Economic Overview - Market participants are maintaining flat trading levels due to uncertainty surrounding the new U.S. tariff policy implemented on April 2nd [1][2] - Monthly economic data may not reflect true economic conditions due to the impact of tariffs, making it difficult to prepare for future developments [2] Durable Goods Orders - Durable Goods Orders for February exceeded expectations, with a headline increase of +0.9%, compared to the anticipated -1.0%, following a revised +3.3% from the previous month [3] - Excluding transportation orders, the metric improved to +0.7% from +0.1% the prior month [3] - The only underperforming segment was non-Defense, ex-aircraft, which saw a decline of -0.3%, contrasting with the expected +0.2% [4] Company Earnings Reports - Dollar Tree (DLTR) reported mixed Q4 results, with earnings of $2.29 per share exceeding expectations by 11 cents, but revenues fell short by -39% to $5.0 billion [6] - Dollar Tree announced the sale of its Family Dollar merger for $1 billion, resulting in a +2% increase in shares [6] - Chewy (CHWY) outperformed estimates in its Q4 report, with earnings of 28 cents per share beating consensus by 7 cents and revenues of $3.25 billion surpassing expectations of $3.20 billion, reflecting a +15% year-over-year sales growth [7]

Financial Data and Key Metrics Changes - Q4 net sales increased approximately 15% year-over-year to $3.25 billion, resulting in full year 2024 net sales of $11.86 billion, representing 6% year-over-year growth [10][21] - Adjusted EBITDA margin for fiscal year 2024 reached 4.8%, reflecting year-over-year expansion of approximately 150 basis points [13][28] - Free cash flow for fiscal year 2024 was a record $452.5 million, converting approximately 80% of adjusted EBITDA into free cash flow [14][29] Business Line Data and Key Metrics Changes - Autoship customer sales increased by 21% in Q4 and nearly 11% for the full year 2024, representing 80.6% of Q4 net sales [11][23] - Active customers reached 20.5 million, marking the first year-over-year growth in eight quarters, with a 2.1% increase year-over-year [12][22] - Sponsored ads business scaled to approximately 1% of net sales for full year 2024, contributing significantly to gross margin improvement [15][25] Market Data and Key Metrics Changes - The company reported that the overall pet industry is expected to grow at roughly 3.5% to 4.5%, while the company anticipates net sales growth of 6% to 7% in 2025 [129] - Pet adoption trends remain stable, with net adoptions still up relative to shelters and rescue communities [88][89] Company Strategy and Development Direction - The company plans to open eight to ten new vet care clinics in fiscal year 2025, expanding its presence in the $25 billion vet services market [17] - The company aims to reach a long-term adjusted EBITDA margin target of 10% and expects to expand adjusted EBITDA margin in 2025 [19] - The focus on enhancing customer experience through app improvements and marketing strategies is expected to drive future growth [42][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver share-gaining growth and margin expansion in 2025, despite a normalizing pet industry [33][130] - The promotional environment in Q4 was managed effectively, with minimal inflationary pressure expected in 2025 [90][92] Other Important Information - The company repurchased approximately 32.8 million shares in 2024, reducing the ownership position of its largest shareholder [31][32] - The company ended the year with approximately $597 million in cash and remains debt-free, with a liquidity position of approximately $1.4 billion [32] Q&A Session Summary Question: What drove the significant increase in active customers from Q3 to Q4? - Management noted that the momentum from Q3 continued into Q4, resulting in year-over-year active customer growth for the first time in eight quarters, driven by improved marketing strategies and customer engagement [41][42] Question: Can you explain the gross margin performance in Q4? - Management indicated that the gross margin expansion was in line with expectations, driven by improvements in sponsored ads and product mix, with a projection for continued growth in 2025 [48][51] Question: What is the current status of automation in fulfillment? - The company reported that over 40% of volume is currently processed through automated facilities, with plans to increase this to 70-80% in the near to medium term [58][62] Question: How do you view the growth investments for 2025? - Management highlighted that investments in vet care clinics and improved app performance are expected to drive new customer growth and reactivations [75][80] Question: What are the expectations for marketing expenses in 2025? - The company anticipates marketing expenses to remain in the range of 6% to 7% of revenue, consistent with historical levels [100][102] Question: How did hard goods perform compared to consumables in Q4? - Management noted that hard goods outperformed due to improved site experiences and increased customer traffic, with broad-based growth across various categories [104][109]

Core Insights - Chewy reported $3.25 billion in revenue for the quarter ended January 2025, a year-over-year increase of 14.9% [1] - The EPS for the same period was $0.28, compared to $0.18 a year ago, indicating a significant improvement [1] - The revenue exceeded the Zacks Consensus Estimate of $3.2 billion, resulting in a surprise of +1.60% [1] - The company delivered an EPS surprise of +33.33%, with the consensus EPS estimate being $0.21 [1] Key Metrics - Active Customers reached 20,514, surpassing the average estimate of 20,266 by seven analysts [4] - Net sales per active customer were $578, slightly below the average estimate of $582.72 based on six analysts [4] - Net Sales from Consumables were $2.29 billion, exceeding the average estimate of $2.24 billion based on three analysts [4] - Net Sales from Other categories were $592.26 million, compared to the average estimate of $600.84 million based on three analysts [4] - Net Sales from Hardgoods were $365.29 million, surpassing the average estimate of $353.15 million from three analysts [4] Stock Performance - Chewy's shares returned -2.7% over the past month, compared to the Zacks S&P 500 composite's -2.9% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]

Chewy Inc. CHWY on Wednesday reported a fourth-quarter adjusted EPS of 28 cents, up 55.6% year-over-year, compared to the consensus of $0.05.The retailer of pet supplies reported sales of $3.25 billion. That’s up 14.9% year over year, compared to the consensus of $3.2 billion and the management guidance of $3.18 billion-$3.2 billion.Autoship customer sales reached $2.62 billion, up 21.2%. Autoship customers are shoppers in a given fiscal quarter for whom an order has shipped through the Autoship subscriptio ...

Here's our initial take on Chewy's (CHWY 2.77%) fiscal 2024 fourth-quarter financial report.Key MetricsMetricQ4 2023Q4 2024Changevs. ExpectationsRevenue$2.8 billion$3.3 billion17%BeatEarnings per share$0.18$0.2856%BeatActive customers20.1 million20.5 million2%n/aNet sales per active customer (TTM)$555$5784%n/aChewy Returns to GrowthChewy posted earnings and revenue numbers for the quarter that topped Wall Street expectations. Perhaps as importantly, the online pet supply retailer provided clear evidence tha ...

Chewy (CHWY) came out with quarterly earnings of $0.28 per share, beating the Zacks Consensus Estimate of $0.21 per share. This compares to earnings of $0.18 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 33.33%. A quarter ago, it was expected that this online pet store would post earnings of $0.23 per share when it actually produced earnings of $0.20, delivering a surprise of -13.04%.Over the last four quarters, the company ...

Chewy reports impressive revenue growth but faces challenges in customer expansion.Online pet products retailer Chewy (CHWY -1.41%) reported fiscal 2024 fourth-quarter earnings on Wednesday, March 26, that topped analysts' consensus expectations. Revenue for the quarter surged 14.9% year over year to $3.25 billion, outperforming forecasts of $3.2 billion. Adjusted earnings per share rose to $0.28 from $0.18 a year ago. However, net income fell nearly 29% to $22.8 million, as projected costs pressured margin ...

Growth and Market Challenges - Recent growth rates may not be sustainable, and the company may face challenges in managing future growth[51]. - The company has experienced significant growth, but net sales growth may decline if customer acquisition and retention are not effectively managed[57]. - The ability to accurately forecast net sales and plan expenses is critical for future growth[48]. - The company must attract new customers and retain existing ones to maintain profitability, which may require significant marketing investments[57]. - Competition in the pet products and services market, especially from online retailers, poses ongoing threats to the company's success[49]. - The company may seek growth through acquisitions or investments, but failure to manage these effectively could have adverse effects[49]. - The introduction of new products and services is essential for growth, but involves considerable costs and risks; failure to meet consumer demands could lead to declining sales and profitability[63]. - The company faces challenges in managing relationships with a growing number of suppliers and customers, which may affect its operational capabilities[62]. - The company may struggle to accurately estimate the size of its addressable markets, which could limit future growth potential[69]. - New product offerings may face competitive challenges, requiring significant investment in brand awareness to succeed in new markets[136]. Operational Risks - Business disruptions from natural disasters or public health crises could adversely affect operations and financial performance[53][55]. - The company relies on an efficient supply chain, and any disruptions in fulfillment centers could significantly impact sales and operations[56]. - Disruptions in shipping arrangements could negatively impact customer satisfaction and financial results, as reliance on third-party logistics providers poses risks[76]. - The company must optimize its fulfillment centers to avoid excess capacity or delays in order fulfillment, which could harm customer relationships and financial performance[77]. - The company is considering significant investments in upgrading existing technologies and implementing new technologies, including artificial intelligence (AI)[84]. - The company relies heavily on third-party data centers and cloud service providers, making it vulnerable to service interruptions that could affect operations and customer access[92]. - The satisfactory performance of the company's websites and mobile applications is critical for customer acquisition and retention, with potential disruptions harming brand perception[94]. - The company has experienced telecommunications issues that could disrupt customer support and online payment processing[91]. - The company is subject to risks from third-party SaaS technologies, which are essential for critical business functions[97]. Financial and Compliance Risks - Increased operating expenses may lead to operating losses as the company continues to expand its business[48]. - Operating expenses are expected to increase due to higher advertising, marketing, and personnel costs, which may lead to operating losses[67]. - Forecasting net sales and planning expenses is challenging; inaccuracies could lead to overspending on customer acquisition or lower-than-expected sales[68]. - The company is subject to extensive regulations, and non-compliance could result in significant liabilities, recalls, and adverse operational impacts[107]. - The FDA's scrutiny of pet food labeling could lead to additional regulatory requirements, impacting product marketing and sales[108]. - Compliance with evolving privacy and data protection laws is critical, as failures could result in reputational damage and financial penalties[116]. - The company may face additional regulations and compliance requirements as it integrates new payment options, which could increase exposure to fraud and operational risks[86]. - The company is subject to the internal control and financial reporting requirements of the Sarbanes-Oxley Act, which mandates effective internal controls to prevent fraud and ensure accurate financial reporting[180]. - Significant resources and management attention are required to comply with public company reporting requirements, leading to increased legal and financial compliance costs[181]. Supply Chain and Trade Risks - A significant portion of the company's suppliers for private brand products are located in China, and disruptions in these relationships could materially affect operations and financial condition[103]. - Ongoing international conflicts may disrupt global markets and impact the company's supply chain and partners, affecting long-term operational performance[104]. - Changes in U.S. trade policies, including potential tariffs on imports from various countries, could necessitate amendments to supply chain strategies and increase costs[105]. - Additional trade restrictions could increase product costs or reduce supply availability, harming the company's financial condition[106]. Economic and Market Conditions - Economic uncertainties, such as inflation and rising interest rates, could adversely impact the pet market and the company's financial results[131]. - Changes in consumer spending patterns during economic downturns may lead to declines in sales and profitability[132]. - The company's stock price has been volatile, influenced by various factors including revenue fluctuations and market conditions, which may continue to impact investor sentiment[157]. Legal and Governance Issues - The company may face risks related to potential conflicts of interest with its controlling stockholders, which could affect its strategic decisions and operations[155]. - The dual class structure of the common stock limits the voting power of publicly held shares, affecting attractiveness to investors and market price[159]. - The company is considered a "controlled company" under NYSE rules, allowing it to rely on exemptions from certain corporate governance requirements[167]. - The company is subject to increased legal and accounting compliance costs, which may arise from acquisitions or investments, potentially affecting its overall financial performance[139]. Product and Liability Risks - The company faces risks related to product safety and quality, which could lead to recalls and loss of consumer confidence, potentially impacting financial results[102]. - The company is exposed to risks from personal injury and product liability claims, which could lead to increased costs and damage to reputation[126]. - Resistance from veterinarians to authorize prescriptions could decrease sales and adversely affect the company's financial condition[115]. Technology and Cybersecurity Risks - Cybersecurity incidents could lead to unauthorized access to sensitive information, resulting in significant legal and financial exposure[99]. - The company maintains privacy and cybersecurity insurance, but there is uncertainty regarding the adequacy of coverage for potential liabilities[101]. - The company may incur significant costs to enhance network infrastructure if customer traffic exceeds current capacity[90].

U.S. stock futures were lower this morning, with the Dow futures falling around 50 points on Wednesday.Shares of Chewy, Inc. CHWY fell sharply in pre-market trading after the company reported quarterly earnings.Chewy reported quarterly earnings of 28 cents per share which beat the analyst consensus estimate of 5 cents per share. The company reported quarterly sales of $3.25 billion which beat the analyst consensus estimate of $3.20 billion, according to data from Benzinga Pro.Chewy shares declined 3.5% to $ ...

Chewy Announces Fiscal Fourth Quarter and Full Year 2024 Financial Results PLANTATION, Fla., March 26, 2025 (BUSINESS WIRE) — Chewy, Inc. (NYSE: CHWY) ("Chewy"), a trusted destination for pet parents and partners everywhere, has released its financial results for the fiscal fourth quarter and full year 2024 ended February 2, 2025. Fiscal Q4 2024 Results : (1) Fiscal 2024 Results : (1) "Topline growth and profitability exceeded the high-end of our guidance ranges for both the fourth quarter and full year 202 ...