Shares of Petco Health and Wellness grew by 63% in first day of trading on Nasdaq. The company owns 1470 Petco stores for animals and veterinary clinics 105, the user indicates the growth of electronic sales and services of fast delivery.
The company’s IPO Petco Health and Wellness was held on Thursday, its shares began to be traded on Nasdaq under the symbol WOOF.
Petco IPO was expected, successful amid investors ‘ optimism about the prospects of the sphere of goods and services for Pets, which showed a burst of growth during a pandemic Covid-19.
On Wednesday evening, the company Petco assessed its initial public offering of 48 million shares at $18 to raise about $816,5 million, above the expected price target from $14 to $17.
Petco shares commenced trading on Thursday at a price of $26, which is 44% above their debut price and has reached the level of $31,08 during the day.
At the close of trading shares of Petco increased 63.3% to $29,40, which means the market values the company at $6.4 billion Petco lead underwriters in the IPO were Goldman Sachs and Bank of America.
This is the third time Petco went public, its access to public capital markets occurred in 1994 and in 2002, after which it passed into private ownership.
Petco IPO is happening at a good time for the field of pet products and services for animals, since during a pandemic, Covid-19, according to a survey by LendingTree in October, every third owner of Pets in the United States increased spending on their Pets.
Database of Shelter Animals Count, which tracks 500 of the animal shelters in the United States, reports that in 2020 the number of animals that received family, increased by 15% compared to the year 2019.
According to the American Association of products for Pets, last year the cost of food, medication and pet care reached a record $99 billion.
In conversation with CNBC, CEO of Petco Ron Coughlin noted that his company has a competitive advantage over their competitors.
Petco owns 1470 shops of pet products and over the last 18 months has increased its veterinary business with 15 to 105 clinics. Thus, in most cases, the clinic merged with zoo-shops in the same building, forcing pet owners to buy supplies and food, while their Pets are at the clinic.
Coughlin said that over the past six years, the company actively invested in digital opportunities: online store pickup of online shopping and delivery on the same day. Today delivery the same day is 30% of online orders Petco, which is using its physical stores as warehouses of essential goods.
The head of the Petco also said that about 70% of the goods for Pets are exclusive and are sold exclusively in its stores, for example, food private brands.
Coughlin noted that last year American families joined in 3.3 million new Pets, and he expects boom of Pets will continue in the first half of 2021.
Comparing financial results for the 39 weeks ended October 31, 2020, compared with the same period a year earlier, Petco reported revenue growth of 9% to $3.6 billion, but the company is still unprofitable: $20 million for the period compared to a net loss of $88 million a year earlier. The company repair shops, and hopes that a greater number of medical services in its clinics will increase profits.
In the event an IPO on the Nasdaq on Thursday, Coughlin brought his 12-year-old Labrador Retriever Yummi.