Home Business Petco shares surge more than 60% as it returns to public market

Petco shares surge more than 60% as it returns to public market

A customer exits a Petco Animal Supplies Inc. store in Clark, New Jersey.

Ron Antonelli | Bloomberg | Getty Images

Shares of Petco Health and Wellness Company shot up by more than 60% in their debut on Nasdaq on Thursday, reflecting Wall Street’s appetite for investing in the industry during the pandemic-fueled pet boom.

Petco opened at $26, about 44% above its IPO price, but shares were recently trading at about $29.

On Wednesday night, the company had priced its initial public offering at $18 to raise about $816.5 million, higher than the $14 to $17 expected price target. It’s trading under the ticker symbol WOOF. Petco is owned by Canada Pension Plan Investment Board and private equity firm CVC Capital Partners.

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 about 1,470 stores across the U.S. and Puerto Rico, including more than 100 in-store veterinary hospitals.

Petco’s customer base has grown during the pandemic, as more Americans adopt new dogs and cats or get other critters, like lizards and hamsters. The demand for pet supplies and accessories has also grown over the years as owners treat their pets as part of the family. That’s inspired them to spend more on toys and accessories and upgrade to fresh or organic or fresh food.

As families adopt and foster new pets, they’re buying supplies from dog beds and crates to leashes. Families who had dogs, cats, fishes or other creatures have tended to spend more, too, as they buy toys or treats to keep their pets and themselves entertained.

Yet it also faces stiffer competition. Online rival Chewy‘s shares have risen more than 250% in the past year. The company has a subscription-based model that automatically replenishes pet supplies for owners, such as dog food or cat litter. Barkbox, a provider of subscription boxes of dog treats, said last month that it will go public through a merger with a SPAC.

 —Reporting from Reuters contributed to this story.

Correction: Petco shares trade on the Nasdaq exchange. A previous version of this story misstated the exchange.

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