Petco ($WOOF) on Thursday went public for the third time in its 56-year history following a banner year for the pet care and supply industry, which benefited from remote-working pet owners spending more time than ever with their animal companions.
"It was always the plan to go public. The question was when not if," CEO Ron Coughlin told Cheddar. "The market … is strong and it's going to be strong well into the future, so it was a great time to do it."
The company debuted on the Nasdaq at $26 per share and hit $29 at the close, up 63 percent from the initial offering. Coughlin said Petco will cut its debt in half with this transaction.
This return to public markets places Petco in direct competition with Chewy, the online pet product retailer owned by industry giant PetSmart, which had a successful IPO in 2019
"We're playing a different hand," he said. "Our hand is being the pet parent's partner for the health and wellness of their pet."
Coughlin touted the company's suite of veterinary services as well as its training and grooming offerings, which "neither the online players or the mass players" have.
This emphasis on the health and wellness of pets was also evident in Petco's announcement last year to no longer sell shock collars at its stores.
The executive also highlighted the company's focus on selling higher-quality pet food.
"Actually all of the growth of the pet food category is going to come from premium and super-premium, where we have particular strength."
Petco, which has 1,400 brick-and-mortar locations across the U.S., is banking on the continued customer value in maintaining a physical presence.
"Our pet care centers are the salons for pets. They're the hospital for pets. In some ways, they're the schools for pets with our training," he said.
The company's in-house research showed that 39 percent of customers want an omnichannel experience: both online and retail offerings.
"I know this whole theory about retail locations being albatrosses, but for us, they are absolutely, absolutely a competitive advantage," Coughlin said.
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