Petco Health and Wellness CEO Ron Coughlin said the retailer is poised for growth as it sells exclusive pet supplies, offers e-commerce services such as curbside pickup and expands its veterinary services.
The company’s shares started trading Thursday under the ticker symbol WOOF. It opened at $26, up 44% from its initial public offering price of $18 to raise $816.5 million. That’s also better than the $14 to $17 price that its owners Canada Pension Plan Investment Board and private equity firm CVC Capital Partners had originally targeted.
In an interview on CNBC’s “Squawk on the Street” ahead of the stock’s initial trade, Coughlin said the company’s customer base has grown during the pandemic as families adopt new pets. He said 3.3 million new pets joined families last year and he expects that pet boom will continue into the first half of 2021.
“People are at home, they’re a little depressed, and they want a bundle of joy in their life,” he said. “So we’re going to help feed those pets, we’re going to help train those pets, groom those pets and vaccinate those pets. I think it’s actually good for America and our souls and it’s good for Petco.”
Pet retailers have seen a surge in demand in recent years as Americans treat their pets as family members and splurge more on toys, accessories and organic or fresh food. Yet there’s also been more competition. Online pet retailer Chewy has gained market share with a subscription-based service that delivers pet food and other supplies to customers’ doors. Its shares have risen more than 260% in the past year.
Coughlin said Petco has assets that its rivals don’t have. It has grown its veterinary business from 15 to 105 clinics in the last 18 months. About 70% of its pet products are exclusive to its stores, such as private-label food brands.
The former HP executive said the company has aggressively invested in digital options in the past year and a half, including in-store and curbside pickup of online purchases and same-day delivery. He said same-day delivery now makes up 30% of its e-commerce orders.
“The more technology we’ve laid down, the faster our digital business has grown,” he said.
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