PLANTATION, Fla. - Chewy, Inc. (NYSE: CHWY), a prominent online retailer for pet products valued at $13.26 billion, has disclosed the initiation of a public offering for $500 million of its Class A common stock, currently owned by Buddy Chester Sub LLC, an entity linked to BC Partners, Chewy's principal shareholder. According to InvestingPro data, the company's stock has surged over 37% in the past six months, though it currently trades at a high earnings multiple. The announcement made today also includes the option for underwriters to purchase an additional $75 million of Class A common stock within a 30-day period.
In a separate transaction, Chewy has agreed to repurchase $50 million worth of Class A common stock from the Selling Stockholder at the same price the underwriters will pay in the public offering. This buy-back, known as the Concurrent Repurchase, will see the acquired shares cancelled and retired. It is important to note that this transaction is independent of Chewy's ongoing $500 million share repurchase program, which remains unaffected.
The Concurrent Repurchase is contingent upon the completion of the public offering but does not condition the offering itself. Barclays (LON:BARC) is serving as the sole underwriter for the offering. InvestingPro analysis shows Chewy maintains a GOOD financial health score, with sufficient cash flows to cover interest payments and moderate debt levels. While market conditions will influence the offering's progress, no assurance can be given regarding its completion or timing.
The registration statement for the offering, including a prospectus, has been filed with the Securities and Exchange Commission (SEC). Prospective investors can access these documents on the SEC's website or request them from Chewy or Barclays.
Chewy emphasizes that the present communication does not constitute an offer to sell or a solicitation to buy the securities mentioned. Moreover, the sale of these securities will not occur in any jurisdiction where such an offering would be prohibited before registration or qualification under the applicable securities laws.
The information presented in this article is based on a press release statement from Chewy, Inc. For deeper insights into Chewy's financial position and 12 additional exclusive ProTips, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Chewy Inc (NYSE:CHWY). has witnessed several significant developments. The company's largest shareholder, Buddy Chester Sub LLC, has initiated a public offering of $500 million worth of Chewy's Class A common stock. Concurrently, Chewy has agreed to repurchase $50 million of its Class A common stock from the selling shareholder.
In the realm of analyst ratings, RBC Capital has maintained an Outperform rating on Chewy, citing positive trends in the pet industry and a return to high single-digit top-line growth. The firm has also raised its price target for Chewy from $39 to $42. TD Cowen has followed suit, increasing its price target for Chewy from $38 to $39 while maintaining a Buy rating, following Chewy's third-quarter earnings that surpassed consensus estimates for both revenue and EBITDA.
RBC analysts have also named Chewy as one of their top stock picks in the U.S. Hardlines/Broadlines & Food Retail sector. This recognition is due to Chewy's potential in the market.
In terms of financial performance, Chewy's third-quarter revenue came in at $2.88 billion, slightly exceeding the consensus of $2.86 billion. This was primarily due to a 9.9% year-over-year increase in Autoship customer sales. However, non-Autoship customer revenue declined by 13.4% year-over-year.
These are some of the recent developments that have shaped Chewy's current position in the market.
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