Chewy, Inc. Sees 14.9% Sales Growth, Hits $3.25 Billion in Q4 2024

Chewy, Inc. (NYSE: CHWY) announced its financial results for the fiscal fourth quarter and full year ending February 2, 2025. The company reported net sales of $3.25 billion for the quarter, marking a 14.9% increase compared to the same period last year. This growth was accompanied by a gross margin of 28.5%, which expanded by 30 basis points year-over-year.

However, the net margin decreased by 40 basis points to 0.7%. Despite the decline in net margin, Chewy’s net income stood at $22.8 million, which included share-based compensation expenses and related taxes amounting to $99.7 million. The company’s adjusted EBITDA showed a notable increase, reaching $124.5 million, up by $38.1 million from the previous year. This improvement in adjusted EBITDA was reflected in the adjusted EBITDA margin, which expanded by 70 basis points to 3.8%.

In terms of earnings per share (EPS), Chewy reported basic EPS of $0.06 and diluted EPS of $0.05. Both figures represented a decrease compared to the previous year. However, on an adjusted basis, basic EPS was $0.29, and diluted EPS was $0.28, both showing an increase of $0.10 year-over-year.

Chewy Reports Fiscal Fourth Quarter with Double Beat

When comparing Chewy’s performance against market expectations, the company exceeded forecasts. Analysts had anticipated earnings per share to be $0.03, but Chewy delivered a basic EPS of $0.06 and a diluted EPS of $0.05 (adjusted diluted EPS of $0.28). Although this was a decrease from the previous year, it was still higher than the expected EPS.

On the revenue front, Chewy surpassed expectations by reporting $3.25 billion in net sales against the forecasted $3.2 billion. This indicates that the company’s efforts to grow its customer base and enhance customer loyalty through initiatives like Autoship have been effective. Autoship customer sales, for instance, accounted for 80.6% of net sales, up from 76.4% in the prior year.

The company’s adjusted net income also saw a significant rise, reaching $120 million, a 49.5% increase from the previous year. This improvement highlights Chewy’s ability to manage its costs effectively and drive profitability despite a challenging economic environment.

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Chewy Optimistic on Future Performance

Chewy remains optimistic about its future performance. The company has outlined strategic priorities focused on innovation across the pet category, aiming to maintain strong customer growth and loyalty. CEO Sumit Singh emphasized the momentum in the business as Chewy enters 2025, underscoring the company’s commitment to executing its strategic plans.

The company did not provide specific financial guidance for the upcoming quarters, but its performance in Q4 2024 suggests a positive trajectory. Chewy’s focus on expanding its product offerings and enhancing customer engagement through its digital platforms is expected to continue driving growth.

As part of its forward-looking strategy, Chewy is also concentrating on optimizing its operations and expanding its market presence. The company aims to leverage its existing infrastructure while exploring new opportunities to enhance shareholder value. Despite the uncertainties in the macroeconomic environment, Chewy’s management remains confident in the company’s ability to navigate challenges and capitalize on growth prospects.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.