Chewy recovers sales in the second quarter, cuts outlook for 2022

The American online pet food retailer expects to post net sales of $10 billion this year, slightly less than projected just a few months ago due to a slowdown in demand.

Chewy posted net sales of $2.43 billion in the second quarter of the fiscal year 2022 ending July 31 2022, a year-on-year growth of 12.8%. In the same period of 2021, the company reached $2.15 billion in sales.

The online retailer increased its base of active customers in the US to 20.5 million (+2.1%). According to the company, each active customer spent an average of $462 in the quarter.

“We are proud of our second quarter performance and ability to deliver double-digit top-line growth and margin expansion during a period when accelerating inflation placed incremental pressure on consumers,” said Chewy CEO Sumit Singh.

In June, Chewy forecasted yearly net sales between $10.2 billion and $10.4 billion (+15-17%). But due to the current global inflationary situation, the company trimmed its outlook and now expects sales of between $9.9 billion and $10 billion (+11%-12%).

Pet parents are buying less

Chewy highlighted with investors that last 3 months have been challenging for the business.

“Pet category consumers responded to growing economic uncertainty by curtailing some of their purchase activity, leading to industry wide declines in unit volume,” the company said in a letter to investors.

CEO Singt showed optimism and said that once the situation recovers, they believe that “customer acquisition headwinds related to discretionary demand levels will abate.”

The company is optimistic about the recently launched wellness and insurance program CarePlus. It started in 2 states in June as a test and now it is available in 31 states. Chewy plans a national rollout of this product by the end of the year.