Chewy grows sales, new customers in Q3

Pet product company Chewy posted strong results for Q3 2021 as the pet industry continues to grow amid the pandemic.
Zachary Russell
Associate Editor
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Chewy, a producer of pet items, supplies, treats and more with a large portfolio of own brand products, including a recent dip into fresh pet foods, has shared its Q3 results from this year. The company saw a substantial growth in net sales. Earlier this year, Chewy hired a new head of marketing to lead the company’s private brand strategy.

​​“Demand and consumer engagement remained strong through the third quarter, with net sales up 24% year-over-year, or 86% on a two-year stack basis,” said Sumit Singh, CEO of Chewy. “Our sustained growth this year shows the soundness of our growth strategy, the uniqueness of Chewy’s value proposition, and the durability of the pet category. At the same time, our third-quarter profitability reflects the impact of ongoing supply chain disruptions, labor shortages, and higher inflation. As we work through these macro uncertainties, we remain squarely focused on the long term and on building an enduring franchise to serve millions of loyal pets, pet parents, and partners.”

Net sales of $2.21 billion grew 24.1% year-over-year, while gross margin of 26.4% expanded 90 basis points year-over-year. In Q3, net loss was $32.2 million, including share-based compensation expense of $19.1 million. Adjusted EBITDA was $6.0 million, an increase of 9.9% year-over-year.

“We ended Q3 with 20.4 million customers, a year-over-year increase of 15%,” added Singh. “The strength and quality of our new and active customers continues to improve. The average Chewy order for new customers was 6% and 13% higher than Q3 2020 and Q3 2019 respectively.”

In Q3, Chewy reported that its health services sector grew, expanding online services. Access to the Connect with a Vet tele-health service was expanded to the entire customer base, and any new-to-Chewy customers. Chewy also announced the release of a new pet insurance and wellness plan system beginning next spring.

“Since its inception, the mission of Chewy Health has been making pet care more accessible and more affordable, and these insurance and wellness plans were designed to do both,” said Singh. “We will share more details on future earnings calls.”