Business
Chewy : First Quarter 2025 Earnings Call Press Release
Chewy : First Quarter 2025 Earnings Call Press
About this update from Chewy, Inc.
Chewy Announces First Quarter 2025 Financial Results PLANTATION, Fla., June 11, 2025 (BUSINESS WIRE) - Chewy, Inc. (NYSE: CHWY) ("Chewy"), a trusted destination for pet parents and partners everywhere, has released its financial results for the first quarter of fiscal year 2025 ended May 4, 2025. Fiscal Q1 2025 Highlights: Net sales of $3.12 billion increased 8.3 percent year over year Gross margin of 29.6 percent decreased 10 basis points year over year Net income of $62.4 million, including share-based compensation expense and related taxes of $78.0 million Net margin of 2.0 percent decreased 30 basis points year over year Basic earnings per share of $0.15, consistent year over year Diluted earnings per share of $0.15, consistent year over year Adjusted EBITDA (1) of $192.7 million, an increase of $29.8 million year over year Adjusted EBITDA margin (1) of 6.2 percent increased 50 basis points year over year Adjusted net income (1) of $148.9 million, an increase of $11.8 million year over year Adjusted basic earnings per share (1) of $0.36, an increase of $0.04 year over year Adjusted diluted earnings per share (1) of $0.35, an increase of $0.04 year over year "Fiscal year 2025 is off to a strong start as the momentum at Chewy continues," said Sumit Singh, Chief Executive Officer of Chewy. "We delivered topline growth exceeding the high-end of our net sales guidance range, year-over-year growth in active customers, and compelling profitability and free cash flow generation. These results are a testament to the resiliency of the pet category and underscore the strength of Chewy's value proposition and our ability to continue to gain market share." Management will host a conference call and webcast to discuss Chewy's financial results today at 8:00 am ET. Chewy Fiscal First Quarter 2025 Financial Results Conference Call When: Wednesday, June 11, 2025 Time: 8:00 am ET Live webcast and replay: https://investor.chewy.com Conference call registration: https://www.netroadshow.com/events/login?show=c47a4a87&confId=82612 (1) Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, and adjusted basic and diluted earnings per share are non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures. About Chewy Our mission is to be the most trusted and convenient destination for pet parents and partners everywhere. We believe that we are the preeminent online source for pet products, supplies, and prescriptions as a result of our broad selection of high-quality products and services, which we offer at competitive prices and deliver with an exceptional level of care and a personal touch to build brand loyalty and drive repeat purchasing. We seek to continually develop innovative ways for our customers to engage with us, as our websites and mobile applications allow our pet parents to manage their pets' health, wellness, and merchandise needs, while enabling them to conveniently shop for our products. We partner with approximately 3,200 of the best and most trusted brands in the pet industry, and we create and offer our own private brands. Through our websites and mobile applications, we offer our customers approximately 130,000 products and services offerings, to bring what we believe is a high-bar, customer-centric experience to our customers. Forward-Looking Statements This communication contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this communication, including statements regarding our share repurchase program, our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "potential," "predict," "project," "seek," "should," "target," "will" or "would" or the negative of these words or other similar terms or expressions, although not all forward-looking statements contain these identifying words. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could cause actual results to differ materially from those in such forward-looking statements, including but not limited to, our ability to: sustain our recent growth rates and successfully manage challenges to our future growth, including introducing new products or services, improving existing products and services, and expanding into new jurisdictions and offerings; successfully respond to business disruptions; successfully manage risks related to the macroeconomic environment, including any adverse impacts on our business operations, financial performance, supply chain, workforce, facilities, customer services and operations; acquire and retain new customers in a cost-effective manner and increase our net sales, improve margins and maintain profitability; manage our growth effectively; maintain positive perceptions of the Company and preserve, grow, and leverage the value of our reputation and our brand; limit operating losses as we continue to expand our business; forecast net sales and appropriately plan our expenses in the future; estimate our market share; strengthen our current supplier relationships, retain key suppliers, and source additional suppliers; negotiate acceptable pricing and other terms with third-party service providers, suppliers and outsourcing partners and maintain our relationships with such parties; mitigate changes in, or disruptions to, our shipping arrangements and operations; optimize, operate and manage the expansion of the capacity of our fulfillment centers; provide our customers with a cost-effective platform that is able to respond and adapt to rapid changes in technology; limit our losses related to online payment methods; maintain and scale our technology, the reliability of our websites, mobile applications, and network infrastructure, including through the use of artificial intelligence; maintain adequate cybersecurity with respect to our systems and retain third-party service providers that do the same with respect to their systems; maintain consumer confidence in the safety, quality and health of our products; limit risks associated with our suppliers and our outsourcing partners; comply with existing or future laws and regulations in a cost-efficient manner; utilize net operating loss and tax credit carryforwards, and other tax attributes; adequately protect our intellectual property rights; successfully defend ourselves against any allegations or claims that we may be subject to; attract, develop, motivate and retain highly-qualified and skilled employees; respond to economic conditions, industry trends, and market conditions, and their impact on the pet products market; reduce merchandise returns or refunds; respond to severe weather and limit disruption to normal business operations; manage new acquisitions, investments or alliances, and integrate them into our existing business; successfully compete in new offerings; manage challenges presented by international markets; successfully compete in the pet products and services health and retail industry, especially in the e-commerce sector; comply with the terms of our credit facility; raise capital as needed; and maintain effective internal control over financial reporting. You should not rely on forward-looking statements as predictions of future events, and you should understand that these statements are not guarantees of performance or results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of factors. We have based the forward-looking statements contained in this communication primarily on our current assumptions, expectations, and projections about future events and trends that we believe may affect our business, financial condition, and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled "Risk Factors" included under Part 1, Item 1A in our Annual Report on Form 10-K for the fiscal year ended February 2, 2025, in our other filings with the Securities and Exchange Commission, our subsequent quarterly reports, and elsewhere in this communication. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this communication. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this communication. While we believe that such information provides a reasonable basis for these statements, this information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. The forward-looking statements made in this communication relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this communication to reflect events or circumstances after the date of this communication or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments. CHEWY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, except share and per share data) May 4, 2025 As of February 2, 2025 Assets (Unaudited) Current assets: Cash and cash equivalents $ 616.4 $ 595.8 Accounts receivable 200.0 169.0 Inventories 806.9 836.7 Prepaid expenses and other current assets 88.5 60.9 Total current assets 1,711.8 1,662.4 Property and equipment, net 560.6 562.2 Operating lease right-of-use assets 449.5 450.4 Goodwill 39.4 39.4 Deferred tax assets 257.5 257.5 Other non-current assets 41.5 42.6 Total assets $ 3,060.3 $ 3,014.5 Liabilities and stockholders' equity Current liabilities: Trade accounts payable $ 1,177.0 $ 1,175.9 Accrued expenses and other current liabilities 963.2 1,030.8 Total current liabilities 2,140.2 2,206.7 Operating lease liabilities 500.2 502.4 Other long-term liabilities 44.3 43.9 Total liabilities 2,684.7 2,753.0 Stockholders' equity: Preferred stock, $0.01 par value per share, 5,000,000 shares authorized, no shares issued and outstanding as of May 4, 2025 and February 2, 2025 - - Class A common stock, $0.01 par value per share, 1,500,000,000 shares authorized, 195,353,640 and 193,892,875 shares issued and outstanding as of May 4, 2025 and February 2, 2025, respectively 2.0 1.9 Class B common stock, $0.01 par value per share, 395,000,000 shares authorized, 219,698,561 and 219,698,561 shares issued and outstanding as of May 4, 2025 and February 2, 2025, respectively 2.2 2.2 Additional paid-in capital 1,891.4 1,840.2 Accumulated deficit (1,520.5) (1,582.9) Accumulated other comprehensive income 0.5 0.1 Total stockholders' equity 375.6 261.5 Total liabilities and stockholders' equity $ 3,060.3 $ 3,014.5 CHEWY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in millions, except per share data) (Unaudited) 13 Weeks Ended May 4, 2025 April 28, 2024 Net sales $ 3,116.0 $ 2,877.7 Cost of goods sold 2,192.2 2,023.7 Gross profit 923.8 854.0 Operating expenses: Selling, general and administrative 653.1 602.6 Advertising and marketing 193.8 186.8 Total operating expenses 846.9 789.4 Income from operations 76.9 64.6 Interest and other income, net 1.0 13.8 Income before income tax provision 77.9 78.4 Income tax provision 15.5 11.5 Net income $ 62.4 $ 66.9 Comprehensive income: Net income $ 62.4 $ 66.9 Foreign currency translation adjustments 0.4 0.4 Comprehensive income $ 62.8 $ 67.3 Earnings per share attributable to common Class A and Class B stockholders: Basic $ 0.15 $ 0.15 Diluted $ 0.15 $ 0.15 Weighted-average common shares used in computing earnings per share: Basic 413.7 434.9 Diluted 425.3 436.4 CHEWY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) 13 Weeks Ended May 4, 2025 April 28, 2024 Cash flows from operating activities Net income $ 62.4 $ 66.9 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 30.0 28.0 Share-based compensation expense 74.5 65.4 Non-cash lease expense 8.6 8.0 Change in fair value of equity warrants and investments 2.6 0.9 Unrealized foreign currency (gains) losses, net (0.2) 0.6 Other 4.9 (1.9) Net change in operating assets and liabilities: Accounts receivable (30.9) (18.2) Inventories 30.1 (33.1) Prepaid expenses and other current assets (27.4) (8.5) Other non-current assets (0.5) 0.2 Trade accounts payable 1.1 38.8 Accrued expenses and other current liabilities (61.7) (58.3) Operating lease liabilities (9.2) (8.2) Other long-term liabilities 2.1 1.3 Net cash provided by operating activities 86.4 81.9 Cash flows from investing activities Capital expenditures (37.7) (29.3) Proceeds from maturities of marketable securities - 535.0 Other (3.5) - Net cash (used in) provided by investing activities (41.2) 505.7 Cash flows from financing activities Repurchases of common stock (23.1) - Proceeds from, net of income taxes paid for, parent reorganization transaction 1.6 (54.8) Principal repayments of finance lease obligations (0.1) (0.3) Payments of secondary offering costs (0.5) - Other (2.9) - Net cash used in financing activities (25.0) (55.1) Effect of exchange rate changes on cash and cash equivalents 0.4 (0.1) Net increase in cash and cash equivalents 20.6 532.4 Cash and cash equivalents, as of beginning of period 595.8 602.2 Cash and cash equivalents, as of end of period $ 616.4 $ 1,134.6