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Chewy, Inc. (NYSE: CHWY) has announced its financial results for the second quarter of fiscal year 2024, which ended on July 28, 2024. The company reported net sales of $2.86 billion, reflecting a year-over-year increase of 2.6%. Its gross margin expanded by 120 basis points to 29.5% compared to the same period last year. Chewy achieved a net income of $299.1 million, which includes share-based compensation expenses and related taxes amounting to $82.5 million.
The net margin saw a substantial increase, rising by 980 basis points to 10.5% year over year. Basic earnings per share (EPS) were reported at $0.70, marking a $0.65 increase from the previous year. Diluted EPS also saw a significant rise, reaching $0.68, up by $0.63 year over year.
Adjusted EBITDA for the quarter was $144.8 million, an increase of $56.7 million, with an adjusted EBITDA margin of 5.1%, up by 190 basis points. Adjusted net income stood at $104.8 million, reflecting a $40.2 million increase year over year, and adjusted EPS, both basic and diluted, was $0.24, up by $0.09 year over year.
Chewy Outperforms Expectations in Fiscal Q2 2024
When comparing Chewy’s current performance against market expectations, the company surpassed the anticipated EPS and revenue targets. Analysts had projected an EPS of $0.22 and revenue of $2.86 billion for the quarter. Chewy significantly outperformed these expectations, posting a basic EPS of $0.70 and a diluted EPS of $0.68. The revenue matched the forecast at $2.86 billion.
The company’s net income of $299.1 million was a substantial increase from the $20.2 million reported in the same quarter last year. The higher-than-expected earnings were attributed to improved gross margins, efficient cost management, and increased customer engagement. The net margin increase to 10.5% from 0.7% year over year highlights the company’s effective operational strategies and cost control measures.
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Chewy Optimistic on Upcoming Quarters
Chewy’s guidance for the upcoming quarters indicates a positive outlook, reflecting confidence in sustained growth and operational efficiency. The company emphasized its commitment to driving broader and deeper customer engagement, as evidenced by its record net sales per active customer of $565 and a sequential increase in active customers to 20 million.
The company expects to maintain its growth trajectory by continuing to enhance its value proposition and customer experience. Chewy’s strategic focus on expanding its product offerings and improving its service delivery is expected to contribute to its financial performance in the coming quarters.
The company’s management has highlighted the importance of innovation and customer-centric initiatives in achieving long-term growth and profitability.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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