, uncertainties, and other factors, some of which are beyond the 
Company's control, that could cause actual results to differ materially 
from those forecast or anticipated in such forward-looking statements.  
Such risks, uncertainties and other factors include, but are not limited 
to, the following risks:

	EXPANSION PLANS.  The Company's continued growth depends, to a 
significant degree, on its ability to open and operate new superstores on a 
profitable basis and to a lesser extent on increasing sales in existing 
stores.  The Company's performance is also dependent upon a number of other 


<PAGE> 8
factors, including its ability to locate and obtain favorable superstore 
sites and negotiate acceptable lease terms, to obtain and distribute 
adequate product supplies to its stores, to hire and train employees and to 
upgrade its management information and other operating systems to control 
the anticipated growth and expanded operations.  There can be no assurance 
that the Company will achieve its planned expansion or that such expansion 
will be profitable.  The Company has recently opened stores in new markets 
and plans to open additional stores in  new markets.  The performance of 
new stores may be adversely affected by regional economic conditions.  The 
Company's expansion strategy could have the effect of drawing customers 
from its existing stores.  In addition, average store contribution and 
operating margins may be adversely affected in the near term due to the 
level of preopening expenses and lower anticipated sales volumes of its 
immature stores.  The Company's existing Senior Credit Facility (the 
"Credit Facility") contains certain covenants which may restrict or impair 
the Company's growth plans.  Management continues to evaluate the Company's 
long-term distribution needs to increase product handling capacity to 
accommodate store and sales growth beyond fiscal 1998.  Either the 
Company's failure to expand its distribution facilities in accordance with 
its growth plans or difficulties incurred in operating its distribution 
facilities could adversely affect the Company's ability to deliver 
merchandise to its stores in a timely fashion.

	INTEGRATION OF OPERATIONS AS THE RESULT OF ACQUISITIONS.  If the 
Company is to realize the anticipated benefits of its past acquisitions, 
the operations of the acquired companies must be integrated and combined 
efficiently.  The process of rationalizing stores, supply and distribution 
channels, computer and accounting systems and other aspects of operations, 
while managing a larger and geographically expanded entity, presents a 
significant challenge to the Company's management.  There can be no 
assurance that the integration process will be successful or that the 
anticipated benefits of these acquisitions will be fully realized.  The 
dedication of management resources to integration efforts may detract 
attention from the day-to-day business of the Company.  The difficulties of 
integration may be increased by the necessity of coordinating 
geographically separated organizations, integrating personnel with 
disparate business backgrounds and combining different corporate cultures.  
There can be no assurance that the Company will be able to achieve any 
expense reductions with the acquired companies, that there will not be 
substantial costs associated with any such reductions, that such reductions 
will not result in a decrease in revenues or that there will not be other 
material adverse effects of these integration efforts.  Such effects could 
materially reduce the short-term earnings of the Company.  In fiscal 1996 
and 1997, merger and business integration costs of $37.2 million and $38.7 
million, respectively, were recorded by the Company following acquisition 
activities, including transaction costs, costs attributable to lease 
cancellation and closure of duplicate or inadequate facilities and 
activities, reformatting, facility conversion and other integration costs, 
severance, and other costs.  The Company expects to incur additional 
business integration costs in subsequent periods to reflect costs 
associated with its previous acquisitions.  In addition, the Company may 
make additional acquisitions in the future, which may result in additional 
costs.  Acquisitions require significant financial and management resources 
both at the time of the transaction and during the process of integrating 
the newly acquired business into the Company's operations.  The Company's 
operating results could be adversely affected if the Company is unable to 
successfully integrate such new companies into its operations.  Future 


<PAGE> 9
acquisitions by the Company could also result in potentially dilutive 
issuances of securities, incurrence of additional debt and contingent 
liabilities, and amortization expenses related to goodwill and other 
intangible assets, which could materially adversely affect the Company's 
profitability.

	RELIANCE ON VENDORS AND PRODUCT LINES AND EXCLUSIVE DISTRIBUTION 
ARRANGEMENTS.  The Company purchases significant amounts of products from 
three key vendors, Iams, Nutro, and Science Diet, the first of which 
supplied products that accounted for more than 10% and less than 15% of the 
Company's sales in fiscal 1997.  The Company does not maintain long-term 
supply contracts with any of its vendors and the loss of any of these 
vendors or other significant vendors of premium pet food or pet supplies 
offered by the Company could have a material adverse effect on the Company.  
In addition, it would materially adversely affect the Company if any of 
these manufacturers of premium pet food were to make their products 
available in supermarkets or through other mass merchants, or if the 
premium brands currently available to such supermarkets and mass merchants 
were to increase their market share at the expense of the premium brands 
sold only through specialty pet food and supply retailers.  The Company's 
principal vendors currently provide the Company with certain incentives 
such as volume purchasing, trade discounts, cooperative advertising and 
market development funds.  A reduction or discontinuance of these 
incentives could also have a material adverse effect on the Company.

	COMPETITION.  The pet food and supply retailing industry is highly 
competitive.  The Company competes with a number of pet supply warehouse 
stores, smaller pet store chains and independent pet stores.  The Company 
also competes with supermarkets and other mass merchants.  Many of the 
Company's competitors are larger and have significantly greater resources 
than the Company.  If any of the Company's major competitors seek to gain 
or retain market share by reducing prices, the Company may be required to 
reduce its prices on key items in order to remain competitive, which may 
have the affect of reducing its profitability.  There is no assurance that 
in the future the Company will not face greater competition from other 
national, regional and local retailers.

	PERFORMANCE OF NEW SUPERSTORES; FUTURE OPERATING RESULTS.  The 
Company has recently opened and acquired superstores in new markets and 
plans to open and acquire additional superstores in other new markets.  
There can be no assurance that these stores will be profitable in the near 
term or that profitability, if achieved, will be sustained.  In addition, 
there can be no assurance that the Company's existing stores will maintain 
their profitability or that new stores will generate sales levels necessary 
to achieve store-level profitability, much less profitability comparable to 
that of existing stores.  The Company's comparable store net sales 
increases were 16.5%, 16.1%, and 11.5% for fiscal 1995, 1996 and 1997, 
respectively.  The Company anticipates that its rate of comparable stores 
sales growth may be lower in future periods than the growth rate previously 
experienced due to maturation of the existing store base and the effects of 
opening additional stores in existing markets.  As a result of the 
Company's rapid expansion, the Company expects its average store 
contribution and operating margins to be lower in the near term due to the 
level of preopening expenses and the lower anticipated sales volume of its 
immature stores.  In addition, certain costs, such as those related to 
occupancy, are expected to be higher in some of the new geographic markets 
that the Company has recently entered.  Finally, due in part to recent 



<PAGE> 10
acquisitions, period-to-period comparisons of financial results may not be 
meaningful and the results of operations for historical periods may not be 
indicative of future results.

	QUARTERLY AND SEASONAL FLUCTUATIONS.  The timing of new store 
openings, related preopening expenses and the amount of revenue contributed 
by new and existing stores may cause the Company's quarterly results of 
operations to fluctuate.  The Company's business is also subject to some 
seasonal fluctuation.  Historically, the Company has realized a higher 
portion of its net sales during the month of December than during the other 
months of the year.

	DEPENDENCE ON SENIOR MANAGEMENT.  The Company is dependent upon the 
efforts of its principal executive officers.  In particular, the Company is 
dependent upon the management and leadership of Brian K. Devine, Chairman, 
President and Chief Executive Officer.  The loss of Mr. Devine or certain 
of the Company's other principal executive officers could materially 
adversely effect the Company's business.  The Company has entered into an 
employment agreement with Mr. Devine which provides for an indefinite term 
and which may be terminated by Mr. Devine on 90 days' notice.  The Company 
has obtained a key man insurance policy on the life of Mr. Devine in the 
amount of $1.0 million, of which the Company is the sole beneficiary.  The 
Company's success will depend on its ability to retain its current 
management and to attract and retain qualified personnel in the future.

	POSSIBLE VOLATILITY OF STOCK PRICE.  Since the initial public 
offering of the Company's common stock in March 1994, the market value of 
the common stock has been subject to significant fluctuations.  The market 
price of the common stock may continue to be subject to significant 
fluctuations in response to operating results and other factors.  In 
addition, the stock market in recent years has experienced price and volume 
fluctuations that often have been unrelated or disproportionate to the 
operating performance of companies.  These fluctuations, as well as general 
economic and market conditions, may adversely affect the market price of 
the common stock.  

	Readers are cautioned not to place undue reliance on forward-looking 
statements which reflect management's view only as of the date of this 
Annual Report.  The Company undertakes no obligation to publicly release 
the result of any revisions to these forward-looking statements which may 
be made to reflect events or circumstances after the date hereof or to 
reflect the occurrence of unanticipated events.

ITEM 2.  PROPERTIES

	The Company leases substantially all of its store and warehouse 
locations.  Original lease terms for the Company's 457 stores generally 
range from five to twenty years, many of which contain renewal options.  
Leases on 126 stores expire within the next three years, with leases on 88 
of these stores containing renewal options.

	

<PAGE> 11
The table below shows the location and number of the Company's stores as of 
January 31, 1998.
<TABLE>
<S>                              <C>              <C>              <C>
                                              Traditional
  Location                   Superstores         Stores        Total Stores
------------------------     -----------      -----------      ------------
Alabama	                       1               1	               2  
Arizona                           12	         0                12
Arkansas                           2               0                 2
California                       101              38               139
Colorado                           7               0                 7
Connecticut                       11               0                11
District of Columbia               1               0                 1
Idaho                              1               0                 1
Illinois                          39               6                45 
Indiana                            2               0                 2 
Iowa                               6               0                 6
Kansas                             9               0                 9
Kentucky                           1               0                 1  
Maryland                           6               0                 6
Massachusetts                     14               3                17
Michigan                           7               0                 7
Minnesota                         17               0                17
Missouri                          12               2                14
Nebraska                           2               0                 2
Nevada                             4               0                 4
New Hampshire                      3               0                 3
New Jersey                        13               1                14
New York                          14               1                15
North Dakota                       2               0                 2
Ohio                               3               0                 3
Oregon                             9               2                11
Pennsylvania                      14               3                17
Rhode Island                       1               0                 1
South Dakota                       1               0                 1
Tennessee                          5               0                 5
Texas                             39               0                39
Virginia                           7               1                 8
Washington                        19               7                26
Wisconsin                          7               0                 7
                                 ---              --               ---
                                 392              65               457
                                 ===              ==               ===
</TABLE>
	The Company's headquarters, located in San Diego, California, occupy 
approximately 70,000 square feet of office space which is financed under an 
obligation which expires February 2006.  The Company's five regional 
distribution centers collectively occupy over 200,000 square feet of space 
in Arlington, Texas; Stockton, California; Portland, Oregon; Mansfield, 
Massachusetts; and New Hope, Minnesota under leases which expire in August 
1999, December 2000, January 2002, December 1998, and September 2002, 
respectively.  The Company's three central distribution centers 
collectively occupy over 460,000 square feet of space in Rancho Cucamonga, 
California; Dayton, New Jersey; and Aurora, Illinois under leases which 
expire in May 1999, June 2002, and April 1998, respectively. The Company 
has entered into leases for two new central distribution centers to replace 
the centers located in Rancho Cucamonga, California and Aurora, Illinois.  
These two central distribution centers collectively occupy over 580,000 
square feet of space in Mira Loma, California and Joliet, Illinois, under 
leases which expire in August 2005 and April 2005, respectively.  Each of 


<PAGE> 12
the other distribution center leases contains a renewal option. The Company 
expects to expend approximately $7.0 million to provide the additional 
capacity to accommodate the Company's current expansion plans.

ITEM 3.  LEGAL PROCEEDINGS

	PETCO is not a party to any legal proceedings other than various 
claims and lawsuits arising in the normal course of its business which, in 
the opinion of the Company's management, are not individually or in the 
aggregate material to its business.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

	No matters were submitted to a vote of the Company's stockholders 
during the fourth quarter of the fiscal year ended January 31, 1998.



<PAGE> 13
ITEM 4.1.  EXECUTIVE OFFICERS OF THE COMPANY

	The executive officers of the Company are as follows:

      Name            Age                     Position
--------------------  ---   -----------------------------------------------
Brian K. Devine        56   Chairman, President and Chief Executive Officer
Bruce C. Hall          53   Executive Vice President - Operations
Richard C. St. Peter   49   Executive Vice President - Administration and 
                            Chief Financial Officer
Larry D. Asselin       50   Senior Vice President - Merchandising and  
                            Distribution
Janet D. Mitchell      42   Senior Vice President - Human Resources and  
                            Administration
James M. Myers         40   Senior Vice President - Finance
William M. Woodard     49   Senior Vice President - Store Operations

	BRIAN K. DEVINE, Chairman, President and Chief Executive Officer 
joined the Company in August 1990 and has served as Chairman since January 
1994.  Prior to joining the Company, Mr. Devine was President of Krause's 
Sofa Factory, a furniture retailer and manufacturer, from 1988 to 1989.  
From 1970 until 1988, Mr. Devine held various positions with Toys 'R' Us, a 
retailer of children's toys, including Senior Vice President, Director of 
Stores; and Senior Vice President, Growth, Development and Operations.  Mr. 
Devine graduated from Georgetown University with a degree in economics.

	BRUCE C. HALL, Executive Vice President, Operations, joined the 
Company in April 1997.  Mr. Hall spent his entire career of 34 years from 
1963 to 1997 with Toys 'R' Us, a retailer of children's toys, where he 
progressively advanced from field operations through a number of positions 
and most recently served as Senior Vice President of Operations.

	RICHARD C. ST. PETER, Executive Vice President, Administration and 
Chief Financial Officer, joined the Company in September 1990.  From 1986 
to 1990, Mr. St. Peter was Vice President and Chief Financial Officer at 
Stor, a furniture retailer.  From 1982 to 1986, Mr. St. Peter held various 
positions at W.R. Grace's Home Centers, which operated 90 retail stores, 
including Vice President and Chief Financial Officer.  From 1980 to 1982, 
Mr. St. Peter was Controller at Smart & Final, a 120-store grocery 
retailer.  From 1971 to 1980, Mr. St. Peter was employed by Alpha Beta, a 
grocery retailer and a division of American Stores, where he held a number 
of positions including Controller.  Mr. St. Peter received a bachelor's 
degree from California State University at Long Beach and an MBA from the 
University of Southern California.

	LARRY D. ASSELIN, Senior Vice President, Merchandising and 
Distribution, joined the Company in April 1991.  Prior to that time, 
beginning in 1987, Mr. Asselin was Vice President and General Merchandising 
Manager at Oshman's, a sporting goods retailer.  From 1969 to 1987, Mr. 
Asselin was in various positions including Division Merchandising Manager 
at Foley's Department Stores, a division of Federated Department Stores.  
Mr. Asselin received a marketing degree from the University of Arkansas.

	JANET D. MITCHELL, Senior Vice President, Human Resources and 
Administration joined the Company in February 1989.  From 1981 to 1989, Ms. 
Mitchell held various management positions in human resources with the 
Southland Corporation's 7-Eleven division.  From 1978 to 1981, Ms. Mitchell 


<PAGE> 14
held various positions with the El Torito Restaurant chain.  Ms. Mitchell 
received a bachelor's degree from California State University, San Diego.

	JAMES M. MYERS, Senior Vice President, Finance joined the Company in 
May 1990.  From 1994 to 1996, Mr. Myers served as Vice President, Finance 
and prior to that as Vice President and Controller of the Company.  From 
1980 to 1990, Mr. Myers held various positions at the accounting firm KPMG 
Peat Marwick LLP, including Senior Audit Manager.  Mr. Myers is a CPA and 
received an accounting degree from John Carroll University.

	WILLIAM M. WOODARD, Senior Vice President, Store Operations, joined 
the Company in January 1991.  From 1987 to 1990, Mr. Woodard was Vice 
President, Director of Marketing at J. M. Jones, Inc., a wholesale division 
of SuperValu Stores, Inc.  From 1970 to 1987, Mr. Woodard was employed by 
Safeway Stores, Inc., a grocery retailer, in a number of positions 
including Retail Operations Manager and Marketing Operations Manager.  Mr. 
Woodard holds an administrative management degree from North Texas State 
University and an MBA in marketing from the University of Southern 
California.


PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER    
         MATTERS

	The Company's common stock, $.0001 par value is quoted on The Nasdaq 
National Market under the symbol "PETC."  Public trading of the common 
stock commenced on March 17, 1994.  The following table sets forth for the 
periods indicated the high and low reported sale prices per share for the 
common stock as reported by The Nasdaq National Market.  The table reflects 
the three-for-two split of the common stock effected in the form of a stock 
dividend on April 15, 1996.
<TABLE>
    <S>                                 <C>          <C>
                                         High          Low
    FISCAL 1996                         ------       ------
    First Quarter                       $32.67       $20.50
    Second Quarter                       29.25        21.63
    Third Quarter                        29.00        21.50
    Fourth Quarter                       26.00        18.75

    FISCAL 1997
    First Quarter                       $28.25       $19.00
    Second Quarter                       30.75        19.63
    Third Quarter                        33.00        26.25
    Fourth Quarter                       31.13        19.50
</TABLE>
	On April 24, 1998, there were 704 shareholders of record of the 
Company's common stock.

	The Company has never paid cash dividends on its common stock.  The 
Company currently anticipates that it will retain all available funds for 
use in the operation and expansion of its business and does not anticipate 
paying any cash dividends in the foreseeable future.



<PAGE> 15
ITEM 6.  SELECTED FINANCIAL DATA
         (in thousands, except per share, store and square foot data)

	The following table sets forth selected consolidated financial and 
operating data for the Company for the five-year period ended January 31,  
1998.  The selected consolidated financial data presented below under the 
caption "Income Statement Data" for the two-year period ended January 28, 
1995 is derived from the unaudited consolidated financial statements of the 
Company and its subsidiaries as restated to reflect the poolings of 
interests during the years ended February 1, 1997 and  January 31, 1998.  
The selected consolidated financial data presented below under the caption 
"Income Statement Data" for the three-year period ended January 31, 1998 is 
derived from the audited consolidated financial statements of the Company 
and its subsidiaries.  The selected consolidated financial data presented 
below under the caption "Balance Sheet Data" as of January 29, 1994, 
January 28, 1995, and February 3, 1996 is derived from the unaudited 
consolidated financial statements of the Company and its subsidiaries as 
restated to reflect the poolings of interests during the years ended 
February 1, 1997 and January 31, 1998.  The selected consolidated financial 
data presented below under the caption "Balance Sheet Data" as of February 
1, 1997 and January 31, 1998 is derived from the audited consolidated 
financial statements of the Company and its subsidiaries.  The financial 
data set forth below should be read in conjunction with "Management's 
Discussion and Analysis of Financial Condition and Results of Operations" 
and the Consolidated Financial Statements as of January 31, 1998 and for 
each of the years in the three-year period ended January 31, 1998 and the 
independent auditors' report thereon, included and incorporated by 
reference elsewhere in this Annual Report.
 
  
<TABLE>                                                                      
<S>                                                     <C>        <C>        <C>        <C>        <C>
                                                                        Historical
                                                   ----------------------------------------------------- 
                                                                    Fiscal Year Ended
                                                   -----------------------------------------------------                
                                                    Jan.29,    Jan. 28,    Feb 3,    Feb. 1,   Jan. 31,
                                                     1994       1995       1996      1997        1998 
                                                   --------   --------   --------   --------   --------  
INCOME STATEMENT DATA:
Net sales                                          $224,979   $313,809   $443,585   $600,637   $749,789
Cost of sales and occupancy costs(1)                169,831    234,400    337,873    446,315    553,566 
                                                   --------   --------   --------   --------   --------
Gross profit                                         55,148     79,409    105,712    154,322    196,223
Selling, general and administrative expenses         56,812     75,416    101,760    132,745    173,667
Merger and business integration costs                    --         --      9,196     37,208     38,693
                                                   --------   --------    --------   --------   --------
Operating income (loss)                              (1,664)     3,993     (5,244)   (15,631)   (16,137)
Loss on disposal of stores                               --         --      3,500         --         --
Interest expense (income), net                        5,308      1,080         71        600      2,530
                                                   --------   --------    --------   --------   --------
Earnings (loss) before income taxes                  (6,972)     2,913     (8,815)   (16,231)   (18,667)
Income taxes (benefit) (2)                               42      1,969    (14,601)    (4,075)    (5,486)
                                                   --------   --------    --------   --------   --------
Net earnings (loss)                                $ (7,014)  $    944    $ 5,786   $(12,156)  $(13,181)
                                                   ========   ========    ========   ========   ========
Basic net earnings (loss) per common share (3)                   $0.08      $0.36     $(0.63)    $(0.64)
Diluted net earnings (loss) per common share                     $0.08      $0.35     $(0.63)    $(0.64)
Basic weighted average common shares outstanding                11,373     16,147     19,426     20,646
Diluted weighted average common shares outstanding              11,390     16,427     19,426     20,646

OPERATING DATA:
Superstores open end of period                          108        174        264        345        392
Traditional stores open end of period                   139        114         89         68         65
                                                  --------- ----------  ---------- ---------- ----------
Total stores open end of period                         247        288        353        413        457
Aggregate gross square footage                    1,418,585  2,047,078  3,169,472  4,435,019  5,299,535
Average net sales per store (4)                    $842,000  $ 974,000 $1,183,000 $1,438,000 $1,696,000
Average net sales per gross square foot (5)        $    162  $     153 $      168 $      162 $      158
Percentage increase in comparable store net sales      15.0%      18.5%      16.5%      16.1%      11.5%

BALANCE SHEET DATA:
Working capital                                    $  9,505   $ 31,918   $ 29,064   $ 59,928   $ 33,540
Total assets                                         71,302    126,918    214,498    312,617    335,195
Long-term debt, excluding current portion            48,531         --         --         --     26,625
Capital lease and other obligations, excluding
  current portion                                     2,959      5,779     13,334     15,581     11,369
Total stockholders' equity (deficit)                (43,716)    48,397    130,040    196,499    186,057
</TABLE>
______________

(1) Includes $4.3 million of charges from the write-down of fixed assets 
and related costs with respect to the Company's central distribution 
facility in fiscal 1995.

(2) Includes $11.8 million benefit from previously unrecognized deferred 
tax assets in fiscal 1995.

(3) Due to differences in capital structure, the Company's net earnings per 
share information prior to fiscal 1994 is not comparable and, accordingly, 
is not presented.

(4) Calculated using net sales divided by the number of stores open, 
weighted by the number of months stores are open during the period.

(5) Calculated using net sales divided by gross square footage of stores 
open, weighted by the number of months stores are open during the period.



<PAGE> 17
ITEM 7.  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 and relocated traditional stores into superstores and has closed 
underperforming stores. PETCO's experience has indicated that its 
superstore format achieves increased customer traffic, sales volume and 
profitability as compared to its traditional store format. As a result of 
the Company's store expansion strategy, operating results may reflect lower 
average store contribution and operating margins due to increased store 
preopening expenses and lower anticipated sales volumes of immature stores.

	During fiscal 1995 the Company completed three acquisitions of 
retailers of pet food and supplies which were accounted for as purchases.  
During fiscal 1996 the Company completed two acquisitions of retailers of 
pet food and supplies which were accounted for as purchases.  The Company 
also acquired three retailers of pet food and supplies which operated under 
the trade names Pet Nosh, with eight stores in the New York area, PETS USA 
with four stores in Colorado, and Pet Food Warehouse with 32 stores in the 
Upper Midwestern states.  These acquisitions were accounted for as poolings 
of interests.

	During fiscal 1997, the Company completed four acquisitions of 
retailers of pet food and supplies, operating 21 stores which were 
accounted for as immaterial poolings of interests.  The Company also 
acquired a retailer that operated 82 pet food and supply stores under the 
trade name PetCare located in 10 Midwestern and Southern states which was 
accounted for as a pooling of interests.

      All results of operations have been restated to reflect the poolings 
of interests and to reflect the purchase transactions and immaterial 
poolings from their respective acquisition dates.  (See footnote 2 to the 
consolidated financial statements).

	At January 31, 1998, the Company operated 457 stores, including 392 
superstores, in 33 states and the District of Columbia.



<PAGE> 18
RESULTS OF OPERATIONS

	The following table sets forth certain items expressed as a 
percentage of net sales for the periods indicated. As a result of 
operational and strategic changes, period-to-period comparisons of 
financial results may not be meaningful and the results of operations for 
historical periods may not be indicative of future results.

<TABLE>
<S>                                                <C>         <C>       <C>

                                                  Feb. 3,     Feb. 1,    Jan. 31,
                                                   1996        1997      1998 
                                                 --------    --------    --------
Net sales                                         100.0%      100.0%    100.0%
Cost of sales and occupancy costs                  76.2        74.3      73.8
                                                  -----       -----      -----
Gross profit                                       23.8        25.7      26.2
Selling, general and administrative expenses       22.9        22.1      23.2
Merger and business integration costs               2.1         6.2       5.2
                                                  -----       -----      -----
Operating income (loss)                            (1.2)       (2.6)     (2.2)
Loss on disposal of stores                           .8          --        --
Interest expense (income), net                       --         0.1       0.3
                                                  -----       -----       -----
Earnings (loss) before income taxes                (2.0)       (2.7)     (2.5)
Income taxes (benefit)                             (3.3)       (0.7)     (0.7)
                                                  -----       -----      -----
Net earnings (loss)                                 1.3        (2.0)     (1.8)
                                                  =====       =====      =====

</TABLE>
FISCAL YEAR ENDED JANUARY 31, 1998 COMPARED TO FISCAL YEAR ENDED FEBRUARY 
1, 1997

	Net sales increased 24.8% to $749.8 million in fiscal 1997 from 
$600.6 million in fiscal 1996.  The increase in net sales in fiscal 1997 
resulted primarily from the addition of 57 superstores, including the 
conversion of 10 traditional stores into superstores, the acquisition of 
seven traditional stores, the closing of 10 stores, and a comparable store 
net sales increase of 11.5%. 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 $103.2 million, or 69.2% 
of the net sales increase, and $46.0 million, or 30.8% of the net sales 
increase, was attributable to the increase in comparable store net sales.

	Gross profit, defined as net sales less the cost of sales including 
store occupancy costs, increased $41.9 million, or 27.2%, to $196.2 million 
in fiscal 1997 from $154.3 million in fiscal 1996.  Gross profit as a 
percentage of net sales increased to 26.2% in fiscal 1997 from 25.7% in 
fiscal 1996.  This increase reflects greater purchasing leverage during the 
current period.
 
	Selling, general and administrative expenses increased $41.0 million, 
or 30.9%, to $173.7 million in fiscal 1997 from $132.7 million in fiscal 
1996. Selling, general and administrative expenses increased primarily as a 
result of higher personnel and related costs associated with new store 
openings.  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 as a percentage of net 
sales to 21.7% in fiscal 1997 from 22.1% in fiscal 1996 due to net sales 
increasing at a greater rate than related expenses.

	Merger and business integration costs of $37.2 million were recorded 
in fiscal 1996 following acquisition activities.  These costs consisted of 
$7.2 million of transaction costs, $22.2 million of costs attributable to 
lease cancellations and closure of duplicate or inadequate facilities and 



<PAGE> 19
activities, $3.8 million of reformatting, facility conversion and other 
integration costs and $4.0 million of severance and other costs.  In fiscal 
1997, merger and business integration costs of $38.7 million were recorded 
following acquisition activities.  These costs consisted of $4.5 million of 
transaction costs, $17.8 million of costs attributable to lease 
cancellations and closure of duplicate or inadequate facilities and 
activities, $12.2 million of reformatting, facility conversion and other 
integration costs and $4.2 million of severance and other costs.  The 
Company expects to incur an additional $14.0 to $18.0 million in merger and 
business integration costs for continuing integration efforts in fiscal 
1998 from reformatting, facility conversion costs and other integration 
costs.

	Operating loss of $16.1 million was incurred in fiscal 1997 compared 
to operating loss of $15.6 million in fiscal 1996.  Excluding merger and 
business integration costs and the $11.0 million in charges related to the 
PetCare acquisition, the Company would have reported operating income of 
4.5% of net sales in fiscal 1997 and 3.6% in fiscal 1996.
 
	Net interest expense was $2.5 million in fiscal 1997 compared to net 
interest expense of $0.6 million in fiscal 1996.  Increased borrowings in 
fiscal 1997 led to the increase in interest expense.
 
	Income tax benefit was $5.5 million in fiscal 1997 compared to income 
tax benefit of $4.1 million in fiscal 1996.  Income tax benefit reflects 
the Federal and state tax benefits of the loss before income taxes, net of 
the effect of non-deductible expenses.
 
	Net loss was $13.2 million in fiscal 1997 compared to net loss  of 
$12.2 million in fiscal 1996.  Excluding merger and business integration 
costs and related charges and tax benefits, net earnings for fiscal 1997 
would have been $18.6 million, or $0.88 per diluted share, compared to 
$12.6 million, or $0.63 per diluted share in fiscal 1996.


FISCAL YEAR ENDED FEBRUARY 1, 1997 COMPARED TO FISCAL YEAR ENDED FEBRUARY 
3, 1996

	Net sales increased 35.4% to $600.6 million in fiscal 1996 from 
$443.6 million in fiscal 1995.  The increase in net sales in fiscal 1996 
resulted primarily from the addition of 91 superstores, including the 
conversion of 22 traditional stores into superstores, the acquisition of 
one traditional store, the closing of 10 stores, and a comparable store net 
sales increase of 16.1%. 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 $115.9 million, or 73.8% 
of the net sales increase, and $41.1 million, or 26.2% of the net sales 
increase, was attributable to the increase in comparable store net sales.

	Gross profit increased $48.6 million, or 46%, to $154.3 million in 
fiscal 1996 from $105.7 million in fiscal 1995.  Gross profit as a 
percentage of net sales increased to 25.7% in fiscal 1996 from 23.8% in 
fiscal 1995.  This increase reflects a better sales mix, increased 
occupancy leverage and lowered distribution expenses related to the more 
efficient operation of the Company's central distribution facility during 
the period.  In addition, charges of $4.3 million were recorded during the 
third quarter of fiscal 1995 from the write-down of fixed assets and 



<PAGE> 20
related costs with respect to the Company's central distribution facility.  
Excluding these charges, gross profit as a percentage of net sales in 
fiscal 1995 would have been 24.8%.

	Selling, general and administrative expenses increased $30.9 million, 
or 30.4%, to $132.7 million in fiscal 1996 from $101.8 million in fiscal 
1995.  Selling, general and administrative expenses increased primarily as 
a result of higher personnel and related costs associated with new store 
openings.  As a percentage of net sales, these expenses decreased to 22.1% 
in fiscal 1996 from 22.9% in fiscal 1995 due to net sales increasing at a 
greater rate than related expenses.

	Merger and business integration costs of $9.2 million were recorded 
in fiscal 1995 following acquisition activities.  These costs were 
primarily associated with lease cancellations and closure of traditional 
stores located in the same markets as acquired stores and the conversion 
and integration of certain acquired stores.  In fiscal 1996, merger and 
business integration costs of $37.2 million were recorded following 
acquisition activities.  These costs consisted of $7.2 million of 
transaction costs, $22.2 million of costs attributable to lease 
cancellations and closure of duplicate or inadequate facilities and 
activities, $3.8 million of reformatting, facility conversion and other 
integration costs and $4.0 million of severance and other costs.
 
	Operating loss of $15.6 million was incurred in fiscal 1996 compared 
to operating loss of $5.2 million in fiscal 1995.  Excluding merger and 
business integration costs and the $4.3 million write-down of fixed assets, 
the Company would have reported operating income of 3.6% of net sales in 
fiscal 1996 and 1.9% in fiscal 1995.    

	Net interest expense was $0.6 million in fiscal 1996 compared to net 
interest expense of $0.1 million in fiscal 1995.
 
	Income tax benefit was $4.1 million in fiscal 1996 compared to income 
tax benefit of $14.6 million in fiscal 1995.  In fiscal 1995, an income tax 
benefit of $11.8 million from previously unrecognized deferred tax assets 
was recognized. 

	Net loss was $12.2 million in fiscal 1996 compared to net earnings of 
$5.8 million in fiscal 1995.  Excluding merger and business integration 
costs, the $4.3 million write-down of fixed assets, the $3.5 million loss 
on disposal of stores, and their related tax benefits, and recognition of 
$11.8 million from previously unrecognized deferred tax assets, net 
earnings for fiscal 1996 would have been $12.6 million, or $0.63 per 
diluted share, compared to $4.9 million, or $0.30 per diluted share in 
fiscal 1995.



<PAGE> 21
QUARTERLY DATA

	The following tables set forth the unaudited quarterly results of 
operations for fiscal 1996 and fiscal 1997.  This information includes all 
adjustments management considers necessary for fair presentation of such 
data.  The results of operations for historical periods are not necessarily 
indicative of results for any future period.  The Company expects quarterly 
results of operations to fluctuate depending on the timing and amount of 
revenue contributed by new stores.

	The Company believes that its business is moderately seasonal, with 
net sales and earnings generally higher in the fourth fiscal quarter due to 
year-end holiday purchases.
<TABLE>
<S>                                                <C>        <C>        <C>        <C>       
                                           	              Fiscal Quarter Ended 
                                                   ------------------------------------------
                                                     May 4,     Aug. 3,    Nov. 2,   Feb. 1,
Fiscal 1996                                           1996       1996       1996       1997
-----------                                        ---------  ---------  ---------  ---------
Net sales                                          $ 133,659  $ 143,614  $ 151,556  $ 171,808
Gross profit                                          32,628     36,799     39,461     45,434
Operating income (loss)                                1,988    (10,867)     2,179     (8,931)
Net earnings (loss)                                      976     (7,208)     1,117     (7,041)
Basic net earnings (loss) per share                $    0.06  $   (0.36) $    0.06  $   (0.35)
Diluted net earnings (loss) per share              $    0.05  $   (0.36) $    0.05  $   (0.35)

Stores open at end of period                             367        372        389        413
Aggregate gross square footage                     3,489,187  3,618,650  3,925,025  4,435,019
Percentage increase in comparable store net sales       18.2%      18.3%      17.0%      12.6%

                                                               Fiscal Quarter Ended
                                                   ------------------------------------------ 
                                                     May 3,     Aug. 2,    Nov. 1,   Jan. 31,
Fiscal 1997                                           1997       1997       1997      1998    
-----------                                        ---------  ---------  ---------  --------                                    
Net sales                                          $ 170,909  $ 175,460  $ 191,775  $211,645
Gross profit                                          42,212     45,339     50,471    58,201
Operating income (loss)                                2,704     (2,884)   (24,989)    9,032
Net earnings (loss)                                    1,297     (2,811)   (17,013)    5,346
Basic net earnings (loss) per share                $    0.06  $   (0.14) $   (0.81) $   0.25
Diluted net earnings (loss) per share              $    0.06  $   (0.14) $   (0.81) $   0.25

Stores open at end of period                             420        427        451       457
Aggregate gross square footage                     4,564,145  4,759,811  5,132,350 5,299,535 
Percentage increase in comparable store net sales       14.0%      12.4%      10.2%     10.2%
</TABLE>


YEAR 2000 ISSUES

	The Year 2000 problem is the result of computer programs being 
written using two digits rather than four to define the applicable year.  
In 1997, the Company developed a plan to deal with the Year 2000 problem to 
assure that its systems are Year 2000 compliant.  In general, the Company 
expects to resolve Year 2000 issues through planned replacements or 
upgrades.  The Company does not expect that the cost of its Year 2000 
compliance program will be material to its business, results of operations, 
or financial condition.  Although the impact on the Company caused by the 
failure of the Company's significant suppliers to achieve Year 2000 
compliance in a timely or effective manner is uncertain, the Company's 
business and results of operations could be materially adversely affected 
by such failure.



<PAGE> 22
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 January 31, 1998, total assets were $335.2 million, $124.4 million of 
which were current assets.  Net cash provided by (used in) operating 
activities was $6.6 million, $(0.6) million, and $10.6 million for fiscal  
1995, 1996 and 1997, respectively.  The Company's sales are substantially 
on a cash basis, therefore, cash flow generated from operating stores 
provides a significant 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. 
Cash used in investing activities was $63.1 million, $51.6 million and 
$65.7 million for fiscal 1995, 1996 and 1997, respectively.

	The Company also finances some of its purchases of equipment and 
fixtures through capital lease and other obligations.  Purchases of $11.1 
million, $8.0 million and $1.3 million of fixed assets were financed in 
this manner during fiscal 1995, 1996 and 1997, respectively.  The Company 
believes additional sources of capital lease and other obligation financing 
are available on a cost-effective basis and plans to use them, as 
necessary, in connection with its expansion program.

      During fiscal 1995, the Company completed six acquisitions of 
retailers of pet food and supplies in purchase transactions. The aggregate 
fair market value of assets acquired was $38.8 million and assumed 
liabilities were $8.4 million with $30.4 million of net cash invested in 
the acquisition of these businesses. During fiscal 1996, the Company 
completed two acquisitions of retailers of pet food and supplies in 
purchase transactions. The aggregate fair value of assets acquired was 
$14.4 million and assumed liabilities were $1.4 million with $13.0 million 
of net cash invested in the acquisition of these businesses, of which $6.0 
million was expended in fiscal 1997.

	The Company's primary long-term capital requirement is funding for 
the opening or acquisition of superstores and conversion of traditional 
stores into superstores.  Cash flows provided by financing activities were 
$54.3 million, $79.4 million and $13.5 million in fiscal 1995, 1996 and 
1997, respectively.  In fiscal 1995, 1996, and 1997, net proceeds of $53.7 
million, $79.4 million, and $2.5 million, respectively, were generated from 
sales of common stock.  Cash flows from financing activities were used to 
finance the acquisition of related businesses and fund the Company's 
expansion program and working capital requirements.

	The Company has a credit facility with a syndicate of banks with a 
commitment of up to $110.0 million that expires January 30, 2003.  The 
credit facility provides for $80.0 million in revolving loans and a $30.0 
million term loan.  Borrowings under the credit facility are unsecured and 
bear interest, at the Company's option, at the agent bank's corporate base 
rate or LIBOR plus 0.50% to 1.50%, based on the Company's leverage ratio at 



<PAGE> 23
the time.  The credit agreement contains certain affirmative and negative 
covenants related to indebtedness, interest and fixed charges coverage, and 
consolidated net worth.  As of January 31, 1998, the Company had $80.0 
million of revolving loans available under the credit facility.

	As of January 31, 1998, the Company had available net operating loss 
carryforwards of $39.2 million for federal income tax purposes, which begin 
expiring in 2004, and $36.4 million for state income tax purposes, which 
begin expiring in 1998.

	The Company anticipates that funds generated by operations, funds 
available under the credit facility and currently available vendor 
financing and capital lease and other obligation financing will be 
sufficient to finance its continued operations and planned store openings 
at least through fiscal 1998.



<PAGE> 24
INFLATION

	Although the Company cannot accurately anticipate the effect of 
inflation on its operations, it does not believe that inflation has had, or 
is likely in the foreseeable future to have, a material impact on its net 
sales or results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

	Not applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

	The Consolidated Financial Statements required by this Item are set 
forth at the pages indicated in Item 14(a) hereof.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

	None.

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

	Incorporated by reference from the Company's Proxy Statement relating 
to the 1998 Annual Meeting of Stockholders to be filed pursuant to General 
Instruction G(3) to Form 10-K, except information concerning the executive 
officers of the Company which is set forth in Item 4.1 hereof.

ITEM 11.  EXECUTIVE COMPENSATION

	Incorporated by reference from the Company's Proxy Statement relating 
to the 1998 Annual Meeting of Stockholders to be filed pursuant to General 
Instruction G(3) to Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

	Incorporated by reference from the Company's Proxy Statement relating 
to the 1998 Annual Meeting of Stockholders to be filed pursuant to General 
Instruction G(3) to Form 10-K.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

	Incorporated by reference from the Company's Proxy Statement relating 
to the 1998 Annual Meeting of Stockholders to be filed pursuant to General 
Instruction G(3) to Form 10-K.



<PAGE> 25
PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  Financial Statements
                                                                       Page
     Independent Auditor's Reports                                      26  
     Consolidated Balance Sheets                                        28
     Consolidated Statements of Operations                              29 
     Consolidated Statements of Stockholders' Equity                    30
     Consolidated Statements of Cash Flows                              31
     Notes to Consolidated Financial Statements                         32

(b) Reports on Form 8-K

	None

(c) Exhibits

	The exhibits listed on the accompanying Exhibit Index are filed as 
part of this Annual Report.



<PAGE> 26
INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Petco Animal Supplies, Inc.:

	We have audited the accompanying consolidated balance sheets of Petco 
Animal  Supplies,  Inc.  and  subsidiaries  as  of  February 1,  1997  and 
January 31, 1998, and the related consolidated statements of operations, 
stockholders' equity, and cash flows for each of the years in the three-
year period ended January 31, 1998.  These consolidated financial 
statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these consolidated financial 
statements based on our audits.  We did not audit the financial statements 
of PetCare Plus, Inc., which statements reflect total assets constituting 
10 percent at February 1, 1997, and total revenues constituting 19 percent 
and 17 percent for the years ended January 27, 1996 and January 25, 1997, 
respectively, of the related consolidated totals.  Those financial 
statements were audited by other auditors whose report has been furnished 
to us, and our opinion, insofar as it relates to the amounts included for 
PetCare Plus, Inc., is based solely on the report of the other auditors.

	We conducted our audits in accordance with generally accepted 
auditing standards.  Those standards require that we plan and perform the 
audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement.  An audit includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the financial 
statements.  An audit also includes assessing the accounting principles 
used and significant estimates made by management, as well as evaluating 
the overall financial statement presentation.  We believe that our audits 
provide a reasonable basis for our opinion.

	In our opinion, based on our audits and the report of the other 
auditors, the consolidated financial statements referred to above present 
fairly, in all material respects, the financial position of Petco Animal 
Supplies, Inc. and subsidiaries as of February 1, 1997 and January 31, 1998 
and the results of their operations and their cash flows for each of the 
years in the three-year period ended January 31, 1998 in conformity with 
generally accepted accounting principles.




San Diego, California					   KPMG Peat Marwick LLP
April 17, 1998



<PAGE> 27
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


      
The Board of Directors and Stockholders
PetCare Plus, Inc.:

We have audited the accompanying balance sheets of PetCare Plus, Inc. as of 
January 25, 1997 and the related statements of operations, redeemable 
convertible preferred stock and stockholder's equity and cash flows for the 
years ended January 25, 1997 and January 27, 1996.  These financial 
statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements based 
on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial 
statements.  An audit also includes assessing the accounting principles 
used and significant estimates made by management, as well as evaluating 
the overall financial statement presentation.  We believe that our audits 
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, 
in all material respects, the financial position of PetCare Plus, Inc. as 
of January 25, 1997, and the results of its operations and its cash flows 
for the years ended January 25, 1997 and January 27, 1996 in conformity 
with generally accepted accounting principles.




Chicago, Illinois						Coopers & Lybrand L.L.P.
April 16, 1997, except as to the
	information presented in Note 4,
	for which the date is June 10, 1997
     	


<PAGE> 28
PETCO ANIMAL SUPPLIES, INC.

CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

ASSETS
<TABLE>
  <S>                                                         <C>          <C>

                                                          February 1,  January 31,
                                                             1997          1998  	     
                                                          ----------   -----------
Current assets:			
  Cash and cash equivalents                               $  44,338    $    3,354
  Receivables                                                 7,881        10,879
  Inventories                                                82,782        96,873
  Deferred tax assets (note 6)                                6,439         8,354
  Other                                                       2,428         4,942
                                                          ---------     ---------
    Total current assets                                    143,868       124,402
		
Fixed assets (note 4):                                                         
  Equipment                                                  43,613        51,525
  Furniture and fixtures                                     36,298        50,575
  Leasehold improvements                                     67,936       100,151
                                                          ---------     ---------
                                                            147,847       202,251
  Less accumulated depreciation and amortization            (38,018)      (54,822)
                                                          ---------     --------
                                                            109,829       147,429

Goodwill                                                     42,408        39,348
Deferred tax assets (note 6)                                 14,268        17,885
Other assets                                                  2,244         6,131
                                                          ---------     ---------
                                                          $ 312,617    $  335,195
                                                          =========     =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:			
  Accounts payable                                        $  42,457    $   51,794
  Accrued expenses                                           19,680        21,558
  Accrued salaries and employee benefits                      9,096         9,242
  Current portion of long-term debt (note 3)                  8,950         3,375 
  Current portion of capital lease and other 
    obligations (note 4)                                      4,575         5,073
                                                           --------     ---------
    Total current liabilities                                84,758        91,042
			
Long-term debt, excluding current portion (note 3)               --        26,625 
Capital lease and other obligations, excluding current
  portion (note 4)                                           15,581        11,369
Accrued store closing costs                                   8,691        11,189
Deferred rent                                                 7,088         8,913
			
Stockholders' equity (note 5):			
 Common stock, $.0001 par value, 100,000 shares 
    authorized, 20,153 and 21,060 shares issued 
    and outstanding, respectively                                 2             2
 Additional paid-in capital                                 265,971       270,755
 Accumulated deficit                                        (69,474)      (84,700)
                                                           --------       -------
    Total stockholders' equity                              196,499       186,057
Commitments and contingencies (notes 4, 5, and 9)  
                                                           --------       ------              
                                                          $ 312,617     $ 335,195
                                                           ========       =======
</TABLE>

See accompanying notes to consolidated financial statements

PETCO ANIMAL SUPPLIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
<TABLE>
<S>                                            <C>         <C>         <C>

                                                          Years Ended   
                                            ----------------------------------- 
                                               February 3, February 1, January 31, 
                                                  1996        1997         1998    
                                               ----------  ----------  ---------- 

Net sales                                      $  443,585  $  600,637  $  749,789

Cost of sales and occupancy costs                 337,873     446,315     553,566
                                                ---------   ---------   --------
      Gross profit                                105,712     154,322     196,223

Selling, general and administrative expenses      101,760     132,745     173,667

Merger and business integration costs (note 2)      9,196      37,208      38,693
                                                ---------   ---------   ---------
      Operating loss                               (5,244)    (15,631)    (16,137)

Loss on disposal of stores (note 7)                 3,500          --          --
 
Interest income                                    (1,477)     (2,179)      (588)

Interest expense                                    1,548       2,779      3,118
                                                ---------    --------    --------
      Loss before income taxes                     (8,815)    (16,231)    (18,667)

Income tax benefit (note 6)                       (14,601)     (4,075)     (5,486)
                                                ---------    --------    --------
      Net earnings (loss)                      $    5,786  $  (12,156) $  (13,181)
                                                =========   =========   =========

Net earnings (loss) per common share, basic    $     0.36  $    (0.63) $    (0.64)
                                                =========   =========   =========

Net earnings (loss) per common share, diluted  $     0.35  $    (0.63) $    (0.64)
                                                =========   =========   =========

</TABLE>

See accompanying notes to consolidated financial statements.



<PAGE> 30
PETCO ANIMAL SUPPLIES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(in thousands)
<TABLE>
<S>                            <C>       <C>   <C>            <C>     <C>

                                            Additional                Total
                              Common Stock    Paid-in  Accumulated Stockholders'
                            Shares   Amount   Capital    Deficit   Equity    
                            --------------- ---------- ----------- -------------
Balances at 
 January 28, 1995             12,020 $    1  $110,398   $ (46,832)   $ 63,567 

Restatement for
 poolings of
 interests (Note 2)            1,264     --    22,523     (15,180)      7,343 
                              ------  -----   -------    --------     -------
Balances at 
 January 28, 1995             13,284 $    1  $132,921   $ (62,012)   $ 70,910 

Sale of common stock           3,897     --    53,614          --      53,614    

Exercise of options                5     --        60          --          60 

Distributions to
 shareholders (note 2)            --     --        (8)       (323)       (331) 

Net earnings                      --     --        --       5,786       5,786 
                              ------  -----   -------     -------      ------
Balances at 
 February 3, 1996             17,186 $    1  $186,587    $(56,549)   $130,039  

Sale of common stock           2,897      1    78,698          --      78,699 

Cash in lieu of 
 fractional shares                --     --        (5)         --          (5) 

Exercise of options               69     --       670          --         670 

Issuance of stock
 for services                      1     --        21          --          21 

Distributions to
 shareholders (note 2)            --     --        --        (769)       (769) 

Net loss                          --     --        --     (12,156)    (12,156) 
                               -----   ----    ------     -------     -------
Balances at 
 February 1, 1997             20,153 $    2  $265,971    $(69,474)   $196,499 

Beginning balance of
 immaterial poolings 
 of interests (note 2)           613     --     2,311      (2,045)        266 

Exercise of options              293     --     2,449          --       2,449 

Issuance of stock 
 For services                      1     --        24          --          24 

Net loss                          --     --        --     (13,181)    (13,181) 
                              ------  -----   -------     -------      ------
Balances at 
 January 31, 1998             21,060 $    2  $270,755    $(84,700)  $ 186,057 
                              ======  =====   =======     =======    ========
</TABLE>


See accompanying notes to consolidated financial statements.



<PAGE> 31
PETCO ANIMAL SUPPLIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
  <S>                                                 <C>             <C>             <C>
                                                                  Years Ended
                                                    -----------------------------------------
                                                    February 3,    February 1,    January 31,     
                                                       1996           1997          1998    
                                                    ----------     ----------     ----------
Cash flows from operating activities:			
  Net earnings (loss)                                $  5,786       $(12,156)      $ (13,181)
  Depreciation and amortization                        11,190         18,089          24,289
  Deferred taxes                                      (16,031)        (5,204)         (5,391)
  Loss on retirement of fixed assets                    3,603          4,712           5,908
  Loss on disposal of stores                            3,500             --              --
  Changes in assets and liabilities, net of effects
    of purchase acquisitions:
    Receivables                                        (1,226)        (2,348)         (2,845)
    Inventories                                       (14,006)       (15,342)         (7,992)
    Other assets                                          210         (2,766)         (7,247)
    Accounts payable                                    6,550          3,112          12,667
    Accrued expenses                                       53          2,592             567
    Accrued salaries and employee benefits                720          3,238             145
    Accrued store closing costs                         5,179          3,887           2,489
    Deferred rent                                       1,040          1,540           1,170
                                                      -------        -------        --------  
      Net cash provided by (used in) operating 
        activities                                      6,568           (646)         10,579
                                                      -------        -------        --------
		
Cash flows from investing activities:			
  Additions to fixed assets                           (35,361)       (46,246)        (59,633)
  Net cash invested in acquisitions of businesses     (30,373)        (7,021)         (6,028)
  Proceeds from sale of fixed assets                       --          1,626              --
  Proceeds from disposal of stores                      2,426             --              --
  Other                                                   224             --              --
                                                      -------        -------        --------
      Net cash used in investing activities           (63,084)       (51,641)        (65,661)
                                                      -------        -------        --------		

Cash flows from financing activities:			
  Borrowings under long-term debt agreements            2,750          5,450          28,591
  Repayment of long-term debt agreements                   --             --         (10,335)
  Borrowings under other obligations                    1,178             --              --
  Repayment of capital lease and other obligations     (2,984)        (4,626)         (7,221)
  Proceeds from the issuance of common stock           53,675         79,385           2,473
  Distributions to shareholders                          (331)          (769)             --
                                                      -------        -------        --------
      Net cash provided by financing activities        54,288         79,440          13,508
                                                      -------        -------        --------		

Net increase (decrease) in cash and cash equivalents   (2,228)        27,153         (41,574)
Cash and cash equivalents at beginning of year         19,413         17,185          44,338
Beginning cash and cash equivalents of immaterial
  poolings of interests                                    --             --             590 
                                                      -------        -------         -------  
Cash and cash equivalents at end of year             $ 17,185       $ 44,338        $  3,354
                                                      =======        =======         ======= 
Supplemental cash flow disclosures:
  Interest paid on debt                              $  1,340       $  2,792        $  3,105
  Income taxes paid                                  $  1,436       $  1,854        $    920
Supplemental disclosure of noncash financing
  activities:
  Additions to capital leases                        $ 11,093       $  8,015        $  1,268

</TABLE>

See accompanying notes to consolidated financial statements.



<PAGE> 32
PETCO ANIMAL SUPPLIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)

1.  Summary of Significant Accounting Policies

 (a)  Description of Business:

	PETCO Animal Supplies, Inc., (the Company or PETCO) a Delaware 
corporation, is a national specialty retailer of premium pet food and 
supplies with stores in 33 states and the District of Columbia.

 (b)  Basis of Presentation:
	
	The consolidated financial statements include the accounts of the 
Company and its wholly-owned subsidiaries.  All significant intercompany 
accounts and transactions have been eliminated.

	The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the reported amounts of assets and liabilities at 
the date of the consolidated financial statements and the reported amounts 
of revenues and expenses during the reporting period.  Actual results could 
differ from those estimates.
 
(c) Fiscal Year:

	The Company's fiscal year ends on the Saturday closest to January 31, 
resulting in years of either 52 or 53 weeks.  The year ended February 3, 
1996 consisted of 53 weeks and the years ended February 1, 1997 and January 
31, 1998 consisted of 52 weeks.  All references to a fiscal year refer to 
the fiscal year ending on the Saturday closest to January 31 of the 
following year.

 (d) Cash Equivalents:

	The Company considers all liquid investments with maturities of three 
months or less to be cash equivalents.

 (e) Inventories:

	Inventories are stated at the lower of cost, determined by the first-
in, first-out method, or market.

 (f) Pre-opening Costs:

	Costs incurred in connection with opening new stores are expensed as 
incurred.

 (g) Fixed Assets:

	Fixed assets are stated at cost.  Depreciation is computed using the 
straight-line method over the estimated useful lives of the assets, 
generally three to ten years.  Equipment under capital leases is stated at 
the present value of minimum lease payments at the inception of the lease.  
Amortization is computed using the straight-line method over the lesser of 
the lease term or the estimated useful lives of the assets, generally five 
to fifteen years.

 (h) Goodwill:

	Goodwill represents the excess of the cost over the fair market value 
of net assets acquired by the Company.  Goodwill is amortized straight-line 
over fifteen years.  The Company continually reviews goodwill to assess 
recoverability from future undiscounted cash flows. Accumulated 
amortization at February 1, 1997 and January 31, 1998 was $3,423 and 
$6,483, respectively.



<PAGE> 33
 (i) Other Assets:

	Other assets consist primarily of lease deposits, non-compete 
agreements and debt issuance costs.  Non-compete agreements are amortized 
straight-line over the periods of the agreements, generally five to seven 
years.  Debt issuance costs are amortized to interest expense using the 
effective interest method over the life of the related debt, generally five 
years.  Accumulated amortization for intangible other assets at February 1, 
1997 and January 31, 1998 was $100 and $177, respectively.

 (j) Store Closing Costs:

	Management continually reviews the ability of stores to provide 
positive contributions to the Company's results.  Costs associated with 
closing stores, consisting primarily of lease obligations and provisions to 
reduce assets to net realizable value are charged to operations upon the 
decision to close a store.

 (k) Income Taxes:

	Income taxes are accounted for under the asset and liability method.  
Deferred tax assets and liabilities are recognized for the future tax 
consequences attributable to differences between the financial statement 
carrying amounts of existing assets and liabilities and their respective 
tax bases.

	Deferred tax assets and liabilities are measured using enacted tax 
rates expected to apply to taxable income in the years in which those 
temporary differences are expected to be recovered or settled.  The effect 
on deferred tax assets and liabilities of a change in tax rates is 
recognized in operations in the period that includes the enactment date.

 (l) Fair Value of Financial Instruments:

	Because of their short maturities, the carrying amounts for cash and 
cash equivalents, receivables, accounts payable, accrued expenses, and 
accrued salaries and employee benefits approximate fair value.  The 
carrying amounts for long-term debt and capital leases and other 
obligations approximate fair value as the interest rates are substantially 
similar to rates which could be obtained currently for similar instruments.

 (m) Impairment of Long-Lived Assets:

	The Company periodically assesses the impairment of long-lived assets 
based on expectations of future profitability and undiscounted cash flow 
from the related operations, and when circumstances dictate, adjusts the 
carrying value of the asset.  These factors, along with management's plans 
with respect to the operations, are considered in assessing the 
recoverability of goodwill, other purchased intangibles and property and 
equipment.

 (n) Stock Options:

	The Company accounts for stock option plans in accordance with the 
provisions of Accounting Principles Board ("APB") Opinion No. 25, 
"Accounting for Stock Issued to Employees", which recognizes compensation 
expense on the grant date if the current market price of the stock exceeded 
the exercise price.  In 1996, the Company elected to adopt the disclosure 
provisions of Statement Of Accounting Standards ("SFAS") No. 123, 
"Accounting for Stock-Based Compensation".

 (o) Earnings Per Share:
	
	The consolidated financial statements are presented in accordance 
with SFAS No. 128, "Earnings per Share." Basic net earnings (loss) per 
common share are computed using the weighted average number of common 


<PAGE> 34
shares outstanding during the period.  Diluted net earnings (loss) per 
common share incorporate the incremental shares issuable upon the assumed 
exercise of stock options.  All prior period net earnings (loss) per common 
share information are presented in accordance with SFAS No. 128.

	Net earnings (loss) and weighted average common shares used to 
compute net earnings (loss) per share, basic and diluted, are presented 
below:
<TABLE>
<S>                                                  <C>          <S>

                                                            Years Ended 
                                               ----------------------------------
                                               February 3, February 1, January 31, 
                                                  1996        1997       1998   
                                               ----------  ----------  ---------
Net earnings (loss)                             $  5,786    $(12,156)   $(13,181)  

Common shares, basic                              16,147      19,426      20,646
Dilutive effect of stock options                     280          --          --
                                                 -------     -------     -------
Common shares, diluted                            16,427      19,426      20,646
                                                 =======     =======     =======

</TABLE>
Dilutive effect of stock options of 561 and 581 shares were not included in 
computing diluted earnings (loss) per share for fiscal 1996 and fiscal 
1997, respectively, because the effect would have been antidilutive.

 (p) Reclassifications:

	Certain previously reported amounts have been reclassified to conform 
with the current period presentation.


2. BUSINESS COMBINATIONS

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, a retailer with four pet food and supply stores operated 
under the tradename PETS USA in October 1996, and a retailer with thirty-
two pet food and supply stores operated under the tradename Pet Food 
Warehouse in December 1996, in exchange for an aggregate 2,929 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 four pet food and supply stores operated under the tradename Super 
Pets in August 1997, a retailer with nine pet food and supply stores 
operated under the tradename Paws in October 1997, a retailer with five pet 
food and supply stores operated under the tradename The PetCare Company in 
October 1997, and a retailer with four pet food and supply stores operated 
under the tradename Pet Food Savemart in October 1997, in exchange for an 
aggregate 613 shares of common stock.  These acquisitions were accounted 
for as poolings of interests with their financial positions and results of 
operations included in the accompanying consolidated financial statements 
from the beginning of the period in which each immaterial pooling was 
completed.  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 position or results of operations of the Company.

The Company acquired all of the outstanding equity securities of a retailer 
with eighty-two pet food and supply stores operated under the tradename 
PetCare ("PetCare") in November 1997, in exchange for 1,543 shares of 
common stock.  This transaction has been accounted for as a pooling of 
interests, and accordingly, the consolidated financial statements for the 
periods presented have been restated to include the accounts of PetCare. 



<PAGE> 35
Net sales and net earnings (loss) for the separate companies for the 
periods preceding the PetCare acquisition were as follows:

<TABLE>
 <S>                                           <C>            <C>
									                                                  Net Earnings
          		                                    Net Sales      (Loss)    
                                                ---------   ------------     
Year ended February 3, 1996:				
	PETCO, as previously reported	                $  358,951 $   7,465
	PetCare (1)	                                      84,634 $  (1,679) 
                                                ---------    -------- 
	Combined	                                     $  443,585	$   5,786
                                                =========    ======== 

Year ended February 1, 1997:				
	PETCO, as previously reported	                $  500,036	$ (11,685)
	PetCare (1)	                                     100,601	     (471)
                                                ---------    -------- 
	Combined	                                     $  600,637 $ (12,156)
                                                =========    ========

Year ended January 31, 1998:				
	PETCO	                                        $  695,713	$ (11,193)
	PetCare	                                          54,076	   (1,988) 
                                                ---------   --------
	Combined	                                     $  749,789	$ (13,181)
                                                =========   ======== 

</TABLE>
	(1)In connection with the pooling with PetCare, an additional $1,143 
and $327 of deferred tax assets were recognized in fiscal 1995 and fiscal 
1996, respectively.

During fiscal 1995, the Company completed six acquisitions of retailers of 
pet food and supplies.  All of these acquisitions were accounted for as 
purchases.  The aggregate fair market value of assets acquired was $38,756 
and assumed liabilities were $8,383 with $30,373 of net cash invested in 
the acquisition of these businesses.  The excess of the aggregate cost over 
the fair market value of net assets acquired was $28,905 which has been 
recorded as goodwill and is being amortized over fifteen years.

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, of which $6,028 was expended in fiscal 1997.  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 purchase 
acquisitions during fiscal 1996 did not materially affect results of 
operations and accordingly, pro-forma results are not presented for fiscal 
1996.

In fiscal 1995, merger and business integration costs of $9,196 were 
recorded following acquisition activities.  These costs were primarily 
associated with lease cancellations and closure of traditional stores 
located in the same markets as acquired stores and the conversion and 
integration of certain acquired stores.

In fiscal 1996, merger and business integration costs of $37,208 were 
recorded following acquisition activities.  These costs consisted of $7,182 
of transaction costs, $22,224 of costs attributable to lease cancellations 
and closure of duplicate or inadequate facilities and activities, $3,835 of 
reformatting, facility conversion and other integration costs and $3,967 of 
severance and other costs.

In fiscal 1997, merger and business integration costs of $38,693 were 
recorded following acquisition activities.  These costs consisted of $4,470 
of transaction costs, $17,790 of costs attributable to lease cancellations 
and closure of duplicate or inadequate facilities and activities, $12,216 
of reformatting, facility conversion and other integration costs and $4,217 
of severance and other costs.

Distributions to shareholders reflected in the accompanying Consolidated 
Statement of Stockholders' Equity reflect activities of the pooled 
companies.



<PAGE> 36
3.  LONG-TERM DEBT

On January 30, 1998, the Company agreed to a five year credit facility with 
a syndicate of banks which provides for borrowings up to $110,000.  The 
credit facility provides $80,000 in revolving loans and $30,000 for a term 
loan.  Borrowings under the credit facility are unsecured and bear 
interest, at the Company's option, at the agent bank's corporate base rate 
or LIBOR plus 0.50% to 1.50% based on the Company's leverage ratio at the 
time.  The credit agreement contains certain affirmative and negative 
covenants related to indebtedness, interest and fixed charges coverage, and 
consolidated net worth.
<TABLE>
<S>                           <C>         <C>  
Long-term debt consists of:
                            February 1, January 31, 
                               1997        1998    
                            ----------  ---------- 
Revolving loans               $ 8,950     $    --  
Term loan                          --      30,000
                               ------      ------
                                8,950      30,000
Less current portion            8,950       3,375
                               ------      ------
                              $    --     $26,625
                               ======      ======
</TABLE>
Annual maturities of long-term debt for the next five fiscal years are as 
follows: 
$3,375, $4,500, $7,125, $7,500 and $7,500.

4.  Lease Commitments and Other Obligations

	The Company finances certain fixed assets under capital leases.  
There are approximately $21,200 and $22,500 in fixed assets financed 
through capital leases at February 1, 1997 and January 31, 1998, 
respectively.  Accumulated amortization related to these financed assets 
was approximately $5,000 and $7,500 at February 1, 1997 and January 31, 
1998, respectively.

	The Company leases warehouse and store facilities under operating 
leases.  These operating leases generally have terms from three to ten 
years.  Certain stores leases include additional contingent rental payments 
ranging from 2% to 6% of store revenues above defined levels.  Contingent 
rentals during fiscal years 1995, 1996, and 1997 were $61, $24 and $33, 
respectively.

	At January 31, 1998, the present value of future minimum payments for 
capital lease and other obligations, and minimum lease payments under 
noncancellable operating leases were as follows:
<TABLE>
   <S>                                               <C>           <C>
                                                Capital Leases
                                                   and Other    Operating
   Years                                          Obligations     Leases 
   -----                                        --------------  ---------
   1998                                            $ 6,700       $ 67,414
   1999                                              5,288         65,295
   2000                                              3,121         62,627
   2001                                              1,591         56,234
   2002                                                323         52,190
   Thereafter                                        2,644        239,554
                                                    ------        ------- 
   Total minimum payments                           19,667       $543,314
                                                                  =======    
   Less amount representing interest                 3,225 
                                                    ------                    
   Present value of net minimum capital 
      lease and other obligations payments          16,442

   Less current portion of capital lease 
      and other obligations                          5,073
                                                    ------
   Capital lease and other obligations             $11,369
                                                    ======      

</TABLE>

<PAGE> 37
	Rent expense under operating leases for fiscal years 1995, 1996, and 
1997 was approximately $39,639, $55,023, and $70,506, respectively.


5.  EQUITY

 (a) Common Stock:

	All references to common share information in the accompanying 
consolidated financial statements and notes reflect recognition of an April 
15, 1996, three for two stock split.  In June 1996, the Company's 
stockholders approved an increase in the number of authorized shares to 
100,000.

	In 1995, the Company sold 3,897 common shares, for net proceeds to 
the Company of $53,614.  In 1996, the Company sold 2,897 common shares, for 
net proceeds to the Company of $78,699.


 (b) Stock Options:

	In February 1994, the Company's stockholders approved the 1994 Stock 
Option Plan ("1994 Company Plan") which provides for the granting of stock 
options, stock appreciation rights or restricted stock with respect to 
shares of common stock to executives and other key employees.  Stock 
options may be granted in the form of incentive stock options or non-
statutory stock options and are exercisable for up to ten years following 
the date of grant.  Stock option exercise prices must be equal to or 
greater than the fair market value of the common stock on the grant date.  
In June 1996, the Company's stockholders approved an amendment to the 1994 
Company Plan to increase the number of shares available for issuance under 
the plan for each of the next five fiscal years by 3.0% of the number of 
shares of common stock issued and outstanding as of the end of the 
immediately preceding fiscal year.

	In February 1994, the Company's stockholders approved the Directors 
1994 Stock Option Plan ("Directors Plan") which provides for the granting 
of common stock options to directors.  Stock option exercise prices must be 
equal to the fair market value of the common stock on the grant date.  In 
June 1995, the Company's stockholders approved an amendment to the 
Directors Plan to increase the number of shares available for issuance 
under the plan for each of the next five fiscal years by 0.1% of the number 
of shares of common stock issued and outstanding as of the end of the 
immediately preceding fiscal year.

	In 1996, the Company assumed an employee stock option plan ("1993 
Company Plan") from Pet Food Warehouse which provided for the granting of 
incentive and nonqualified stock options with exercise prices equal to 
their fair market values on their grant dates that become exercisable over 
various periods and expire five or six years after the date of grant.  The 
common shares and exercise prices under this plan were adjusted based on 
the common share conversion rate per the merger agreement with Pet Food 
Warehouse.  No future grants will be made under this plan.

	In 1997, the Company assumed an employee stock option plan ("1989 
Company Plan") from PetCare which provided for the granting of incentive 
and non-qualified stock options with exercise prices equal to their fair 
market values on their grant dates that became exercisable over various 
periods and expire up to ten years after the date of grant.  The common 
shares and exercise prices under this plan were adjusted in accordance with 
the terms of the merger agreement with PetCare.  No further grants will be 
made under this plan.



<PAGE> 38
Information regarding the stock option plans follows:

<TABLE>
<S>                          <C>      <C>         <C>             <C>    <C>             <C>
       
                            1994 Company Plan                   1993 Company Plan        
                         ---------------------------------    ---------------------------------
                                                  Weighted                             Weighted
                                                  Average                              Average
                                   Option Price   Exercise             Option Price    Exercise 
                         Shares     Per Share      Price      Shares    Per Share       Price                          
                         ------    ------------   --------    ------   -------------   --------
Outstanding at 
  January 28, 1995          548   $       10.33   $  10.33       107   $ 8.05-$42.27   $  24.31   
Granted                     156   $12.33-$18.33   $  12.57       167   $14.95-$24.75   $  18.08   
Exercised                    (6)  $       10.33   $  10.33        --              --         --   
Cancelled                    (8)  $10.33-$12.33   $  11.49       (65)  $16.72-$27.23   $  24.31
                         ------    ------------    -------    ------    ------------    -------   
Outstanding at 
  February 3, 1996          690   $10.33-$18.33   $  12.58       209   $ 8.05-$42.27   $  19.73   
Granted                     333   $       23.17   $  23.17        41   $18.40-$23.58   $  18.51   
Exercised                   (50)  $       10.33   $  10.33        --   $16.68-$19.12   $  17.50   
Cancelled                   (47)  $10.33-$23.17   $  20.52       (41)  $8.05-$23.58   $  19.13
                         ------    ------------    -------    ------    ------------    -------   
Outstanding at 
  February 1, 1997          926   $10.33-$23.17   $  14.77       209   $14.95-$42.27   $  19.52   
Granted                     645   $22.50-$30.31   $  23.17        --              --   $     --   
Exercised                  (164)  $       10.33   $  10.33       (75)  $15.24-$27.21   $  20.11  
Cancelled                   (85)  $10.33-$23.17   $  20.52       (13)  $14.95-$42.27   $  23.71   
                         ------    ------------    -------    ------    ------------    -------
Outstanding at 
   January 31, 1998       1,322   $10.33-$30.31   $  18.89       121   $14.95-$27.73   $  18.74
                         ======    ------------    -------    ======    ------------    ------- 

Exercisable at 
  February 3, 1996          336   $       10.33   $  10.33        64   $ 8.05-$42.27   $  23.69   
Exercisable at 
  February 1, 1997          383   $       10.33   $  10.33       182   $14.95-$42.27   $  19.40 
Exercisable at 
  January 31, 1998          372   $10.33-$30.25   $  12.55       111   $14.95-$27.73   $  18.63   

Available for grant at 
  January 31, 1998          784                                   --                               


                                  Directors Plan                       1989 Company Plan        
                         ---------------------------------    ---------------------------------
                                                  Weighted                             Weighted
                                                  Average                              Average
                                   Option Price   Exercise               Option Price  Exercise		
                         Shares     Per Share       Price     Shares      Per Share      Price
                         ------    ------------   --------    ------   --------------  --------
Outstanding at 
  January 28, 1995            5   $       10.33   $  10.33       105   $ 7.70-$11.54   $   7.71
Granted                       6   $       12.33   $  12.33        78   $       11.54   $  11.54   
Exercised                    --              --         --        --   $          --   $     --
Cancelled                    --              --         --        --   $          --   $     --
                         ------    ------------    -------    ------    ------------    -------
Outstanding at 
  February 3, 1996           11   $10.33-$12.33   $  11.47       183   $ 7.70-$11.54   $   9.34    
Granted                       3   $       31.67   $  31.67         5   $       11.54   $  11.54   
Exercised                    --   $          --   $     --        --   $          --   $     --
Cancelled                    --              --         --        --   $          --   $     --
                         ------    ------------    -------    ------    ------------    -------
Outstanding at 
  February 1, 1997           14   $10.33-$31.67   $  15.96       188   $ 7.70-$11.54   $   9.40    
Granted                      12   $21.38-$22.50   $  21.67        --   $      11.54   $  11.54    
Exercised                    --   $          --   $     --      (134)  $ 7.70-$11.54   $   9.61   
Cancelled                    --   $          --   $     --        --              --         --   
                         ------    ------------    -------    ------    ------------    -------
Outstanding at 
  January 31, 1998           26   $10.33-$31.67   $  18.64        54   $ 7.70-$11.54   $   8.89   
                         ======    ------------    -------    ======    ------------    -------
Exercisable at 
  February 3, 1996           11   $10.33-$12.33   $  11.47        78   $ 7.70-$11.54   $   7.75    
Exercisable at 
  February 1, 1997           14   $10.33-$31.67   $  15.96       107   $ 7.70-$11.54   $   8.22    
Exercisable at 
  January 31, 1998           26   $10.33-$31.67   $  18.64        54   $ 7.70-$11.54   $   8.89    

Available for grant at 
  January 31, 1998           64                                   --                               

</TABLE>

In March 1998, options for 689 shares were granted under the 1994 Company 
Plan which vest in March 2001 and are exercisable at $17.44 per share, and 
options for 6,000 shares were granted under the Directors Plan that were 
immediately exercisable at $17.44 per share.

 (c) Accounting for Stock Options:

	The Company accounts for stock option plans under APB Opinion No. 25, 
"Accounting for Stock Issued to Employees", and related interpretations, 
under which no compensation expense was recognized.  Had compensation costs 
for the Company's stock option plans been determined based upon the fair 
value at the grant date for awards under these plans, consistent with the 


<PAGE> 39
methodology prescribed under SFAS No. 123, "Accounting for Stock-Based 
Compensation", the Company's net earnings and earnings per share would have 
been reduced by approximately $650 or $0.04 per share during 1995, the 
Company's net loss and loss per share would have been increased by $2,340, 
or $0.12 per share, during 1996, and the Company's net loss and loss per 
share would have been increased by $3,850, or $0.18 per share, during 1997.  
The pro forma change in net earnings (loss) reflects only options granted 
in 1995, 1996, and 1997.  Therefore, the full impact of calculating 
compensation costs for stock options under SFAS No. 123 is not reflected in 
the pro forma change in net earnings (loss) amounts presented above because 
compensation cost is reflected over the options vesting period of three 
years and compensation cost for options granted prior to January 1, 1995 is 
not considered.  The weighted average fair value of the options granted 
during 1995, 1996 and 1997 were estimated as $7.30, $12.01 and $11.65 on 
the date of grant using the Black-Scholes option pricing model with the 
following assumptions: no dividend yield, volatility of 66%, 52.7%, and 
47.5%, risk-free interest rate of 6.5%, 6.5%, and 6.0% for 1995, 1996 and 
1997, respectively, and an expected life of five years for all grants.
	 
	The following table summarizes information about the options 
outstanding under all stock option plans at January 31, 1998:
<TABLE>
   <S>                   <C>       <C>       <C>                 <C>      <C>
                          Options Outstanding               Options Exercisable  
                  -----------------------------------    ------------------------
                                Weighted
                                 Average     Weighted                    Weighted
   Range of                     Remaining    Average                     Average
   Exercise         Number     Contractual   Exercise       Number       Exercise
    Prices        Outstanding  Life (Years)   Price      Exercisable      Price 
                  -----------  ------------  --------    -----------     --------
   $10-$20               635       5.90      $  12.03           493       $11.82
   $20-$30               850       8.73      $  22.84            34       $22.98
   $30-$45                38       9.34      $  30.37            36       $30.37
                   ---------                               --------
                       1,523                                    563
                   =========                               ========

</TABLE>



<PAGE> 40
6.  INCOME TAXES

	Income taxes (benefit) consists of the following:
<TABLE>
      <S>                      <C>            <C>           <C>

                                            Years Ended    
                              ----------------------------------------
                               February 3,   February 1,   January 31,
                                  1996          1997          1998    
                              -----------    ----------    ----------
   Current:
      Federal                  $  1,090      $    958       $    416
      State                         340           171           (370)
                                -------       -------        ------- 
                                  1,430         1,129             46
                                -------       -------        ------- 
   Deferred:
      Federal                   (15,370)       (5,186)        (4,290)
      State                        (661)          (18)        (1,242)
                                -------       -------        -------
                                (16,031)       (5,204)        (5,532)
                                -------       -------        -------
   Income taxes (benefit)      $(14,601)     $ (4,075)      $ (5,486)
                                =======       =======        =======
</TABLE>
	A reconciliation of income taxes at the federal statutory rate of 34% 
with the provision for income taxes (benefit) follows:

<TABLE>
      <S>                      <C>           <C>             <C>
                                            Years Ended         
                               ---------------------------------------
                               February 3,   February 1,   January 31,
                                  1996          1997          1998    
                               ----------    ----------    ---------- 
   Income taxes at federal 
      statutory rate           $ (2,998)     $ (5,518)       $ (6,347)
   Non-deductible expenses            4         1,323           1,489
   State taxes, net of federal 
      tax benefit                  (233)          101          (1,064)
   Change in valuation 
      allowance                 (11,809)           --              --
   Other                            435            19             436
                                -------       -------         ------- 
                               $(14,601)     $ (4,075)       $ (5,486)
                                =======       =======         =======
</TABLE>
	The sources of significant temporary differences which gave rise to 
the deferred tax provision and their effects follow:
<TABLE>
   <S>                             <C>        <C>           <C>
                                            Years Ended           
                               ---------------------------------------
                               February 3,   February 1,   January 31,
                                  1996          1997          1998    
                               ----------    ----------    ----------
   Inventory                   $   (344)      $ (2,891)     $ (1,216)
   Deferred rent                   (420)        (1,072)         (588)
   Depreciation                     833          1,424         1,611
   Accrued fringes                 (527)           (96)         (699)
  Intangibles                       245           (178)        1,771
  Store closing costs            (1,182)        (1,833)       (1,941)
   Fixed assets                  (1,410)        (1,318)        1,128
   Other assets                      --             --        (2,358)
   Benefit of net operating
      loss carryforwards           (604)           943        (3,929)
   Other                           (216)          (183)          689
   Change in valuation 
      allowance                 (11,809)            --            --
  Prior year adjustments           (597)            --            --
                                -------        -------       -------
                               $(16,031)      $ (5,204)     $ (5,532)
                                =======        =======       =======
</TABLE>
	Deferred income taxes reflect the tax effect of temporary differences 
between the carrying amount of assets and liabilities for financial 
reporting purposes and the amounts used for income tax purposes.  
Significant components of the Company's deferred tax assets follow:




<PAGE> 41
<TABLE>
  <S>                                            <C>           <C>

                                                      Years Ended       
                                               -------------------------
                                               February 1,   January 31,
                                                  1997          1998    
                                               ----------    ----------

Deferred tax assets:
  Inventory                                    $ 5,033       $ 6,249
  Deferred rent                                  2,824         3,412
  Accrued fringes                                1,406         2,105
  Intangibles                                      553            --
  Store closing costs                            3,555         5,496
  Fixed assets                                   2,728         1,600
  Other assets                                      --         2,358
  Net operating loss carryforwards              10,693        14,622
  Other                                            370            --
                                                ------        ------
  Total deferred tax assets                     27,162        35,842
  Valuation allowance                           (4,900)       (4,900)
                                                ------        ------
  Net deferred tax assets                       22,262        30,942
                                                ------        ------
								
Deferred tax liabilities:
  Depreciation                                  (1,555)       (3,166)
  Intangibles                                       --        (1,218)
  Other                                             --          (319)
                                                ------        ------
  Total deferred tax liabilities                (1,555)       (4,703)
                                                ------        ------ 

Net deferred tax assets                        $20,707       $26,239
                                                ======        ====== 
</TABLE>
	Following the resolution of the Internal Revenue Service examination 
of certain of the Company's federal income tax returns during the year 
ended February 3, 1996, the valuation allowance of $11,809 was eliminated 
and income taxes provided in prior years adjusted.  The valuation allowance 
of $4,900 at February 1, 1997 and January 31, 1998 relates to net operating 
loss carryforwards of PetCare.  In assessing the realizability of deferred 
tax assets, management considers whether it is more likely than not that 
some portion or all of the deferred tax assets will not be realized.  
Management considers the scheduled reversal of deferred tax liabilities, 
projected future taxable income, and tax planning strategies in making this 
assessment.  Based upon the level of historical taxable income and 
projections for future taxable income over the periods which the deferred 
tax assets are deductible, management believes it is more likely than not 
that the Company will realize the benefits of these deductible differences, 
net of the valuation allowance.

	At January 31, 1998, the Company has available net loss carryforwards 
of $39,239 for federal income tax purposes, which begin expiring in 2004, 
and $36,406 for state income tax purposes, which begin expiring in 1998.


7.  DISPOSAL OF STORES

	In November 1995, Pet Food Warehouse sold certain assets of its eight 
retail stores in Michigan and Ohio for $2,426 in cash pursuant to an Asset 
Purchase Agreement and Addendum (the Agreements).  The Agreements provided 
for the sale of certain assets used in the operation of the Michigan and 
Ohio stores and the assumption of certain liabilities by the buyer.  The 
sale of these assets resulted in a loss on the sale of stores of $3,500 in 
the fourth quarter of fiscal 1995 from, among other things, rent 
concessions and the loss on disposal of inventory and property and 
equipment.  Pursuant to the Agreements, if the buyer defaults under the 
sublease arrangements, the Company is contingently liable for amounts owing 
under the lease agreements.



<PAGE> 42
8.  EMPLOYEE SAVINGS PLAN

	The Company has an employee savings plan which permits eligible 
participants to make contributions by salary reduction pursuant to section 
401(k) of the Internal Revenue Code.  Effective April 1, 1997, the Company 
adopted a matching provision for 50% of the first 3% of compensation that 
is contributed by each participating employee.  In connection with the 
required match, the Company's contribution to the plan was $58 in 1996 and 
$199 in 1997.  Prior to 1996, there was no matching contribution.


9. Commitments and Contingencies

	Because of the nature of its activities, the Company is subject to 
legal actions which arise out of the normal course of business. In the 
opinion of management, based in part upon the advice of outside counsel, 
the ultimate disposition of these matters will not have a material adverse 
effect on the consolidated financial position, results of operations, or 
liquidity of the Company.



<PAGE> 43

EXHIBIT INDEX
<TABLE>
<C>   <S>                                                                <C>

                                                                      Sequentially
                                                                        Numbered
Number                            Document                                 Page   
------                            --------                            ------------
2.1   Agreement and Plan of Merger, dated as of October 3, 1996,          --
      by and among Petco, PASI Acquisition Corp. and Pet Food
      Warehouse, Inc. (1)
3.1   Amended and Restated Certificate of Incorporation, as               --
      amended. (1)    
3.2   Amended and Restated By-Laws. (2)                                   --
4.1   Form of Common Stock Certificate. (2)                               --
10.1  Credit Agreement, dated January 30, 1998 between the Company        51
      and Union Bank, as Syndicating Agent. (3)
10.2  Term loan Agreement, dated January 29, 1996, between the            --
      Company and Union Bank. (4)
10.3  First Amendment to Term loan Agreement, dated April 24, 1997,       --
      between the Company and Union Bank.(5)
10.4  Distribution Center Lease, dated March 24, 1994, between the        --
      Company and The Principal Mutual Life Insurance Company for     
      10401 Seventh Street, Rancho Cucamonga, California. (6)
10.5  Lease Dayton (3)                                                   120
10.6  Distribution Center Lease, dated February 20, 1998 between the     213 
      Company and Industrial Developments International, Inc. for  
      3801 Rock Creek Boulevard, Joliet, Illinois. (3)
10.7  Lease Mira Loma (3)                                                274
10.8  Master Equipment Lease Agreement, dated October 19, 1992,           -- 
      between the Company and Sanwa Business Credit Corporation. (2)
10.9  Master Equipment Lease Agreement, dated September 21, 1994,         --
      between the Company and General Electric Credit Corporation. (6)
10.10 Master Equipment Lease Agreement, dated March 10, 1995, between     --
      the Company and KeyCorp Leasing Ltd. (4)
10.11 Master Equipment Lease Agreement, dated November 15, 1995,          --
      between the Company and Fleet Credit Corporation. (4)
10.12 Master Lease Agreement, dated December 27, 1995, between the        --
      Company and Newcourt Financial USA, Inc. (4)
10.13 Master Lease Agreement, dated September 28, 1995, between the       --
      Company and USL Capital Corporation. (4)
10.14 Employment Letter Agreement, dated October 3, 1996, by and          --
      between Petco and Marvin W. Goldstein. (1)
10.15 Employment Agreement, dated March 17, 1996, between the Company     --
      and Brian K. Devine. (4)
10.16 Form of Indemnification Agreement between the Company and           --
      certain officers and directors. (2)
10.17 Form of Retention Agreement for executive officers. (3)            366
10.18 Form of Retention Agreement for officers. (3)                      375
10.19 Petco Animal Supplies 401(k) Plan. (2)                              --
10.20 The 1994 Stock Option and Restricted Stock Plan for Executive       --
      and Key Employees of Petco Animal Supplies, Inc., as amended. (7)
10.21 First Amendment to 1994 Stock Option and Restricted Stock Plan      --
      for Executive and Key Employees of Petco Animal Supplies, Inc. (5)
10.22 Petco Animal Supplies, Inc. Group Benefit Plan, dated July 29,      --
      1991, as amended. (4)
10.23 Petco Animal Supplies, Inc. Directors' 1994 Stock Option Plan,      --
      as amended. (4)
10.24 Form of Petco Animal Supplies, Inc. Nonstatutory Stock Option       --
      Agreement. (2)
10.25 Form of Petco Animal Supplies, Inc. Incentive Stock Option          --
      Agreement.  (2)



<PAGE> 44
10.26 Form of Petco Animal Supplies, Inc. Restricted Stock Agreement. (2) --
10.27 Form of Petco Animal Supplies, Inc. Nonstatutory Stock Option       -- 
      Agreement (Directors' 1994 Stock Option Plan).  (2)
10.28 The Pet Food Warehouse, Inc. 1993 Stock Option Plan (8)             --
10.29 Pet Food Warehouse, Inc. Amendment to 1993 Stock Option Plan. (9)   --
10.30 The PetCare Plus, Inc. 1989 Stock Option Plan (the "1989 Stock      --
      Option Plan"). (10)
10.31 Form of Incentive Stock Option Agreement under the 1989 Stock       --
      Option Plan. (10)
10.32 Form of Nonqualified Stock Option Agreement under the 1989          --
      Stock Option Plan. (10)
21.1	Subsidiaries of the registrant. (3)                                  47
23.1	Consent of KPMG Peat Marwick LLP. (3)                                48
23.2	Consent of Coopers & Lybrand L.L.P. (3)                              49
27.1	Financial Data Schedule. (3)                                         50
</TABLE>
_____________
(1) Filed as an exhibit to the Company's Registration Statement on Form S-4
    dated October 23, 1996, File No. 333-14699, including Amendment No. 1
    thereto dated November 20, 1996.
(2) Filed as an exhibit to the Company's Registration Statement on Form S-1 
    dated January 13, 1994, File No. 33-77094, including Amendment No. 1 
    thereto dated February 24, 1994 and Amendment No. 2 thereto dated March 
    11, 1994.
(3) Filed herewith.
(4) Filed as an exhibit to the Company's Registration Statement on Form S-3   
    dated April 4, 1996, File No. 333-3156, including Amendment No. 1 
    thereto dated April 24, 1996.
(5) Filed as an exhibit to the Company's Current Report on Form 10-K dated 
    April 30, 1997.
(6) Filed as an exhibit to the Company's Registration Statement on Form S-1 
    dated March 31, 1995, File No. 33-90804, including Amendment No. 1 
    thereto dated April 27, 1995.
(7) Filed as an exhibit to the Company's Proxy Statement dated May 24, 1996 
    relating to the 1996 Annual Meeting of Stockholders of Petco.
(8) Filed as an exhibit to Pet Food Warehouse, Inc.'s Registration 
    Statement on Form SB-2 dated July 6, 1993, File No. 33-65734C, 
    including Amendment No. 1 thereto, dated effective August 13, 1993, 
    Post-Effective Amendment No. 1 thereto, dated January 7, 1994, Post-
    Effective Amendment No. 2 thereto, dated February 1, 1994, and Post-
    Effective Amendment No. 3 thereto, dated February 10, 1994.
(9) Filed as an exhibit to the Company's Registration Statement on Form S-8 
    dated February 26, 1997, File No. 333-14699.
(10)Filed as an exhibit to the Company's Registration Statement on Form S-8 
    dated March 20, 1998, File No. 333-48311.



<PAGE> 
SIGNATURES

	Pursuant to the requirements of Section 13 or 15(d) 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, on the 
30th day of April, 1998.

                                  PETCO ANIMAL SUPPLIES, INC.


                                  By: /s/BRIAN K. DEVINE 
                                     -------------------------------------
                                     Brian K. Devine
                                     Chairman of the Board, President and
                                     Chief Executive Officer

	Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons on behalf of the 
Registrant and in the capacities and on the dates indicated.

        Signature                     Title                      Date
        ---------                     -----                      ----

/s/BRIAN K. DEVINE        Chairman of the Board, President   April 30, 1998
-----------------------
Brian K. Devine           and Chief Executive Officer
                          (Principal Executive Officer)


/s/RICHARD C. ST. PETER   Executive Vice President, Chief    April 30, 1998
-----------------------
Richard C. St. Peter      Financial Officer and Secretary
                          (Principal Financial Officer)


/s/JAMES M. MYERS         Senior Vice President, Finance     April 30, 1998
-----------------------
James M. Myers            (Principal Accounting Officer)


/s/ANDREW G. GALEF        Director                           April 30, 1998
-----------------------
Andrew G. Galef


/s/RICHARD J. LYNCH       Director                           April 30, 1998
-----------------------
Richard J. Lynch


/s/JAMES F. McCANN          Director                         April 30, 1998
-----------------------
James F. McCann


/s/PETER M. STARRETT      Director                           April 30, 1998
-----------------------
Peter M. Starrett



<PAGE> 46


                                                              Exhibit 21.1

               


PETCO ANIMAL SUPPLIES, INC.

SUBSIDIARIES

<TABLE>
<S>                                                        <C>                 

                      Name                            Jurisdiction of Incorporation
                      ----                            -----------------------------
International Pet Supplies and Distribution, Inc.              California

Pet Nosh Consolidated Co., Inc.                                 New York

</TABLE>


<PAGE> 47

                                                          Exhibit 23.1

The Board of Directors
Petco Animal Supplies, Inc.:

We consent to incorporation by reference in the registration statements 
(Nos. 33-82302, 33-95352, 333-04442, 333-26301, and 333-48311) on Form S-8 
and (No. 333-14699) on Post-Effective Amendment No. 1 on Form S-8 to Form 
S-4 of Petco Animal Supplies, Inc. of our report dated April 17, 1998, 
relating to the consolidated balance sheets of Petco Animal Supplies, Inc. 
and subsidiaries as of February 1, 1997 and January 31, 1998, and the 
related consolidated statements of operations, stockholders' equity, and 
cash flows for each of the years in the three-year period ended January 31, 
1998, which report appears in the January 31, 1998, annual report on Form 
10-K of Petco Animal Supplies, Inc.


                                        KPMG Peat Marwick LLP

San Diego, California
April 28, 1998




<PAGE> 48

                                                          Exhibit 23.2


CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We consent to the incorporation by reference in the registration statements 
of Petco Animal Supplies, Inc. on Form S-3 (File No. 333-45889) and  Form 
S-8 (File No. 333-48311) of our report dated April 16, 1997, on our audits 
of the financial statements of PetCare Plus, Inc. (which are included in 
the restated pooled financial statements of Petco Animal Supplies, Inc.) as 
of January 25, 1997 and for the years ended January 25, 1997 and January 
27, 1996, which report is included in this Annual Report on Form 10-K.

                                        Coopers & Lybrand L.L.P.

Chicago, Illinois
April 29, 1998