Chewy Inc (CHWY) Q2 2024 Earnings Call Highlights: Record NSPAC and Strong Free Cash Flow Amid ...

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In This Article:

  • Net Sales: $2.86 billion, a growth of approximately 3% year over year.

  • Autoship Customer Sales: Grew by approximately 6% to represent 78% of net sales.

  • Net Sales Per Active Customer (NSPAC): Reached a new record at $565, growing over 6% in the quarter.

  • Gross Margin: 29.5%, a year-over-year increase of 120 basis points.

  • Adjusted EBITDA: $145 million, representing a 5.1% margin and a year-over-year increase of 190 basis points.

  • Free Cash Flow: Approximately $91 million generated in the second quarter.

  • Cash, Cash Equivalents, and Marketable Securities: $695 million at the end of the quarter.

  • Active Customers: Approximately 20 million, with modest sequential growth.

  • SG&A Expenses: $538.8 million, representing 18.8% of net sales and a 100 basis point improvement year over year.

  • Advertising and Marketing Expense: $190.5 million, or 6.7% of net sales.

  • Net Income: $299.1 million, translating to $0.70 and $0.68 earnings per share on a basic and diluted basis, respectively.

  • Share Repurchase: Approximately 17.6 million shares repurchased for $500 million, plus an additional 1.3 million shares for $32.7 million.

Release Date: August 28, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Chewy Inc (NYSE:CHWY) reported Q2 net sales growth of approximately 3% to $2.86 billion, reaching the high end of their guidance range.

  • Autoship customer sales grew by approximately 6%, representing 78% of net sales, highlighting the program's convenience and value.

  • The company achieved a new record in net sales per active customer (NSPAC) at $565, growing over 6% in the quarter.

  • Chewy Inc (NYSE:CHWY) generated $145 million of adjusted EBITDA, representing a 5.1% adjusted EBITDA margin and a year-over-year increase of approximately 190 basis points.

  • The company reported strong free cash flow generation of approximately $91 million and ended the quarter with $695 million in cash, cash equivalents, and marketable securities.

Negative Points

  • Active customer growth was modest, with the company maintaining a flat outlook for active customers for the year.

  • Despite improvements, the overall pet household year-over-year growth remains relatively flat.

  • The company noted that gross margin will fluctuate on a quarterly basis, indicating potential variability in profitability.

  • Chewy Inc (NYSE:CHWY) continues to face a competitive environment, particularly in the hard goods segment.

  • The company is not planning any significant incremental investment in Canada, which may limit growth opportunities in that market.

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