During its IPO, Chewy Inc. had sold about 46.5 million shares, about 10 percent up from originally planned 41.6 million shares. The offering raises just over $1 billion and values the retailer at $8.8 billion. Between 2012 and 2018, Chewy's sales increased from $26 million to $3.5 billion.
A year ago, Chewy announced offers of $3.5 billion, up 67% from 2017. The company was valued at more than $15 billion following the stock sale. Around 90% of dog owners and 86% of cat owners consider their pets to be part of their family, according to 2018 data from the market research firm Packaged Facts. "That said, I can understand why any satisfied Chewy customer might want to put some away right here right now because they love the company that much".
Americans spent more than $72 billion on their pets previous year, with Chewy's 31% of USA online sales surpassed only by Amazon.com Inc.'s 55% share, according to the American Pet Products Association.
Chewy co-founder Ryan Cohen sees plenty of growth left for the company and long gone are the company's early days when it struggled to attract capital.
Chewy's IPO should give some financial relief to PetSmart, which is saddled with more than $8 billion of debt due over the next six years.
The IPO comes after PetSmart settled a dispute with lenders in April over the transfer of a portion of its stake in Chewy to certain PetSmart subsidiaries.
The company faces stiff competition from Amazon, which also sells pet products.
After its IPO, parent PetSmart will own about 70% of Chewy's common stock and hold 77% voting power.
The stock is expected to trade under the ticker CHWY, and an early indication showed the stock was set to open between $32.50 and $35 a share, Bloomberg reported.
Morgan Stanley, JP Morgan, and Allen & Company are together acting as joint lead underwriters for the offering.