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Chewy, the online pet products retailer, said sales were up 17% in the latest quarter, but that growth was below analysts’ estimates.
Elena Vyaseleva/Dreamstime.com
Chewy
shares were trading sharply lower in late trading Tuesday after the online pet products retailer reported financial results and guidance that fell shy of Wall Street estimates. Chewy said that pandemic-related supply chain constraints continued to pressure results.
In a letter to shareholders, Chewy (ticker: CHWY) management referred to a “conflict between the fundamentally strong consumer demand that underpins our business and the highly challenging operating environment.”
In late trading, Chewy shares were down 14%, to $43.75, reversing a 4.5% rally in Tuesday’s regular session.
For the fiscal fourth quarter ended Jan. 30, Chewy reported sales of $2.39 billion, up 17% from a year ago, but slightly below the company’s guidance range of $2.4 billion to $2.44 billion, as well as the Wall Street consensus forecast of $2.42 billion.
The company posted a loss for the quarter of $63.6 million. Adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, was a loss of $28.1 million. Gross margin was 25.4%, down 1.7 percentage points from a year earlier.
The company said demand was strong but that supply constraints remain a factor for the business.
“Metrics that measure demand and customer engagement such as site traffic, conversion, order volumes, and basket size all showed positive trends in the fourth quarter,” the company said in its letter to shareholders. “At the same time, we saw operating conditions in certain areas deteriorate as the quarter unfolded, particularly when Omicron’s mid-quarter arrival further disrupted already-weakened supply chains across our industry.”
For the full year, Chewy had revenue of $8.9 billion, up 24%, with a net loss of $73.8 million, but an adjusted Ebitda profit of $78.6 million.
For the April quarter, Chewy projects sales of $2.4 billion to $2.43 billion, up between 12% and 14% from the year earlier period, which is below the Wall Street consensus of $2.51 billion. Chewy sees revenue for the fiscal year ending January 2023 between $10.2 billion and $10.4 billion, up 15% to 17%, falling short of the old consensus forecast of $10.6 billion. The company expects an adjusted Ebitda margin for the year of between zero and 1%.
“As we look to 2022, the positive demand trends we saw in the fourth quarter have carried over into the new year, end-pricing is starting to catch up with inflation, and inbound freight costs have come down,” the company said in a statement. “At the same time, supply chains are still disrupted, out-of-stock levels remain elevated, and our new outbound freight contract is now in effect.”
Write to Eric J. Savitz at [email protected]
