FINANCE

It’s raining cats and dogs on Wall Street as Chewy makes public debut

BY Marianne Wilson

Chewy.com has yet to turn a profit, but that’s not scaring off investors.

Chewy.com, the online pet supplies retailer owned by PetSmart, made its public debut on Friday, pricing its IPO at $22 per share, which was above its previous range. The offering raises just over $1 billion and values the retailer at $8.8 billion.

Chewy, which will trade on the New York Stock Exchange under the ticker “CHWY,” was purchased by PetSmart in May 2017 for about $3 billion in cash and lien notes. PetSmart will remain majority owner of Chewy and intends to apply funds generated by the IPO to working capital and general corporate purposes. The two companies continue to coordinate purchases, giving both stronger bargaining power, Chewy said in IPO registration documents.

According to a report from digital intelligence firm Jumpshot, Chewy made strong improvements in 2018, growing its online transactions by double-digit percentages and carving out a retail niche. But it remains unprofitable. During fiscal 2018, Chewy’s sales rose about 75% to $3.5 billion from $2.1 billion. Its net loss shrank to $268 million from $338 million.

Since being acquired by PetSmart, Chewy has grown its private-label business and launched an online pet drugstore. In its prospectus, the company said it will seek continued growth by broadening the array of products it offers, finding new customers, and expanding further into pharmacy.

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