Chewy registers first $1B quarter
Pet owners seem to have a new best friend. Chewy reported several milestones driven by at-home pandemic shopping during its first-quarter 2020 earnings call.
For one, net sales grew by 46% year over year in the quarter, hitting $1.62 billion — the first time in the company’s history its quarterly sales surpassed $1 billion in a quarter. The online pet retailer’s gross margin was up 23.4% in the quarter, expanding by 50 basis points, year over year.
"In addition to the scale benefits from overall revenue growth, our private label business contributed 60 basis points to the year-over-year expansion of gross margin points," Chewy CEO Sumit Singh said during the call.
He added that private brands offered attractive price points and showed “strong year-over-year gains.”
Other milestones in the first quarter: Chewy registered its first-ever positive quarter with adjusted EBITDA, reaching $3.4 million, up 122% over the prior-year period. The quarter also demonstrated the fastest new customer acquisition growth in the company’s history, adding 1.6 million new active customers in the quarter, adding to a total of 3.7 million new users, year over year. The total users is more than 15 million.
“We are proud to be the e-tailer of choice for millions of new and existing pet parents during this unprecedented time," Singh said. "Chewy is well-positioned to thrive in this expanded marketplace, and we remain focused, as always, on our mission of becoming the most trusted and convenient online destination for pet parents (and partners) everywhere.”
Looking closer at the new customers behaviors, before and after the onset of the pandemic, Chewy noted their orders after the pandemic started were 11% higher than in the period before. At the same time, a higher percentage of those new customers returned for follow up orders during the post-COVID period, and those orders were 5% higher than pre-pandemic customers.