We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Chewy's Q3 Earnings Lag Estimates, FY24 Sales View Raised
Read MoreHide Full Article
Chewy, Inc. (CHWY - Free Report) posted mixed third-quarter fiscal 2024 results, with the top line surpassing the Zacks Consensus Estimate but the bottom line missing the same. Both the metrics showed year-over-year growth.
The company delivered top-line growth that exceeded the high end of its net sales guidance. This was accompanied by a sequential increase in active customers, indicating sustained engagement and growth. The company also reported continued expansion in adjusted EBITDA margins and demonstrated financial strength through robust free cash flow generation.
CHWY’s Quarterly Performance: Key Metrics and Insights
Chewy posted adjusted earnings of 20 cents per share, which missed the Zacks Consensus Estimate of 23 cents. The figure increased 33.3% from the prior-year period.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The company reported net sales of $2.88 billion, slightly beating the Zacks Consensus Estimate of $2.86 billion and increasing 4.8% from $2.75 million posted in the year-ago period. This growth was fueled by active customer expansion and cross-category product penetration, leading to continued gains in customer wallet share.
Sales from Consumables grew 2.9% year over year to $2.04 billion, which beat the consensus estimate of $2.02 billion. Hardgoods increased 4% to $296.5 million, surpassing the consensus estimate of $289 million. Other sales rose 13% year over year to $537.9 million, in line with the consensus estimate.
Chewy’s gross profit increased 7.9% year over year to $843.9 million. The gross margin expanded 80 basis points (bps) to 29.3% compared with 28.5% in the third quarter of fiscal 2023. This increase was mainly driven by supply-chain efficiency gains across the company’s network, along with margin expansion in the consumables, healthcare and private brands businesses.
SG&A expenses rose 2.3% year over year to $626.5 million in the quarter. As a percentage of net sales, SG&A expenses decreased 50 bps year over year to 21.8%.
Adjusted EBITDA was $138.2 million, an increase from $82.6 million reported in the year-ago quarter. The adjusted EBITDA margin increased 180 bps year over year to 4.8%. This improvement was driven by better gross margin performance, a disciplined approach to cost management and the ongoing benefits of fixed cost leverage.
CHWY’s Financial Health Snapshot
Chewy exited the quarter with cash and cash equivalents and marketable securities of $508 million, It remained debt-free with an overall liquidity position of approximately $1.3 billion and total shareholders’ equity of $223.4 million. Net cash used in operating activities for the nine months ended Oct. 27, 2024 was $388.8 million.
CHWY reported a free cash flow of $151.8 million for the fiscal third quarter, highlighting the company’s ability to generate increasing levels of free cash flow while continuing to invest in growth initiatives and return significant capital to its shareholders.
What to Expect From CHWY in the Future
For fourth-quarter fiscal 2024, management expects net sales in the range of $3.18-$3.20 billion, indicating approximate growth of 13%.
Management has revised fiscal 2024 net sales guidance to the range of $11.79-$11.81 billion, implying 6% year-over-year growth. This revised outlook is an upgrade from the previous guidance of $11.6-$11.8 billion, which indicated 4-6% growth.
The company raised its expectation for adjusted EBITDA margin to 4.6-4.8%, up from the previous guidance of 4.5-4.7%.
This Zacks Rank #2 (Buy) stock has risen 27.8% in the past three months compared with the industry’s growth of 23.4%.
The consensus estimate for Bark’s current fiscal-year sales and earnings indicates growth of 2% and 81.8%, respectively, from the prior-year reported levels. BARK delivered a trailing four-quarter average earnings surprise of 16.7%.
Freshpet, Inc. (FRPT - Free Report) , together with its subsidiaries, manufactures, distributes and markets natural fresh meals and treats for dogs and cats. It currently has a Zacks Rank #2. FRPT delivered a trailing four-quarter average earnings surprise of 144.5%.
The Zacks Consensus Estimate for Freshpet’s current fiscal-year sales and EPS indicates growth of 27.3% and 224.3%, respectively, from the prior-year levels.
US Foods Holding Corp. (USFD - Free Report) engages in marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. It currently carries a Zacks Rank #2. USFD delivered an earnings surprise of 3.7% in the last reported quarter.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings indicates growth of 6.4% and 18.6%, respectively, from the prior-year reported levels.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Chewy's Q3 Earnings Lag Estimates, FY24 Sales View Raised
Chewy, Inc. (CHWY - Free Report) posted mixed third-quarter fiscal 2024 results, with the top line surpassing the Zacks Consensus Estimate but the bottom line missing the same. Both the metrics showed year-over-year growth.
The company delivered top-line growth that exceeded the high end of its net sales guidance. This was accompanied by a sequential increase in active customers, indicating sustained engagement and growth. The company also reported continued expansion in adjusted EBITDA margins and demonstrated financial strength through robust free cash flow generation.
CHWY’s Quarterly Performance: Key Metrics and Insights
Chewy posted adjusted earnings of 20 cents per share, which missed the Zacks Consensus Estimate of 23 cents. The figure increased 33.3% from the prior-year period.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Chewy Price, Consensus and EPS Surprise
Chewy price-consensus-eps-surprise-chart | Chewy Quote
The company reported net sales of $2.88 billion, slightly beating the Zacks Consensus Estimate of $2.86 billion and increasing 4.8% from $2.75 million posted in the year-ago period. This growth was fueled by active customer expansion and cross-category product penetration, leading to continued gains in customer wallet share.
Sales from Consumables grew 2.9% year over year to $2.04 billion, which beat the consensus estimate of $2.02 billion. Hardgoods increased 4% to $296.5 million, surpassing the consensus estimate of $289 million. Other sales rose 13% year over year to $537.9 million, in line with the consensus estimate.
Chewy’s gross profit increased 7.9% year over year to $843.9 million. The gross margin expanded 80 basis points (bps) to 29.3% compared with 28.5% in the third quarter of fiscal 2023. This increase was mainly driven by supply-chain efficiency gains across the company’s network, along with margin expansion in the consumables, healthcare and private brands businesses.
SG&A expenses rose 2.3% year over year to $626.5 million in the quarter. As a percentage of net sales, SG&A expenses decreased 50 bps year over year to 21.8%.
Adjusted EBITDA was $138.2 million, an increase from $82.6 million reported in the year-ago quarter. The adjusted EBITDA margin increased 180 bps year over year to 4.8%. This improvement was driven by better gross margin performance, a disciplined approach to cost management and the ongoing benefits of fixed cost leverage.
CHWY’s Financial Health Snapshot
Chewy exited the quarter with cash and cash equivalents and marketable securities of $508 million, It remained debt-free with an overall liquidity position of approximately $1.3 billion and total shareholders’ equity of $223.4 million. Net cash used in operating activities for the nine months ended Oct. 27, 2024 was $388.8 million.
CHWY reported a free cash flow of $151.8 million for the fiscal third quarter, highlighting the company’s ability to generate increasing levels of free cash flow while continuing to invest in growth initiatives and return significant capital to its shareholders.
What to Expect From CHWY in the Future
For fourth-quarter fiscal 2024, management expects net sales in the range of $3.18-$3.20 billion, indicating approximate growth of 13%.
Management has revised fiscal 2024 net sales guidance to the range of $11.79-$11.81 billion, implying 6% year-over-year growth. This revised outlook is an upgrade from the previous guidance of $11.6-$11.8 billion, which indicated 4-6% growth.
The company raised its expectation for adjusted EBITDA margin to 4.6-4.8%, up from the previous guidance of 4.5-4.7%.
This Zacks Rank #2 (Buy) stock has risen 27.8% in the past three months compared with the industry’s growth of 23.4%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Bark, Inc. (BARK - Free Report) , a dog-centric company, provides products, services and content for dogs. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus estimate for Bark’s current fiscal-year sales and earnings indicates growth of 2% and 81.8%, respectively, from the prior-year reported levels. BARK delivered a trailing four-quarter average earnings surprise of 16.7%.
Freshpet, Inc. (FRPT - Free Report) , together with its subsidiaries, manufactures, distributes and markets natural fresh meals and treats for dogs and cats. It currently has a Zacks Rank #2. FRPT delivered a trailing four-quarter average earnings surprise of 144.5%.
The Zacks Consensus Estimate for Freshpet’s current fiscal-year sales and EPS indicates growth of 27.3% and 224.3%, respectively, from the prior-year levels.
US Foods Holding Corp. (USFD - Free Report) engages in marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. It currently carries a Zacks Rank #2. USFD delivered an earnings surprise of 3.7% in the last reported quarter.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings indicates growth of 6.4% and 18.6%, respectively, from the prior-year reported levels.