Chewy’s quarterly results surpass expectations

American online pet retailer Chewy exceeded analyst expectations in the second quarter of its FY2023, which ended July 2023. Net sales hit $2.78 billion (€‎2.55B), up 14.3% from $2.43 billion (€2.23B)‎ in the same period last year. 

Meanwhile, half-year sales reached $5.56 billion (€5.1B), noting a similar incline of 14.5% compared to the previous year.

Chewy’s CEO Sumit Singh points out the company delivered “solid results” in the quarter across both topline and profitability. 

According to the company, the growth in net sales was underpinned “by strong participation from customers, underscoring the ever-increasing strength of the Chewy ecosystem.”

Prior to the release, analysts predicted a loss of 5 cents a share on revenue of $2.76 billion (€‎2.53B), investing.com wrote. However, when the news dropped, shares were up 4%.

Canada and autoship

The company confirms that the Canada expansion unveiled in June is still on track for the third quarter. Chewy hopes to replicate its “convenient delivery experience and high-bar service that US customers enjoy” in the new market. 

The retailer’s repeat order system was highlighted as the area in which sales grew fastest, with the share of total net sales reaching 75.5% in Q2. Autoship customer sales equated to $2.1 billion (€‎1.9B), up 18.1% year-over-year. 

The system “remains a key differentiator of Chewy’s business model, enabling high visibility and predictability driven by recurring revenue streams while engendering customer loyalty,” Singh explains.

Net income during Q2 2023 witnessed a loss of 15.2%, recording $18.9 million (€‎17.3M) compared with $22.3 million (€20.5M)‎ last year. 

However, net income in the first sixth month of the year increased from $40.8 million (€‎37.5M) in 2022 to $41.1 million (€37.79M)‎ in 2023. 

Chewy clientele

As we head into autumn, Chewy noticed key consumer trends, saying customers are becoming more “discerning.” Meanwhile, the pet retailer identified that their customer base has an increased “willingness to consolidate their share of wallet to their trusted retailer of choice.”

Explaining the shift, the company is following the more fluid macro environment, partially impacted by higher inflation levels. Despite challenges, the company sees itself as protected from these financial pressures as it maintains a “high-quality customer base.”

Chewy expects Q3 net sales to total between $2.74 billion (€‎2.5B) and $2.76 billion (€‎2.53B), with full-year results to fall between $11.15 billion (€‎10.25B) and $11.35 billion (€10.43B)‎.