Chewy's shares fell sharply (-8.0%) as investors reacted to a cautious outlook amid signs of deceleration in customer growth and revenue per active customer, suggesting concerns about the durability of growth despite margin expansion.
- Net sales increased 7.7% year-over-year to $3.36 billion, driven by 3.6% growth in active customers to 21.5 million and higher net sales per active customer (NSPAC) of $597.
- Autoship customer sales grew over 10%, representing 84.4% of total net sales, underscoring recurring revenue stability.
- Adjusted EBITDA margin expanded 130 basis points to 7.5%, aided by sponsored ads, product mix improvement, supply chain efficiencies, and disciplined operating expenses.
- Chewy Vet Care clinics remain a strategic focus, with ~40% of clinic customers new to Chewy and significantly higher NSPACs ($900+) for engaged customers; acquisition of Modern Animal aims to scale this segment.
- The cautious tone on the consumer environment and implied deceleration in key metrics tempered enthusiasm despite margin progress, driving the negative market response.
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