Dec 4, 2024, 9:42 AM
Dec 4, 2024, 9:42 AM

Chewy exceeds expectations and raises annual guidance

Highlights
  • Chewy Inc. reported a third-quarter adjusted EPS of $0.20, significantly up from $0.15 last year.
  • The company’s sales reached $2.88 billion, slightly below expectations but still showcasing growth in active customers and Autoship sales.
  • With raised guidance for fiscal year 2024, Chewy demonstrates strong financial momentum and an optimistic outlook for future performance.
Story

In the third quarter of fiscal year 2024, Chewy Inc., a leading pet supplies retailer, announced its financial performance exceeding analyst expectations. The results were officially revealed on a Wednesday, highlighting an upward trajectory in key financial metrics. Chewy's adjusted earnings per share (EPS) for the quarter reached $0.20, which marked a 33.3% increase compared to the previous year. This figure surpassed the consensus estimate that had projected an EPS of $0.08. Additionally, Chewy generated sales of $2.88 billion for the quarter, although this was slightly below the consensus of $2.90 billion and within the management's prior guidance of $2.84 billion to $2.86 billion. The company also reported significant growth in its Autoship subscription program, with sales hitting $2.30 billion, reflecting an increase of 8.7%. This shows Chewy's continued success in capturing and retaining customers through its subscription model, especially in an industry that has seen dynamic changes due to increased online shopping trends. Moreover, during the quarter, the net sales per active customer increased by 4.2%, reaching $567. These results can be attributed to Chewy's effective strategies focused on customer engagement and service improvements. Sumit Singh, the Chief Executive Officer of Chewy, emphasized the positive momentum the company has experienced since the second quarter, stating that the results not only exceeded expectations but also highlighted a sequential increase in active customers. This growth is crucial as it indicates a strengthening customer base and an expanding market presence. Alongside these achievements, Chewy also showed notable adjusted EBITDA margin expansion and robust free cash flow generation, which are essential indicators of financial health. Looking ahead, Chewy raised its sales guidance for the entirety of fiscal year 2024 to a range between $11.79 billion and $11.81 billion, projecting a year-over-year increase of around 6%. This adjustment in guidance surpassed its previous forecast of $11.6 billion to $11.8 billion and the consensus estimate of $11.878 billion. Chewy's outlook also included an adjustment to its EBITDA margin forecast, now expected to range between 4.6% and 4.8%, up from the earlier estimate of 4.5% to 4.7%. With these projections for the upcoming fourth quarter anticipated sales of between $3.18 billion and $3.20 billion, Chewy is well-positioned to leverage its achievements and further solidify its standing in the pet supplies market.

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