Chewy reports sales growth as customer numbers remain stable

Chewy posted net sales of $2.88 billion (€2.72B) in the third quarter of their fiscal year (FY) 2024, which ended 27 October, marking a 4.8 percent year-on-year (YoY) increase. However, it’s roughly the same as the company’s net sales numbers for the past 3 quarters.

“These results underscore the durability of our business model and our team’s relentless focus on high-quality execution and operational discipline,” says CEO Sumit Singh.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) have risen significantly over the past year. Though the quarterly adjusted EBITDA of $138.2 million (€130.8M) was down slightly from previous quarters, it marked a $55.7 million (€52.7M) increase from the same period in 2023.

The company’s net income in Q3 FY2024 stood at $3.9 million (€3.7M), up from $35.7 million (€33.8M) in losses between August and October 2023.

Repeat sales drive growth

The earnings report showed that sales per active customer hit $567 (€536) in the third quarter when there were 20.2 million active customers. In the same quarter in 2023, that number was $544 (€515) for a slightly larger 20.3 million customers.

The American pet supplier reported that much of the growth came from Autoship, its subscription-style fulfillment service.

Repeat orders and loyal customers have been important to the company’s growth. This was reflected in Chewy’s earnings report, which showed that sales per customer have increased despite the number of active customers – those who used Chewy’s products or services in the past year – declining slightly.

New programs and services

In the summer of 2024, Chewy began testing Chewy+, a new rewards program for shoppers. The program builds upon the company’s reliance on repeat customers by offering new benefits for shopper loyalty.

Speaking on the earnings call, Singh said that the results have been encouraging so far, though they’ve had little effect on the numbers due to the program’s small size. He noted that Chewy+ members have been using the company’s Autoship program at higher rates, calling this “a potentially compelling flywheel effect off the Chewy+ program.”

The company recently opened its third vet care center in the Atlanta, Georgia, metro area.

Chewy’s outlook remains optimistic, with the earnings report projecting 13% YoY growth in net sales of between $3.18 billion (€3.01B) and $3.20 billion (€3.03B) in the fourth quarter.

For FY2024, the pet retailer forecasts an increase of 6% in net sales to a range of $11.79 billion (€11.16B) to $11.81 billion (€11.18B).