Q1 2024 Chewy Inc Earnings Call Transcript
Key Points
- Chewy Inc (CHWY) achieved record-breaking profitability and robust free cash flow in Q1 2024.
- Net sales exceeded the high end of guidance, increasing by approximately 3% to $2.88 billion.
- Autoship customer sales reached record levels, totaling $2.2 billion and representing 77.6% of net sales.
- Gross margin for the quarter was 29.7%, benefiting from the growing sponsored ads business and a higher mix shift into healthcare.
- Chewy Inc (CHWY) generated $163 million of adjusted EBITDA, representing a 5.7% margin.
- Active customers declined marginally on a sequential basis to approximately 20 million.
- Hard goods category sales declined, indicating ongoing challenges in this segment.
- Marketing expenses are expected to run closer to the high end of the 6% to 7% target throughout the year.
- The company anticipates a sequential decline in adjusted EBITDA margin throughout the year.
- The pet industry is still in a period of normalization, with uncertainties about the overall outlook for the balance of the year.
Ladies and gentlemen, thank you for standing by. Welcome to the Chewy first-quarter 2024 analyst call. (Operator Instructions)
I would now like to turn this conference call over to our host, Jennifer Hsu, VP of Investor Relations. Please go ahead.
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Thank you for joining us on the call today to discuss our first-quarter results for fiscal year 2024. Joining me today are Chewy's CEO, Sumit Singh; and CFO, David Reeder.
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
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