Shares of Chewy, Inc. (NYSE: CHWY) stayed purple on Thursday. The inventory has dropped 2% over the previous three months. The pet merchandise firm ended fiscal 12 months 2024 on a powerful observe with stable outcomes for the fourth quarter and full 12 months. It additionally made important progress on its strategic priorities. Chewy expects this momentum to proceed within the coming 12 months as effectively. Right here’s a take a look at its key development drivers:
Gross sales and earnings development
Chewy noticed robust development in gross sales and earnings for the fourth quarter and full 12 months of 2024. Internet gross sales elevated practically 15% year-over-year to $3.25 billion in This autumn, pushed by a rise in lively prospects, a return to development in arduous items merchandise, and Autoship buyer loyalty throughout the consumables, and well being and wellness classes. Full-year 2024 gross sales grew 6.4% YoY to $11.86 billion.
The highest line additionally benefited from an additional week in fiscal 12 months 2024, which added approx. $227 million in gross sales to each the quarter and the 12 months. Excluding the affect of the 53rd week, gross sales grew practically 7% in This autumn and over 4% in FY2024.
Adjusted earnings per share grew greater than 50% YoY for each the quarter and the 12 months, amounting to $0.28 in This autumn 2024 and $1.04 in FY2024.
Sturdy enterprise efficiency
In the course of the fourth quarter, Chewy noticed robust efficiency throughout its enterprise with development in all its key metrics. Autoship buyer gross sales elevated 21% YoY to $2.62 billion in This autumn. The Autoship program, which accounted for practically 81% of internet gross sales within the fourth quarter, supplies a predictable recurring income stream to the corporate.
Chewy ended the fourth quarter with 20.5 million lively prospects, reflecting a YoY enhance of two.1%. The corporate’s efforts in bettering its assortment, on-site and cell app capabilities, and advertising helped drive development in new prospects and reactivations, together with an enchancment in gross churn. Chewy believes its lively buyer development has reached an inflection level and it expects to ship development on this metric in 2025. The corporate additionally noticed development in internet gross sales per lively buyer, which rose 4.1% YoY to $578 in This autumn.
Chewy’s gross margin expanded 30 foundation factors YoY to twenty-eight.5% in This autumn. This enchancment was pushed primarily by positive factors in its sponsored advertisements enterprise in addition to a shift in product combine to premium classes.
CHWY’s community of Chewy Vet Care (CVC) clinics continues to yield advantages when it comes to buyer acquisition and engagement. The corporate is seeing rising engagement from each new and present prospects. It opened eight CVC places, reaching the higher finish of its annual goal vary of 4-8 openings. The pet provides supplier plans to open 8-10 new clinics in FY2025, because it expands its attain over the approx. $25 billion vet companies market.
Encouraging outlook
Chewy has supplied an encouraging outlook for fiscal 12 months 2025. Because the pet trade continues to see normalization, the corporate believes it’s on observe to ship development and margin growth within the coming 12 months.
Internet gross sales are anticipated to vary between $3.06-3.09 billion for the primary quarter of 2025 and between $12.30-12.45 billion for the complete 12 months of 2025. This represents a YoY development of approx. 6-7% for each the quarter and the 12 months, when adjusted to exclude the affect of the 53rd week in FY2024.
Gross sales development is anticipated to be pushed by development in lively prospects and internet gross sales per lively buyer, in addition to minimal value inflation. Based mostly on the present setting, the corporate is optimistic that it is going to be capable of ship YoY lively buyer development within the low single-digit vary with the extent of internet additions broadly constant all through the course of the 12 months.
For the primary quarter of 2025, Chewy expects adjusted EPS to vary between $0.30-0.35.
