Petco CEO Says Pandemic Pet Growth, New Digital Choices Will Gas Firm Development
Ron Coughlin, CEO of Petco Health and Wellness, said the retailer is ready for growth as it sells exclusive pet supplies, offers e-commerce services like roadside collection and expands its veterinary services.
The company’s shares will trade under the symbol WOOF on Thursday. On Wednesday night, the IPO was valued at $ 18 to raise about $ 816.5 million, better than its targeted price of $ 14-17.
In an interview on CNBC’s “Squawk on the Street” prior to the stock’s first trading, Coughlin said the company’s customer base grew during the pandemic as families adopt new pets. He said 3.3 million new pets were added to the family last year and he expects the pet boom to continue into the first half of 2021.
“People are at home, they are a little depressed and they want a bundle of joy in their life,” he said. “So we’re going to help feed these pets, we’re going to help train these pets, groom these pets, and vaccinate those pets. I think it’s actually good for America and our souls, and it’s good for Petco.”
The demand for pet dealers has grown significantly in recent years as Americans treat their pets as family members and become more concerned with toys, accessories, and organic or fresh foods. But there was also more competition. Online pet retailer Chewy has gained market share with a subscription-based service that delivers pet food and other consumables to customers’ doors. Their stocks are up more than 260% over the past year.
Coughlin said Petco has assets that its rivals don’t. The veterinary business has grown from 15 to 105 clinics in the last 18 months. Around 70% of pet products are exclusively available in stores, for example from retail brands for food.
The former HP executive said the company has invested aggressively in digital options over the past year and a half, including in-store and roadside pickup of online purchases and same-day delivery. He said same day delivery now accounts for 30% of ecommerce orders.
“The more technology we’ve developed, the faster our digital business has grown,” he said.
Petco is owned by the Canada Pension Plan Investment Board and private equity firm CVC Capital Partners. The IPO values the retailer at $ 4 billion.