The Chewy.com application is displayed on an Apple Inc. iPhone.

Chewy.com, the online pet product retailer owned by PetSmart, priced its IPO at $22 per share Thursday, above the expected range, according to a person familiar with the offering.

The offering raises just over $1 billion and values the retailer at $8.8 billion. Chewy sold roughly 46 million shares, 5 million more than expected, after upping its expected range to $19 to $21 earlier this week.

PetSmart, which is backed by private equity firm BC Partners, acquired Chewy in 2017 for roughly $3 billion to add an online business to complement its store base, as trends shifted online. But as the two business lines diverged, PetSmart transferred part of its stake in Chewy in a move that set the groundwork for a potential IPO.

Following the initial public offering, PetSmart will own roughly 70% of the company's common stock and hold approximately 77% voting power. The two will continue to coordinate purchases, giving both stronger bargaining power, Chewy said in IPO registration documents.

It will use proceeds from the offering for working capital and general corporate purposes, according to the filing.

Some PetSmart investors likely hope that will include paying down debt. The company's credit metrics have weakened since acquiring Chewy, which added $2 billion in debt to its balance sheet, according to credit ratings agency Moody's. The firm estimates that as of February, PetSmart was leveraged at roughly 8.5 times enterprise value to earnings before interest, taxes, deprecation and amortization.

Chewy was founded in 2011 by Ryan Cohen and Michael Day. Cohen last year stepped down as CEO of the company, succeeded by Sumit Singh, Chewy's former chief operating officer, who held prior roles at Amazon Fresh and Dell.

It has distinguished itself from many of its competitors with customer service that includes 24/7 access and two-day shipping of online orders. It calls itself the "largest pure-play pet e-tailer in the United States, offering virtually everything a pet needs.

"[Chewy] benefits from the large market of 85 million households who love their pets," noted Kathleen Smith, principal at Renaissance Capital, which manages IPO-focused exchange-traded funds.

Chewy reported $3.5 billion in sales for fiscal 2018, up from $2.1 billion in 2017.

Since its sale to PetSmart, Chewy has expanded its private-label business and launched "Chewy Pharmacy," an online pet drugstore.

Chewy said in its prospectus it will seek continued growth by broadening the array of products it offers, finding new customers and expanding further into pharmacy.

It also warned the company has yet to turn a profit, despite strong sales growth.

From fiscal 2017 to 2018, it reported a net loss of $268 million, narrowing from a net loss of $338 million. The high costs required to ship heavy pet food have been a drag on the company's results. It has roughly 20% margins.

Chewy joins a long list of unprofitable companies that have recently debuted on the public markets, including Uber, Pinterest and SurveyMonkey. Last October, the percentage of unprofitable U.S. companies that went public reached 83%, topping numbers seen even in the dot-com bubble.

Those companies have no doubt been attracted to a relatively strong IPO market.

Year to date, there have been 65 IPOs in 2019, raising $26 billion, according to Renaissance Capital. Sixty percent of those IPOs are trading above their offer price.

Chewy plans to list Friday on the New York Stock Exchange under the ticker "CHWY."

—CNBC's Emma Newburger contributed to this report.

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