Group 1 - The article highlights concerns about a potential U.S. recession, with many consumer-facing companies reporting weaker spending and sentiment among consumers [1] - Consumers are increasingly opting for cheaper alternatives, reducing expenditures on large purchases and dining out less frequently [1] - The thrift mentality among consumers is becoming more pronounced, impacting various sectors [1] Group 2 - The author, Gary Alexander, has extensive experience in technology and has been a contributor to Seeking Alpha since 2017, providing insights into industry trends [1]

Financial Data and Key Metrics Changes - Q4 net sales increased approximately 15% year over year to $3,250,000,000, resulting in full year 2024 net sales of $11,860,000,000, representing 6% year over year growth [8][16] - Adjusted EBITDA margin for fiscal year 2024 reached 4.8%, reflecting year over year expansion of approximately 150 basis points [9][20] - Free cash flow for fiscal year 2024 was a record $452,500,000, converting approximately 80% of adjusted EBITDA into free cash flow [10][21] 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 [8][18] - The sponsored ads business reached approximately 1% of net sales for full year 2024, contributing significantly to gross margin improvement [10][44] - Chewy Vet Care Clinics opened eight locations in 2024, with plans to open eight to ten new clinics in fiscal year 2025 [11] Market Data and Key Metrics Changes - Active customers reached 20,500,000, marking the first year over year growth in eight quarters, with a 2.1% increase year over year [9][17] - Net sales per active customer (NESPAK) reached $578, representing a 4.1% year over year increase [18] - The overall pet industry is expected to continue normalizing, with Chewy anticipating to gain market share in 2025 [65][66] Company Strategy and Development Direction - The company aims to achieve a long-term adjusted EBITDA margin target of 10%, with expectations for further margin expansion in 2025 [13][26] - Chewy is focused on enhancing customer engagement through improved marketing strategies and app experiences, which are expected to drive active customer growth [32][58] - The company plans to leverage its first-party software for sponsored ads to enhance media content and expand its advertising capabilities [44][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver active customer growth in 2025, driven by strategic initiatives and improved marketing [9][34] - The management noted that the promotional environment remained stable, with minimal inflationary pressure expected in 2025 [70][71] - The company is optimistic about its growth prospects, expecting to continue gaining market share despite a normalizing pet industry [66][70] Other Important Information - The company repurchased approximately 32,800,000 shares in 2024, reducing BC Partners' ownership by approximately 16% [22][23] - Chewy ended the year with approximately $597,000,000 in cash and cash equivalents, remaining debt-free [24] Q&A Session Summary Question: Can you unpack what's driving the change in active customers? - 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 [30][34] Question: Can you help us understand the momentum on the gross margin side? - Management indicated that the fourth quarter gross margin was as expected, with EBITDA margin expansion driven by improvements in gross margin and operating efficiencies [35][36] Question: Can you talk about automation and the path to 70% to 80%? - Management confirmed that over 40% of volume is currently automated, with plans to ramp up automation in the Houston facility to achieve higher efficiency [41][42] Question: How do you see the landscape for net new customer growth versus reactivations? - Management highlighted that new investments, particularly in Chewy Vet Care Clinics, are driving new customer growth, while existing programs like Chewy Plus are stimulating reactivations [54][56] Question: What are you seeing from a promotional perspective in the pet landscape? - Management reported a stable promotional environment with a significant portion of the portfolio being price protected, leading to minimal inflationary pressure [68][70]

Core Insights - Chewy, Inc. reported strong fourth-quarter fiscal 2024 results, with both revenue and earnings exceeding expectations and showing year-over-year growth [1][2][3] Financial Performance - Adjusted earnings were 28 cents per share, surpassing the Zacks Consensus Estimate of 21 cents, marking a 55.6% increase from the previous year [2] - Net sales reached $3,247.4 million, exceeding the Zacks Consensus Estimate of $3,196 million, and reflecting a 14.9% increase from $2,825.9 million in the prior year [3] - Gross profit increased by 16% year over year to $926 million, with gross margin expanding by 30 basis points to 28.5% compared to 28.2% in the same quarter of fiscal 2023 [3] Expense Management - SG&A expenses rose 11.9% year over year to $700.7 million, but as a percentage of net sales, they decreased by 60 basis points to 21.6% [4] - Adjusted EBITDA was $124.5 million, up from $86.5 million in the year-ago quarter, with an adjusted EBITDA margin increase of 70 basis points to 3.8% [4] Financial Health - At the end of the quarter, Chewy had cash and cash equivalents of $595.8 million and total shareholders' equity of $261.5 million [5] - Net cash provided by operating activities was $207.5 million, with free cash flow reported at $156.6 million [5] Future Outlook - For Q1 fiscal 2025, management projects net sales between $3.06 billion and $3.09 billion, indicating 6-7% growth year over year, with adjusted earnings expected between 30 cents and 35 cents per share [6] - For fiscal 2025, Chewy anticipates net sales between $12.30 billion and $12.45 billion, also reflecting a 6-7% year-over-year increase, and expects an adjusted EBITDA margin of 5.4-5.7%, up from 4.8% in fiscal 2024 [6] Stock Performance - Chewy's stock has gained 12.2% over the past six months, outperforming the industry growth of 10.1% [7]

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 ...