Q3 2024 Chewy Inc Earnings Call Transcript
Key Points
- Chewy Inc (CHWY) reported a 5% increase in Q3 net sales to $2.88 billion, exceeding the high end of their guidance range.
- The autoship program continues to drive customer loyalty, with autoship customer sales reaching $2.3 billion, representing 80% of Q3 net sales and a 9% year-over-year increase.
- Chewy Inc (CHWY) achieved a sequential increase in active customers, ending the quarter with approximately 20.2 million active customers, up 160,000 sequentially.
- The company reported $138 million of adjusted EBITDA in Q3, representing a 4.8% margin and approximately 180 basis points of margin expansion year-over-year.
- Chewy Inc (CHWY) continues to generate robust free cash flow, reporting $151.8 million in Q3, demonstrating their ability to invest in growth initiatives and return capital to shareholders.
- Despite growth, the Canadian business remains relatively small and immaterial to the overall scale of Chewy Inc (CHWY).
- The company anticipates a sequential decline in Q4 adjusted EBITDA margin due to typical seasonality and the timing of certain investments.
- Chewy Inc (CHWY) expects advertising and marketing expenses to be at the high end of their 6% to 7% of net sales range for the full year, indicating increased spending.
- The company is still in the early stages of its Chewy Plus membership program, with contribution to the overall enterprise remaining immaterial.
- Chewy Inc (CHWY) faces challenges in fully benefiting from improvements in hard goods performance until there is a more fulsome recovery in discretionary purchasing.
Hello, everyone, and welcome to the Chewy third-quarter 2024 earnings call. My name is Emily, and I'll be coordinating your call today. (Operator Instructions)
I will now hand the call over to our host, Chewy CFO, David Reeder, to begin. David, please go ahead.
Thank you for joining us on the call today to discuss our third-quarter results for fiscal year 2024. Joining me today is Chewy's CEO, Sumit Singh. Our earnings release, which was filed with the SEC earlier today, has been posted to the Investor Relations section of our website. In addition to the earnings release, a presentation summarizing our results is also available on our website at investor.chewy.com.
On our call today, we will be making forward-looking statements, including statements concerning Chewy's financial results and performance, industry trends, strategic initiatives, share repurchase program, and the environment in which we operate.
Such statements are considered forward-looking statements under the Private
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