Chewy's Q1 Earnings Beat Estimates, Active Customer Sales Increase Y/Y

Core Insights - Chewy, Inc. (CHWY) reported strong first-quarter fiscal 2025 results, with both revenue and earnings exceeding expectations and showing year-over-year growth [1][3][11] Financial Performance - Adjusted earnings were 35 cents per share, beating the Zacks Consensus Estimate of 34 cents, and reflecting a 12.9% increase from the previous year [3] - Net sales reached $3,116 million, surpassing the Zacks Consensus Estimate of $3,076 million, marking an 8.3% increase from $2,877.7 million in the prior year [3][11] - Gross profit increased by 8.2% year over year to $923.8 million, while gross margin slightly decreased to 29.6% [7] - Adjusted EBITDA was $192.7 million, an 18.3% increase from $162.9 million in the same quarter last year, with an adjusted EBITDA margin of 6.2% [9] Sales Breakdown - Hardgoods sales grew 12.3% year over year to $342.2 million, driven by improved inventory management and the addition of over 150 new brands [4][11] - Consumable sales increased by 6.4% year over year to $2.18 billion [4] - Autoship sales rose 14.8% to $2.56 billion, representing a record 82.2% of total net sales [5][11] Customer Metrics - The company ended the quarter with 20.8 million active customers, a 3.8% increase year over year [5] - Net sales per active customer reached $583, reflecting a 3.7% year-over-year increase [6] Cost and Expense Management - SG&A expenses rose 8.4% year over year to $653.1 million, accounting for 21% of net sales [8] - Advertising and marketing expenses totaled $193.8 million, up 3.7% year over year [8] Future Outlook - For Q2 fiscal 2025, Chewy expects net sales between $3.06 billion and $3.09 billion, with adjusted earnings per share projected between 30 cents and 35 cents [14] - For the full fiscal 2025, net sales are expected to be between $12.3 billion and $12.5 billion, representing approximately 6% to 7% year-over-year growth [15] - The company anticipates converting around 80% of adjusted EBITDA into free cash flow, translating to approximately $550 million [16]