Chewy announces first international expansion to Canada

The Florida-based company has announced its first-ever expansion into international markets, as they aim to launch its services in Canada during Q3 2023. 

International expansion has been in the firm’s pipeline for a while, and according to the retailer now is the right time. “We have strengthened our fundamentals over the past few years, both operationally and financially, and we have put our U.S. business on a steady trajectory of growth and profitability,” they state. 

Chewy believes that the North American country offers them “an exciting opportunity” in the e-commerce space. 

The company will start targeting Toronto, as the city is the largest metropolitan area in Canada. After the initial launch, they plan “to take a gradual and responsible approach to expanding [their] footprint.”

Higher sales and income

The retailer’s net sales hit nearly $2.8 billion (€‎2.6B) in the first quarter of the year, a 14.7% increase from the same period last year, which recorded $2.4 billion (€2.2B).

Chewy’s net income also increased from $18.4 million (€‎17.1M) in Q1 2022 to $27.2 million (€‎25.2M) in the same quarter of 2023.

“The superior value proposition of the Chewy brand continues to resonate, and our team continues to demonstrate operating discipline and high-quality execution,” CEO Sumit Singh comments.

The retailer is off to a “strong start” in 2023. The CEO also notes that the company recorded a record high in “net sales per active customer.” In a note to shareholders, they highlighted that the company is growing across cross-category purchases. 

According to the financial website Nasdaq, hours after the earnings release went public, company shares jumped by 11%.

Slightly fewer customers 

The company says that 75% of the total sales came from Autoship customers, representing $2.08 billion (€1.95B). This is 18.6% more than during the same period in 2022. 

According to Chewy, their Autoship service is “a powerful tool,” as it pushes “recurring and predictable revenue and long-term customer loyalty.” 

However, the company marked a slight decline in the number of active customers – those who have ordered a product or service in the last year—which fell 0.9% to a total of 20.4 million in the quarter. 

Guidance

Chewy predicts net sales to account for around $2.7 billion (€2.52B) in Q2 2023, a 13% to 14% year-over-year growth. 

For its fiscal year. 2023, it expects to garner revenue of between $11.1 billion (€10.4B) and $11.3 billion (€10.6B), an increase of between 10% and 12%.

Commenting on the recent launch of their new automated fulfillment center in Nashville, the retailer says it is improving the margin efficiency and hopes it will contribute to scale selling and general and administrative expenses (SG&A) in the long term.