Dog gone PetSmart now carries more than $500 million worth of capital lease obligations on its balance sheet, with just over $180 million in unrestricted cash. But that doesn't worry me as much as the ongoing sales pressure and margin reductions implied by management's revised guidance. It also doesn't help that anyone can walk into a Kroger (NYSE:KR) store and find a perfectly sufficient, albeit spartan, selection of pet supplies. Company management also cited a correlation between lower housing starts and lower demand for pets.