Chewy Inc. Q4 2024 Earnings: A Deep Dive

Chewy Inc. (NYSE: CHWY) reported its fourth-quarter 2024 earnings results on March 27, 2025, revealing a mixed bag of financial performance. The company's net sales surged by 14.9% year-over-year to $3.25 billion, showcasing robust growth in the e-commerce pet supplies sector. However, net income fell 29% to $22.8 million, or $0.05 per share, compared to the previous year. Despite this, adjusted EPS increased by 55.6% year-over-year to $0.28, indicating underlying strength in the company's operations.

Key Metrics and Insights

Chewy's active customer base grew by 2.1%, while net sales per active customer rose by 4.1% compared to the previous year. This growth in customer engagement and spending highlights the company's success in retaining and expanding its customer base. The company's cash and cash equivalents at the end of the period totaled $595.7 million, providing a solid financial foundation for future investments and growth.

Strategic Initiatives Driving Growth

Chewy's strategic initiatives have been pivotal in driving its growth. The company's commitment to customer service, including 24/7 assistance and personalized "Pet Profile" features, has helped it "WOW" its customers. The Autoship subscription program, which allows customers to schedule their orders, has contributed to high customer loyalty and repeat business. Additionally, Chewy's wide selection of products, competitive pricing, and fast shipping have made it a go-to destination for pet parents.

Challenges and Future Outlook

The 29% decrease in net income can be attributed to increased expenses and operational costs. SG&A expenses rose by 11.9% year-over-year to $700.7 million, which, despite a 16% increase in gross profit to $926 million, was not enough to offset the higher expenses. To address these challenges, Chewy plans to focus on increasing its adjusted EBITDA margin to 5.4-5.7% in fiscal 2025, up from 4.8% in fiscal 2024. The company also expects net sales to grow by 6-7% year-over-year, with projections for the first quarter of fiscal 2025 ranging between $3.06 billion and $3.09 billion. Adjusted earnings are expected to be between 30 cents and 35 cents per share for the first quarter of fiscal 2025.



Competitive Landscape

Chewy's performance in Q4 2024 stands out when compared to its competitors. Petmed Express Inc reported revenues of $259.34 million for the 12 months ending Q3 2024, while Petco Health And Wellness Company Inc reported revenues of $6,057.14 million for the same period. Chewy's $3.25 billion in net sales for Q4 2024 is significantly higher, demonstrating its market leadership in the e-commerce pet supplies sector.

Conclusion

Chewy Inc.'s Q4 2024 earnings report highlights both its strengths and challenges. The company's robust growth in net sales and customer engagement is a testament to its strategic initiatives and commitment to customer service. However, the decrease in net income due to increased expenses poses a challenge that Chewy is addressing through cost management and operational efficiencies. As the company looks ahead to fiscal 2025, its focus on increasing its adjusted EBITDA margin and driving sales growth positions it well for continued success in the competitive e-commerce landscape.