Petco Health & Wellness shares shot up more than 60% on their debut on the Nasdaq on Thursday, reflecting Wall Street’s appetite for investment in the industry during the Kovid epidemic-fueled pet boom.
Petco opened at $ 26, up 44% from its IPO price, but the shares were recently trading at around $ 30.
On Wednesday night, the company raised its initial public offering price by $ 18 to $ 816.5 million, exceeding the projected price target of $ 14 to $ 17. It is traded under the ticker symbol WOOF.
The San Diego-based pet supply retailer was founded in 1965. It went public in 1994, but was taken private when its ownership changed hands. It has approximately 1,470 stores in the US and Puerto Rico, including more than 100 in-store Veterinary Hospitals.
Petco’s customer base has grown during the epidemic, as more Americans adopt new dogs and cats or acquire other critters such as lizards and hamsters. The demand for pet supplies and accessories has also increased over the years as owners consider their pets to be part of the family. This motivates them to spend more on toys and accessories and to upgrade fresh or organic food.
As families adopt and raise new pets, they are supplying everything from dog beds and crates to leashes. Families that had dogs, cats, fish, or other creatures have tended to spend more, as well as buy toys or treats to entertain their pets and themselves.
Yet it also faces stiffer competition. Shares of online rival Chevy have risen more than 250% in the past year. The company has a membership-based model that caters to pet supplies for owners, such as dog food or kittens. Barkbox, a provider of subscription boxes for Dog Treats, said last month that it would go public through a merger with SPAC.
In an interview with CNBC’s “Squeak on the Street”, CEO Ron Coughlin stated that the company has a competitive advantage over its rivals. He said it is adding VT services to its stores, which motivates pet owners to buy supplies and food. He said that it could use its stores to fulfill online orders. And he said that its same-day delivery could beat competitors at speed and price.
Correction: Petco traded on the Nasdaq exchange. The previous version mistook the exchange.