Chewy continues to add more customers, ‘but below the record levels we saw last year’
Chewy Inc. shares dropped almost 10% in after-hours trading Wednesday after the specialty retailer posted a wider-than-expected loss for its second quarter and had slightly fewer active customers than Wall Street expected.
Chewy CHWY, -3.23% said it lost $17 million, or 4 cents a share, in the quarter, compared with a loss of $33 million, or 8 cents a share, in the year-ago quarter. FactSet consensus called for a quarterly loss of 2 cents a share.
Sales rose 27% to $2.16 billion, from $1.70 billion a year ago, and were in line with expectations and with the company’s guidance.
Chewy, which sells a variety of pet products, said it ended the quarter with 20.1 million active customers, 21% more year-on-year. The analysts polled by FactSet expected the company to end the quarter with 20.4 million active customers.
The company has added more customers than before the pandemic, “but below the record levels we saw last year during the peak of pandemic-driven lockdowns,” Chewy said.
“Our business remains healthy, customer engagement continues to grow, and we are confident in our ability to build upon the strong results we delivered last year while navigating the uncertain market conditions due to the ever-evolving COVID-19 pandemic,” the company said in a letter to shareholders.
Chewy in June swung to a surprise quarterly profit but warned it was facing labor shortages and supply problems that led it to run out of some items.
It continued to run into problems with out-of-stock items, but the situation has improved “modestly,” the company said.
“This is the result of supply chain conditions improving in some areas as certain vendors reduce backlogs,” Chewy said. “However, other areas like wet dog food are still being affected by industry-wide production capacity limitations.”
Chewy guided for third-quarter sales between $2.20 billion and $2.22 billion. For fiscal 2021, the company kept its guidance of sales between $8.9 billion and $9 billion. Conditions around the pandemic remain “unpredictable,” it said.
Chewy stock ended the extended session Wednesday down 9.7%, and has fallen nearly 3% so far this year, contrasting with gains of around 21% for the S&P 500 index SPX, -0.03%.
