Chewy Inc. (CHWY) stock surged on Wednesday following the company’s release of its second-quarter 2024 earnings report, which beat analysts’ expectations and solidified its annual guidance. The online retailer of pet supplies announced an adjusted earnings per share (EPS) of $0.24, exceeding the consensus estimate of $0.02 and significantly higher than the $0.15 reported a year ago.
Chewy’s sales also displayed impressive growth, reaching $2.86 billion, a 2.6% increase year-over-year. This performance closely aligned with the consensus estimate of $2.86 billion and the company’s own guidance range of $2.84 billion to $2.86 billion. Notably, the company’s Autoship program, which offers recurring subscription deliveries, continued to drive strong sales, reaching $2.24 billion, representing a 5.8% year-over-year increase. This program, aimed at providing convenience and loyalty to customers, is a key factor in Chewy’s success.
The company’s CEO, Sumit Singh, highlighted the strong execution behind these positive results, emphasizing Chewy’s compelling value proposition and its ability to attract and engage customers. This was evident in the company’s active customer base, which grew sequentially during the quarter, reaching 20 million. Furthermore, Chewy achieved a record high in net sales per active customer, reaching $565, showcasing the increasing spending power of its loyal customer base.
Looking ahead, Chewy provided guidance for the third quarter, expecting sales between $2.84 billion and $2.86 billion, representing an approximate 3%-4% year-over-year growth. This outlook slightly trails the consensus estimate of $2.87 billion. For the entire fiscal year 2024, Chewy reaffirmed its sales guidance of $11.6 billion to $11.8 billion, indicating a 4%-6% year-over-year increase, matching the consensus forecast of $11.81 billion. In a positive move, the company also raised its adjusted EBITDA margin guidance for 2024 to 4.5%-4.7%, exceeding the previous guidance of 4.1%-4.3%. This upward revision reflects the company’s confidence in its ability to control costs and drive profitability.
The positive earnings report and optimistic outlook have fueled investor confidence, resulting in a 2.44% surge in CHWY stock during the premarket trading session on Wednesday, reaching $26.49. This strong market reaction suggests that investors are optimistic about Chewy’s continued growth and profitability.
