Core Insights - Chewy reported $1.52 billion in revenue for the quarter ended April 2025, reflecting a year-over-year decline of 47.1% [1] - The EPS for the same period was $0.95, compared to $0.31 a year ago, indicating significant improvement [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.5 billion, resulting in a surprise of +1.29% [1] - The company delivered an EPS surprise of +14.46%, with the consensus EPS estimate being $0.83 [1] Financial Performance Metrics - Active Customers reached 20,756, surpassing the eight-analyst average estimate of 20,566 [4] - Net sales per active customer were $583, slightly below the $585.93 average estimate based on seven analysts [4] - Net Sales in Consumables amounted to $2.18 billion, exceeding the three-analyst average estimate of $2.16 billion [4] - Net Sales in Other categories were $595.90 million, compared to the $597.47 million average estimate based on three analysts [4] - Net Sales in Hardgoods reached $342.20 million, above the $323.18 million average estimate based on three analysts [4] Stock Performance - Chewy's shares have returned +16% over the past month, outperforming the Zacks S&P 500 composite's +6.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Chewy (CHWY) came out with quarterly earnings of $0.95 per share, beating the Zacks Consensus Estimate of $0.83 per share. This compares to earnings of $0.31 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 14.46%. A quarter ago, it was expected that this online pet store would post earnings of $0.21 per share when it actually produced earnings of $0.28, delivering a surprise of 33.33%.Over the last four quarters, the company h ...

Financial Data and Key Metrics Changes - Q1 net sales increased by over 8% to $3,120,000,000, exceeding the high end of guidance [9][20] - Gross margin for Q1 was 29.6%, with a year-over-year expansion of approximately 60 basis points when adjusted for one-time benefits from the previous year [10][21] - Adjusted EBITDA for Q1 was $192,700,000, representing a 6.2% adjusted EBITDA margin, with a year-over-year increase of approximately 50 basis points [11][24] - Free cash flow generated in Q1 was nearly $50,000,000 [12][24] Business Line Data and Key Metrics Changes - Autoship customer sales reached $2,560,000,000, representing approximately 82% of Q1 net sales and a growth of nearly 15% year-over-year [9][10] - Hardgoods category saw a 12.3% year-over-year growth [9] - Active customers increased to 20,800,000, reflecting a 3.8% year-over-year growth [10][20] Market Data and Key Metrics Changes - The overall pet industry is estimated to grow at 3% to 4% this year, with the company expecting to grow at roughly two times that rate [38] - The company is capturing approximately $0.50 of every dollar moving online in the pet market, indicating a gain in market share [78] Company Strategy and Development Direction - The company is focused on expanding its Chewy Vet Care (CVC) initiative, with plans to open 8 to 10 new clinics in fiscal year 2025 [12][13] - The transition of the Chewy Plus membership program out of beta is expected to drive stronger customer loyalty [14] - The company aims for a long-term adjusted EBITDA margin target of 10% [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on its strategic roadmap and long-term financial model [15][29] - The company anticipates that approximately 80% of adjusted EBITDA will convert into free cash flow for the full year [25][28] - Management noted that the competitive landscape remains favorable, with continued strength in customer acquisition and retention [32][52] Other Important Information - The CFO announced plans to leave the company for a CEO role in the semiconductor industry, with a smooth transition expected [17][30] - The company ended the quarter with approximately $616,000,000 in cash and cash equivalents and remains debt-free [27][26] Q&A Session Summary Question: Customer growth expectations for the full year - Management indicated that low single-digit growth remains a reasonable framework for customer count growth, with current momentum exceeding expectations [32][34] Question: Industry growth outlook - Management estimates a 3% to 4% growth for the industry, with Chewy's guidance reflecting a share-gaining plan [38] Question: Advertising investments and opportunities - Management expressed optimism about the sponsored ads business, highlighting successful platform migration and increased demand for off-site advertising [42][45] Question: Sustainability of active customer growth - Management noted improvements in customer retention and acquisition strategies, contributing to sustainable active customer growth [50][52] Question: Autoship customer sales growth - Management detailed the path new customers take to become Autoship customers, emphasizing the importance of assortment and personalized experiences [66][68] Question: Gross margin changes - Management clarified that gross margin expanded year-over-year, driven by sponsored ads and product mix improvements [84][86] Question: Chewy Vet Care expansion opportunities - Management highlighted the potential of the CVC initiative, with strong performance metrics and plans for gradual expansion [94][96]

Chewy (CHWY) Q1 2026 Earnings Call June 11, 2025 08:00 AM ET Speaker0 Good morning, everyone, and a warm welcome to Chewy's First Quarter twenty twenty five Earnings Call. My name is Emily, and I'll be coordinating your call today. After the presentation, you'll have the opportunity to ask any questions. I will now hand over to our host, Natalie Nowak, Director of Investor Relations to begin. Natalie, please go ahead. Speaker1 Thank you for joining us on the call today to discuss our first quarter results f ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Q1 2025 Financial Results June 11, 2025 1 Forward-Looking Statements This communication contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this communication, including statements regarding our share repurchase program, our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking stat ...

Financial Performance - Net sales for the 13 weeks ended May 4, 2025, were $3,116.0 million, an increase of 8.3% compared to $2,877.7 million for the same period in 2024[90]. - Net income decreased to $62.4 million, down 6.7% from $66.9 million in the prior year, resulting in a net margin of 2.0%[90]. - Adjusted EBITDA rose to $192.7 million, reflecting an 18.3% increase from $162.9 million in the previous year, with an adjusted EBITDA margin of 6.2%[90]. - Adjusted net income for the quarter was $148.9 million, an 8.6% increase from $137.1 million in the prior year[99]. - Adjusted basic earnings per share increased by 12.5% to $0.36, while adjusted diluted earnings per share rose by 12.9% to $0.35[99]. Customer Metrics - Active customers increased by 3.8% to 20.756 million, compared to 19.988 million in the prior year[90]. - Net sales per active customer grew by 3.7% to $583, up from $562 in the same period last year[90]. - Autoship customer sales reached $2,562.7 million, a 14.8% increase from $2,232.9 million, representing 82.2% of net sales[90]. - Active customers increased by 3.8% to 20.8 million, contributing to net sales growth of 8.3%, reaching $3.1 billion compared to $2.9 billion in the prior year[119]. - Net sales per active customer rose by $21 to $583, driven by growth in healthcare, specialty, and hardgoods businesses[119]. Expenses and Costs - Cost of goods sold increased by 8.3% to $2.2 billion, consistent with the increase in net sales, reflecting higher product and shipping supply costs[120]. - Gross profit for the period was $923.8 million, an increase of 8.2%, with a gross margin of 29.6%, slightly down from 29.7% in the previous year[121]. - Selling, general and administrative expenses rose by 8.4% to $653.1 million, primarily due to expansion costs in fulfillment operations and pharmacy networks[122]. - Advertising and marketing expenses increased by 3.7% to $193.8 million, with expectations for these expenses to be approximately 6.7 to 6.8 percent of net sales for the fiscal year[124]. Cash Flow and Investments - Free cash flow decreased to $48.7 million, down 7.4% from $52.6 million in the previous year[90]. - Free cash flow for the thirteen weeks ended May 4, 2025, was $48.7 million, a decrease from $52.6 million for the same period in 2024, with net cash provided by operating activities at $86.4 million[104]. - Net cash provided by operating activities for the thirteen weeks ended May 4, 2025, was $86.4 million, an increase from $81.9 million for the same period in 2024[129][130]. - Net cash used in investing activities was $41.2 million for the thirteen weeks ended May 4, 2025, primarily for capital expenditures of $37.7 million related to expanding operations[132]. - Net cash used in financing activities was $25.0 million for the thirteen weeks ended May 4, 2025, mainly for repurchases of common stock totaling $23.1 million[134]. Financial Position - Cash and cash equivalents totaled $616.4 million as of May 4, 2025, reflecting an increase of $20.6 million from February 2, 2025[127]. - The company has a senior secured asset-based credit facility with a borrowing capacity of $782.8 million as of May 4, 2025, with no outstanding borrowings[136]. - The Board of Directors authorized a share repurchase program of up to $500 million, with $383.5 million remaining available for repurchase as of May 4, 2025[137][138]. - The ABL Credit Facility matures on April 1, 2030, and allows for incremental commitments of up to $250 million[136]. Operational Adjustments - The company continues to adapt its logistics and supply chain processes in response to evolving macroeconomic conditions, including inflation and high interest rates[86]. - The company is modernizing its finance information technology architecture to enhance scalability and analytical capabilities, expected to conclude by the end of the 2025 fiscal year[123]. - Non-cash adjustments in operating activities included share-based compensation expense of $74.5 million and depreciation and amortization expense of $30.0 million for the thirteen weeks ended May 4, 2025[130]. - Working capital changes for the thirteen weeks ended May 4, 2025, resulted in a cash decrease of $88.8 million, primarily due to a decrease in accrued expenses and an increase in accounts receivable[130]. Previous Year Comparison - The company reported a net income of $62.4 million for the thirteen weeks ended May 4, 2025, compared to $66.9 million for the same period in 2024[130][131]. - Interest income decreased by $11.3 million to $3.2 million, attributed to lower income from marketable securities[125]. - The company experienced a significant cash inflow of $505.7 million from investing activities for the thirteen weeks ended April 28, 2024, primarily from the maturities of marketable securities[133].

Financial Performance - Net sales for Q1 2025 reached $3.12 billion, an increase of 8.3% year-over-year[7] - Gross margin was 29.6%, a decrease of 10 basis points year-over-year[7] - Net income amounted to $62.4 million, with a net margin of 2.0%, down 30 basis points year-over-year[7] - Adjusted EBITDA was $192.7 million, reflecting an increase of $29.8 million year-over-year, with an adjusted EBITDA margin of 6.2%, up 50 basis points[7] - Net sales for the 13 weeks ended May 4, 2025, were $3,116.0 million, an increase of 8.3% compared to $2,877.7 million for the same period in 2024[18] - Net income decreased to $62.4 million, down 6.7% from $66.9 million year-over-year[18] - Adjusted EBITDA rose to $192.7 million, reflecting an 18.3% increase from $162.9 million in the prior year[18] - Adjusted net income increased to $148.9 million, an 8.6% rise from $137.1 million year-over-year[27] Customer Metrics - Active customer growth was reported, contributing to the overall sales momentum[4] - Active customers increased by 3.8% to 20.756 million, up from 19.988 million in the previous year[18] - Autoship customer sales reached $2,562.7 million, a 14.8% increase compared to $2,232.9 million in the previous year[18] Cash Flow and Liquidity - Cash and cash equivalents increased to $616.4 million from $595.8 million as of February 2, 2025[12] - Cash and cash equivalents at the end of the period were $616.4 million, down from $1,134.6 million at the end of the same period last year[16] - Free cash flow for the period was $48.7 million, a decrease of 7.4% from $52.6 million in the same quarter last year[18] - Free cash flow for the 13 weeks ended May 4, 2025, was $48.7 million, down from $52.6 million for the same period in 2024, reflecting a decrease of approximately 7.4%[31] - Net cash provided by operating activities was $86.4 million, representing a 5.5% increase from $81.9 million in the prior year[18] - Net cash provided by operating activities increased to $86.4 million for the 13 weeks ended May 4, 2025, compared to $81.9 million for the same period in 2024, representing an increase of about 5.5%[31] Assets and Liabilities - Total assets rose to $3,060.3 million, compared to $3,014.5 million as of February 2, 2025[12] - Total liabilities decreased slightly to $2,684.7 million from $2,753.0 million[12] Strategic Initiatives - The company aims to continue expanding its market share in the pet category, leveraging its value proposition[4] - The company plans to introduce new products and services while expanding into new jurisdictions[9] - The company is investing in new fulfillment centers, pharmacy facilities, veterinary clinics, and customer service infrastructure, which may affect future cash flow[31] - Capital expenditures for the 13 weeks ended May 4, 2025, were $37.7 million, up from $29.3 million in the same period in 2024, indicating an increase of approximately 28.5%[31] - The company anticipates that free cash flow may be impacted by the timing of capital investments, fluctuations in growth, and changes in working capital[31]

Core Viewpoint - Chewy, Inc. is positioned for growth in its topline and margin expansion due to its extensive range of over 130,000 pet products and services offered on its online platform [1] Company Overview - Chewy, Inc. operates as an online platform specializing in pet products, supplies, and prescriptions [1] - The company offers a diverse selection of more than 130,000 products and services [1] Growth Potential - The anticipated growth in Chewy's topline is driven by the expanding market for pet products and services [1] - Margin expansion is also expected as the company continues to leverage its extensive product offerings [1]

Core Insights - Chewy Inc. is set to release its first-quarter fiscal 2025 earnings results on June 11, with investors contemplating whether to buy or hold the stock [1] Group 1: Company Performance and Expectations - Chewy has established a strong presence in the online pet retail market, focusing on innovation and customer loyalty, which positions the company for long-term growth [2] - The Zacks Consensus Estimate for first-quarter revenues is $3.08 billion, reflecting a 6.9% increase from the previous year, while the earnings estimate remains at 34 cents per share, indicating a 9.7% year-over-year rise [3][8] - Chewy has a trailing four-quarter earnings surprise of 19.3%, with the last quarter surpassing the Zacks Consensus Estimate by 33.3% [4] Group 2: Key Growth Drivers - The growth in Chewy's revenue is supported by its Autoship program, which encourages repeat purchases and stabilizes revenue streams [10] - Active customer growth is a positive indicator, with the Zacks Consensus Estimate suggesting an increase to 20.5 million active customers, driven by improved digital experiences and the Chewy+ Membership Program [11] - Chewy's expansion into higher-margin areas, such as its in-house ad platform and veterinary services, is enhancing customer acquisition and engagement [12] Group 3: Market Position and Valuation - Chewy's stock has increased by 22.1% over the past month, outperforming the industry average of 1.2% [13] - The company trades at a forward 12-month price-to-sales (P/S) ratio of 1.57, which is lower than the industry average of 2.00, indicating a favorable investment opportunity [16] - Chewy's valuation is higher than competitors like Central Garden & Pet Company, Petco Health and Wellness Company, and BARK, which have lower P/S ratios [17] Group 4: Investment Considerations - Chewy's investments in automation, advertising, and veterinary services reflect a commitment to long-term growth, although the lack of a clear earnings beat signal may lead to cautious investment decisions [19]