Pet Stock Chewy Surges 20% on Robust Results
Chewy (CHWY:US) shares traded sharply higher on Thursday after the petcare company reported net sales for the first quarter that beat the average analyst estimate.
Chewy said its sales jumped nearly 15% year-over-year to $2.78 billion, topping the consensus at $2.73 billion. The adjusted Ebitda of $110.2 million, up nearly 82% year-over-year translated into earnings per share of $0.05. Analysts were looking for an adjusted Ebitda of just $59 million.
Overall, net income was reported at $22.2 million, a positive surprise given that analysts were forecasting a loss of $21.3 million. The gross margin expanded by 90 basis points to 28.4% YoY, ahead of the 27.8% expected.
“2023 is off to a strong start for Chewy. Our first quarter results reflect accelerating double-digit topline growth and continued expansion of adjusted EBITDA margin. Net sales per active customer and Autoship customer sales also both reached new record highs for the company and continued to fuel customer loyalty and spend towards our platform,” said Sumit Singh, Chief Executive Officer of Chewy.
Analysts weighed in positively on Chewy following a stronger-than-expected earnings report.
“[Chewy] is one of very few companies in consumer taking up the year's guidance for sales/EBITDA as the category remains resilient," Needham & Company analysts said in a note.
Congressman Ro Khanna disclosed in May that he sold Chewy shares on April 10, when the stock closed at $35.23. Shares have been trading around similar levels on Thursday as this week’s move higher erased around half of the prior year-to-date losses.
