U.S. stock futures mixed; Nvidia earnings spark little cheer
PLANTATION, Fla. - Chewy, Inc. (NYSE:CHWY), the $18 billion market cap pet products retailer that has delivered a remarkable 65% return over the past year according to InvestingPro data, announced Monday that its largest shareholder, Buddy Chester Sub LLC, an entity affiliated with BC Partners, has commenced a $1 billion public offering of Chewy’s Class A common stock. The selling stockholder will also grant underwriters a 30-day option to purchase up to an additional $150 million in shares.
Chewy will not receive any proceeds from the offering as it is not selling any shares. However, the pet products retailer, which InvestingPro analysis shows maintains strong financial health with sufficient cash flows to cover obligations, has agreed to purchase and retire $100 million worth of its Class A common stock from the selling stockholder at the same price paid by underwriters in the offering.
A special committee of Chewy’s Board of Directors, consisting of independent directors not affiliated with BC Partners, approved the share repurchase. The company stated this transaction is separate from its existing $500 million share repurchase program authorized on May 24, 2024, which remains unaffected.
J.P. Morgan is serving as the sole underwriter for the offering. While the share repurchase is contingent upon the closing of the offering, the offering itself is not dependent on the completion of the repurchase.
The company has filed a registration statement with the Securities and Exchange Commission for the offering, with a preliminary prospectus supplement and accompanying prospectus to be filed.
According to the press release statement, Chewy partners with approximately 3,200 brands in the pet industry and offers around 130,000 products and services through its websites and mobile applications. The company has demonstrated solid execution with $12.1 billion in revenue and a healthy 29% gross margin, according to recent InvestingPro data, which offers 13 additional key insights about Chewy’s financial performance and valuation metrics in its comprehensive Pro Research Report.
In other recent news, Chewy Inc. announced a significant $1 billion share offering by its largest shareholder, Buddy Chester Sub LLC, affiliated with BC Partners. Chewy will not receive proceeds from this sale but will repurchase $100 million of Class A common stock from the selling stockholder, with the repurchased shares set to be canceled. UBS maintained a Neutral rating on Chewy, noting strong sales momentum but expressing concerns about profitability, leading to a downward revision of its fiscal year 2025 adjusted EBITDA estimate. Needham also reiterated a Hold rating due to valuation concerns despite acknowledging Chewy’s strong market position and expected growth. Meanwhile, Guggenheim raised its price target to $45, highlighting robust customer growth and favorable operating results. JPMorgan increased its price target to $47, maintaining an Overweight rating, citing customer growth and profitability improvements as key factors. JPMorgan also noted Chewy’s potential to exceed its revenue guidance, projecting fiscal 2025 sales of $12.45 billion. These developments underscore Chewy’s dynamic market position and evolving financial outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.