Strong Sales Growth and Strategic Investments

• Net Sales: Increased by approximately 5% to $2.88 billion.

• Autoship Customer Sales: Reached $2.3 billion, representing 80% of Q3 net sales and a year-over-year increase of approximately 9%.

• Active Customers: Ended the quarter with approximately 20.2 million, up 160,000 sequentially.

• Adjusted EBITDA: $138 million, representing a 4.8% margin and approximately 180 basis points of margin expansion year-over-year.

• Gross Margin: 29.3%, representing 80 basis points of margin expansion year over year.

• SG&A Expenses: $546 million, or 19% of net sales, representing 90 basis points of improvement year-over-year.

• Advertising and Marketing Expense: $191.8 million, or 6.7% of net sales.

• Adjusted Net Income: $84.9 million, representing a 34% increase year over year.

• Net Income: $3.9 million, translating into $0.01 earnings per share.

• Free Cash Flow: $151.8 million, with $183.5 million of net cash provided by operating activities and $31.7 million of capital expenditures.

• Share Repurchase: Repurchased approximately 10.2 million shares for $300 million and an additional 1.6 million shares for $42.4 million.

• Cash and Equivalents: Approximately $508 million, with an overall liquidity position of approximately $1.3 billion.

• Q4 Net Sales Guidance: Between $3.18 billion and $3.20 billion, approximately 13% year-over-year growth.

• Full-Year 2024 Net Sales Outlook: Between $11.79 billion and $11.81 billion, approximately 6% year-over-year growth.

• Full-Year 2024 Adjusted EBITDA Margin Guidance: Raised to a range of 4.6% to 4.8%.

Release Date: December 04, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• Chewy Inc (NYSE:CHWY) reported a 5% increase in Q3 net sales to $2.88 billion, exceeding the high end of their guidance range.

• The autoship program continues to drive customer loyalty, with autoship customer sales reaching $2.3 billion, representing 80% of Q3 net sales and a 9% year-over-year increase.

• Chewy Inc (NYSE:CHWY) achieved a sequential increase in active customers, ending the quarter with approximately 20.2 million active customers, up 160,000 sequentially.

• The company reported $138 million of adjusted EBITDA in Q3, representing a 4.8% margin and approximately 180 basis points of margin expansion year-over-year.

• Chewy Inc (NYSE:CHWY) continues to generate robust free cash flow, reporting $151.8 million in Q3, demonstrating their ability to invest in growth initiatives and return capital to shareholders.

• Despite growth, the Canadian business remains relatively small and immaterial to the overall scale of Chewy Inc (NYSE:CHWY).

• The company anticipates a sequential decline in Q4 adjusted EBITDA margin due to typical seasonality and the timing of certain investments.

• Chewy Inc (NYSE:CHWY) expects advertising and marketing expenses to be at the high end of their 6% to 7% of net sales range for the full year, indicating increased spending.

• The company is still in the early stages of its Chewy Plus membership program, with contribution to the overall enterprise remaining immaterial.

• Chewy Inc (NYSE:CHWY) faces challenges in fully benefiting from improvements in hard goods performance until there is a more fulsome recovery in discretionary purchasing.

Story Continues