Company Overview - Chewy is an online retailer providing a wide range of pet products, including food, toys, prescription medicine, and insurance plans [3] - The company has achieved profitability and strong earnings growth, supported by a loyal customer base [3] Market Resilience - Chewy is expected to maintain revenue growth even in challenging economic conditions due to its focus on essential pet products, which are less sensitive to economic fluctuations compared to discretionary items [4] - The American Pet Products Association reported that pet spending in the U.S. reached nearly $152 billion last year and is projected to increase to $157 billion this year [4] Customer Engagement - Chewy's Autoship service, which automatically reorders products for customers, has been a significant driver of revenue, accounting for over 80% of total sales in the recent quarter [5] - Autoship customer sales grew by 21% year-over-year in the recent quarter and 11% for the full year [5] Expansion into New Markets - Chewy is entering the veterinary care market, valued at $25 billion, having opened eight veterinary clinics to date, which has enhanced customer engagement and attracted new customers [6] Growth Indicators - The company reported its first year-over-year growth in active customers in eight quarters, with strong performance in the last two quarters [7] - Chewy's adjusted EBITDA margin reached 4.8%, with 80% of adjusted EBITDA converted into free cash flow, totaling over $452 million [8] Valuation and Future Outlook - Chewy's stock is currently trading at 25 times forward earnings estimates, following a 10% decline over the past month, presenting a potential buying opportunity [10] - The company is expected to stand out in the growth stock sector as it continues to demonstrate profitability and customer growth, with predictions of significant stock performance in 2025 [11]

分组1: Dollar Tree and Family Dollar - Dollar Tree is selling the Family Dollar chain for $1 billion, a significant drop from the $9 billion acquisition price in 2015 [3] - The sale may allow Dollar Tree to pay down debt and potentially improve its business performance [4] - Despite the economic environment favoring discount retailers, Dollar Tree reported a loss in 2023 and has negative net income for the trailing 12 months [6][9] 分组2: Chewy's Performance - Chewy added over 430,000 active net customers in the past year, with overall sales up about 15% and Autoship sales increasing by more than 21% [12][13] - Autoship now accounts for 80.6% of all sales, indicating deeper customer relationships [13] - Chewy's expansion into vet care clinics is seen as a potential catalyst for future growth [16][19] 分组3: Sezzle's Business Model - Sezzle operates as a buy now, pay later service, allowing customers to make purchases upfront and pay in four interest-free installments [22][23] - The company targets mid to low-income younger customers who prefer budgeting over credit card use [23] - Sezzle has introduced subscription models that allow customers to shop at a wider range of merchants, enhancing its appeal [28][34]

Core Viewpoint - Chewy's stock price is currently low, presenting a potential buying opportunity as signs of growth and traction increase despite mixed reactions to recent financial results and guidance [1][2] Financial Performance - Chewy's FQ4 2024 results showed nearly 15% revenue growth, exceeding MarketBeat's consensus by 150 basis points, driven by increased marketing efforts [2] - The company reported a 2.1% increase in active customers and a 4.1% increase in sales per customer, with autoship revenue growing by 21.2%, contributing to 80.6% of quarterly sales [3] - Free cash flow increased by 133%, indicating strong financial health and potential for debt reduction or dividends [5] Guidance and Forecast - For 2025, Chewy forecasts organic revenue growth near 7%, with adjusted EBITDA margin expected to widen by nearly 200 basis points [6] - The 12-month stock price forecast is set at $38.68, indicating an 18.39% upside potential based on 23 analyst ratings [4] Analyst Sentiment - Analyst sentiment is bullish, with a consensus rating of Moderate Buy and a rising price target, reflecting improved coverage and sentiment among analysts [7] - The price action post-results showed mixed reactions, but support levels indicate potential for a breakout to new highs [8]

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]

Chewy (CHWY) Q4 2025 Earnings Call March 26, 2025 02:57 PM ET Company Participants David Reeder - Chief Financial OfficerSumit Singh - CEOEric Sheridan - Managing DirectorSteven Zaccone - Director, Equity Research, Hardlines Retail Conference Call Participants David Bellinger - Director & Senior AnalystDouglas Anmuth - Managing Director & Internet AnalystCurtis Nagle - Director - Senior US SMID Cap Internet AnalystTrevor Young - AnalystDylan Carden - Research Analyst Operator Hello, everyone, and welcome to ...

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 ...