Chewy, Inc. (NYSE: CHWY) (“Chewy”), a trusted online destination
for pet parents, has released its financial results for the first
quarter of fiscal year 2019 ended May 5, 2019, and posted a letter
to its shareholders on its investor relations website at
https://investor.chewy.com.
Fiscal Q1 2019 Highlights:
- Net sales grew 45.2 percent year-over-year to $1.1 billion
- Gross margin of 22.9 percent improved 330 basis points
year-over-year
- Net loss of $29.6 million improved 50.6 percent
year-over-year
- Adjusted EBITDA(1) loss of $15.8 million improved 69.4 percent
year-over-year
- Adjusted EBITDA margin(1) of (1.4) percent improved 530 basis
points year-over-year
“We are pleased to report strong first quarter 2019 results as a
newly public company with net sales growing 45 percent
year-over-year, and gross margin increasing 330 basis points
year-over-year,” said Sumit Singh, Chief Executive Officer of
Chewy. “We will continue to innovate with a keen focus on
delivering the best customer experience as we execute on our
mission to become the most trusted and convenient online
destination for pet parents.”
Chewy intends to make future announcements of material financial
and other information through its investor relations website. Chewy
will also, from time to time, disclose this information through
press releases, filings with the Securities and Exchange
Commission, conference calls or webcasts, as required by applicable
law.
Management will host a conference call and webcast to discuss
Chewy's financial results today at 5:00 pm ET.
Chewy Fiscal First Quarter 2019 Financial Results Conference
Call When: Thursday, July 18, 2019 Time: 5:00 pm ET
Conference ID: 8297103 Live Call: (866) 211-4125
(US/Canada Toll-Free) or (647) 689-6728 (International)
Replay: (800) 585-8367 (US/Canada Toll-Free) or (416)
621-4642 (International) (The replay will be available
approximately two hours after the completion of the live call until
11:59 pm ET on July 25, 2019.) Webcast:
https://investor.chewy.com
(1) Adjusted EBITDA and adjusted EBITDA margin are non-GAAP
financial measures. See “Non-GAAP Financial Measures” for
additional information on non-GAAP financial measures and a
reconciliation to the most comparable GAAP measures.
About Chewy
Our mission is to be the most trusted and convenient online
destination for pet parents everywhere. We believe that we are the
preeminent online source for pet products, supplies and
prescriptions as a result of our broad selection of high-quality
products, which we offer at competitive prices and deliver with an
exceptional level of care and a personal touch. We continually
develop innovative ways for our customers to engage with us, and
partner with more than 1,600 of the best and most trusted brands in
the pet industry to bring a high-bar, customer-centric experience
to our customers.
Forward-Looking
Statements
This communication contains forward-looking statements about us
and our industry that involve substantial risks and uncertainties.
All statements other than statements of historical facts contained
in this communication, including statements regarding our future
results of operations or financial condition, business strategy and
plans and objectives of management for future operations, are
forward-looking statements. In some cases, you can identify
forward-looking statements because they contain words such as
“anticipate,” “believe,” “contemplate,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “should,” “target,” “will” or “would” or the
negative of these words or other similar terms or expressions.
These forward-looking statements include, but are not limited to,
statements concerning our ability to: sustain our recent growth
rates and manage our growth effectively; acquire new customers in a
cost-effective manner and increase our net sales per active
customer; accurately predict economic conditions and their impact
on consumer spending patterns, particularly in the pet products
market, and accurately forecast net sales and appropriately plan
our expenses in the future; introduce new products or offerings and
improve existing products; successfully compete in the pet products
and services retail industry, especially in the e-commerce sector;
source additional, or strengthen our existing relationships with,
suppliers; negotiate acceptable pricing and other terms with
third-party service providers, suppliers and outsourcing partners
and maintain our relationships with such entities; optimize,
operate and manage the expansion of the capacity of our fulfillment
centers; provide our customers with a cost-effective platform that
is able to respond and adapt to rapid changes in technology;
maintain adequate cybersecurity with respect to our systems and
ensure that our third-party service providers do the same with
respect to their systems; successfully manufacture and sell our own
private brand products; maintain consumer confidence in the safety
and quality of our vendor-supplied and private brand food products
and hardgood products; comply with existing or future laws and
regulations in a cost-efficient manner; attract, develop, motivate
and retain well-qualified employees; and adequately protect our
intellectual property rights and successfully defend ourselves
against any intellectual property infringement claims or other
allegations that we may be subject to.
You should not rely on forward-looking statements as predictions
of future events. We have based the forward-looking statements
contained in this communication primarily on our current
expectations and projections about future events and trends that we
believe may affect our business, financial condition, and results
of operations. The outcome of the events described in these
forward-looking statements is subject to risks, uncertainties and
other factors described in our filings with the Securities and
Exchange Commission and elsewhere in this communication. Moreover,
we operate in a very competitive and rapidly changing environment.
New risks and uncertainties emerge from time to time, and it is not
possible for us to predict all risks and uncertainties that could
have an impact on the forward-looking statements contained in this
communication. The results, events and circumstances reflected in
the forward-looking statements may not be achieved or occur, and
actual results, events or circumstances could differ materially
from those described in the forward-looking statements. In
addition, statements that “we believe” and similar statements
reflect our beliefs and opinions on the relevant subject. These
statements are based on information available to us as of the date
of this communication. While we believe that information provides a
reasonable basis for these statements, that information may be
limited or incomplete. Our statements should not be read to
indicate that we have conducted an exhaustive inquiry into, or
review of, all relevant information. These statements are
inherently uncertain, and investors are cautioned not to unduly
rely on these statements. The forward-looking statements made in
this communication relate only to events as of the date on which
the statements are made. We undertake no obligation to update any
forward-looking statements made in this communication to reflect
events or circumstances after the date of this communication or to
reflect new information or the occurrence of unanticipated events,
except as required by law. We may not actually achieve the plans,
intentions or expectations disclosed in our forward-looking
statements, and you should not place undue reliance on our
forward-looking statements. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers,
dispositions, joint ventures or investments.
Non-GAAP Financial
Measures
To provide investors with additional information regarding our
financial results, we have disclose adjusted EBITDA, a non-GAAP
financial measure that we calculate as net loss excluding
depreciation and amortization; share-based compensation expense;
income tax provision; interest income (expense), net; management
fee expense; and non-routine items. We have provided a
reconciliation below of adjusted EBITDA to net loss, the most
directly comparable GAAP financial measure.
We include adjusted EBITDA because it is a key measure used by
our management and board of directors to evaluate our operating
performance, generate future operating plans and make strategic
decisions regarding the allocation of capital. In particular, the
exclusion of certain expenses in calculating adjusted EBITDA
facilitates operating performance comparability across reporting
periods by removing the effect of non-cash expenses and certain
variable charges. Accordingly, we believe that adjusted EBITDA
provides useful information to investors and others in
understanding and evaluating our operating results in the same
manner as our management and board of directors.
We believe it is useful to exclude non-cash charges, such as
depreciation and amortization, share-based compensation expense and
management fee expense from our adjusted EBITDA because the amount
of such expenses in any specific period may not directly correlate
to the underlying performance of our business operations. We
believe it is useful to exclude income tax provision; interest
income (expense), net; and non-routine items as these items are not
components of our core business operations. Adjusted EBITDA has
limitations as a financial measure and you should not consider it
in isolation or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are:
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future and adjusted EBITDA does not reflect capital
expenditure requirements for such replacements or for new capital
expenditures;
- adjusted EBITDA does not reflect share-based compensation and
related taxes. Share-based compensation has been, and will continue
to be for the foreseeable future, a recurring expense in our
business and an important part of our compensation strategy;
- adjusted EBITDA does not reflect interest income (expense),
net; or changes in, or cash requirements for, our working
capital;
- adjusted EBITDA excludes one-time, non-routine items; and
- other companies, including companies in our industry, may
calculate Adjusted EBITDA differently, which reduces its usefulness
as a comparative measure.
Because of these limitations, you should consider adjusted
EBITDA and adjusted EBITDA margin alongside other financial
performance measures, including various cash flow metrics, net loss
and our other GAAP results.
The following table presents a reconciliation of net loss to
adjusted EBITDA for each of the periods indicated.
($ in thousands, except percentages)
13 Weeks
Ended Reconciliation of Net Loss to Adjusted EBITDA
May 5, 2019 April 29, 2018 Net loss
$ (29,554)
$ (59,815)
Add (deduct): Depreciation and amortization
6,949
4,718
Share-based compensation expense
7,230
3,273
Income tax provision — — Interest income, net
(716)
(10)
Management fee expense(1)
325
325
Adjusted EBITDA
$ (15,766)
$ (51,509)
Net sales
$ 1,108,872
$ 763,462
Adjusted EBITDA margin
(1.4)%
(6.7)%
(1) Management fee expense
allocated to us by PetSmart for organizational oversight and
certain limited
corporate functions. Although we
are not a party to the agreement governing the management fee,
this
management fee is reflected as an
expense in our condensed consolidated financial statements.
We define adjusted EBITDA margin as adjusted EBITDA divided by
net sales.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190718005794/en/
Media Contact: Kim Hughes MediaInquiries@chewy.com
Investor Contact: Kelsey Turcotte ir@chewy.com
Chewy (NYSE:CHWY)
Historical Stock Chart
From Mar 2024 to Apr 2024
Chewy (NYSE:CHWY)
Historical Stock Chart
From Apr 2023 to Apr 2024