Chewy(CHWY)2025-06-11 11:28Financial 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].