Chewy IPO Raises More Than $1 Billion
Chewy Inc. raised $1.02 billion through its initial public offering (IPO) on Thursday, June 13. The company sold 46.5 million shares at $22 each—significantly higher than the original $17-$19 target price range that was set in the original registration statement it filed with the U.S. Securities and Exchange Commission (SEC) in April. The IPO valued the company at $8.8 billion, which is roughly double the $4.45 billion valuation that PetSmart reportedly set last year in private communications with investors.
Trading of Chewy stock began this morning on the New York Stock Exchange (NYSE) under the ticker symbol “CHWY."
Over the past eight years, Chewy's net sales grew from $2 million to more than $3.5 billion, including a nearly 68 percent increase from FY17 ($2.1 billion) to FY18 ($3.5 billion). At the same time, the company’s gross profit margin has grown for at least the past three years, going from 16.6 percent in FY16 to 20.2 percent in FY18.
Along with increases in gross sales and profit margin, Chewy has experienced significant growth in both the size of its customer base and its net sales per customer. According to the company's SEC filing, its number of “active customers” grew from 3.3 million in FY16 to 10.6 million in FY18, and its per-customer net sales increased from $297 to $334.
Despite this growth, Chewy has operated at a net loss of -$267.89 million in FY2018 and -$338.057 million in FY2017.
PetSmart acquired Chewy in 2018 for $3.35 billion. The transaction added a reported $2 billion of debt to the already debt-loaded PetSmart.