Market Overview

Chewy Investors Go Fetch: Pet 'E-Tailer' Opens Well Above IPO Price

Chewy Investors Go Fetch: Pet 'E-Tailer' Opens Well Above IPO Price

Chewy Inc (NYSE: CHYW) shares opened for trade Friday at $36. The initial public offering of more than 5.6 million shares of Class A common stock was priced between $19 and $21 per share.

The stock is trading on the NYSE under the symbol "CHWY."

Morgan Stanley, JPMorgan, Allen & Co and Bank of America Merrill Lynch led the 12-member underwriting team.

The Company

Launched in 2011, Chewy promotes itself as the largest pure-play pet "e-tailer" in the U.S., offering virtually everything a pet needs. The company partners with 1,600 brands in the pet industry and also offers its own private brands.

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"Through our website and mobile applications, we offer our customers more than 45,000 products, compelling merchandising, an easy and enjoyable shopping experience, and exceptional customer service," the company said in its S-1 filing.

Chewy also offers an Autoship subscription program, providing customers — whom it calls "pet parents" — a convenient and flexible automatic reordering process.

The Finances

For 2018, Chewy reported net sales of $3.53 billion, up about 68% from $2.104 billion in 2017. The net loss narrowed from $338.06 million to $267.89 million.

From fiscal 2012 to fiscal 2018, Chewy's net sales per active customer grew from $223 to $334 and its net sales grew from $26 million to $3.5 billion.

The company sees the pet industry in the U.S. as a burgeoning one, with attractive market potential.

The industry was estimated at $70 billion in sales in 2017. Spending on pet products and services is projected to continue its historically consistent growth at a 4.2-percent CAGR from 2017 to 2022, the company said, citing Packaged Facts.

2019 has been a record year for IPOs. Renaissance Capital's early 2019 research portended good things for the IPO market: in January, the financial firm cited a “large backlog” of U.S. IPOs that grew during the federal shutdown.

Related Links:

Chewy IPO: A Hybrid Play On Lucrative Pet Care Market, E-Commerce

2019: A Record Year For IPOs?

Posted-In: News IPOs Best of Benzinga


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