Chewy
The company is also looking to launch its own private-label brands for pet wellness products and insurance. Both of these have the potential to put upward pressure on margins. So far in 2022, Chewy's shares are down 31% YTD and off by nearly 70% from it's all-time high in early 2021. The stock is up by 81% from its 2022 low in May.
Inside the Numbers
In Q3, Chewy reported earnings of $0.01 per share which was better than analysts' expectations of an $0.08 per share loss. Revenue came in at $2.5 billion which was better than expectations of $2.4 billion. In total, EPS went from a loss of $0.08 per share last year to a $32 million profit this year. Revenue was up 15%.
For the quarter, the company had 20.5 million active customers which were in line with expectations and a slight increase from the previous year. However, net sales per customer increased by 14% due to a combination of higher prices and larger orders. The average sales per active customer came in at $477 while analysts were expecting $416.
In its commentary on the conference call, Chewy acknowledged that supply chain disruptions and inflation in product costs were improving but still adversely affected its results. The company said it was feeling a positive tailwind from lower shipping costs, continued pricing power, and efficiencies from investments in logistics in previous quarters.
The company said that demand was particularly strong for non-discretionary categories like food, treats, and healthcare products. However, it noted some weaknesses in more discretionary categories like carriers and dog beds.
The company also raised its full-year guidance from $9.9 billion to $10.03 billion. It anticipates EBITDA profit margins of 2.4% which is better than its previous outlook of 2%. Next quarter, it also increased its revenue forecast to $2.64 billion from $2.58 billion.
