The Surprising Success of Chewy: A Pet Supply Retailer on the Rise
Chewy, a pet supply retailer, surprised analysts with a strong fourth-quarter performance, leading to a surge in share prices of up to 13%. The company’s net income was $22.2 million, which was a 20% increase year over year and a shock to analysts, who had expected a $10.6 million loss. Sales for the quarter were $2.78 billion, a 14% increase over the same period last year. Although the company experienced a slight dip in active customers, sales per active customer increased by nearly 15%.
International Expansion Beginning in Canada
Chewy is preparing for international expansion in Canada, starting next quarter. While analysts have high expectations for this expansion, the company expects full-year sales of $11.15 billion to $11.35 billion for 2021. This falls within the range of analyst estimates of $11.28 billion. Chewy’s performance has impressed investors, and many are confident in the company’s ability to continue to grow.
Emphasis on E-commerce and Personalization
The success of Chewy and other online retailers can be attributed, in part, to shifting consumer preferences towards e-commerce. Online pet supply sales grew 35% between 2015 and 2020, and this trend is expected to continue. As Chewy works to distinguish itself from traditional brick-and-mortar retailers, it is focusing on personalization as a key area of differentiation. The company has developed algorithms that provide tailored recommendations for customers based on their shopping behavior, and this has helped increase sales per customer.
Another area of focus for Chewy is autoship, the subscription service that provides customers with regular deliveries of pet food and supplies. Chewy offers discounts to customers who enroll in the program, and this has helped build customer loyalty. Autodelivery services are a growing trend in online retail, as businesses recognize the value of creating predictable revenue streams and repeat customers.
The Pandemic’s Effect on Pet Retailers
The COVID-19 pandemic has accelerated the shift towards e-commerce in pet retail. As pet owners spend more time at home with their animals, they are looking for convenient ways to purchase supplies. In-store shopping has become less desirable, and many consumers have turned to online retailers for their pet supply needs.
In addition to the shift to e-commerce, the pandemic has also led to an increase in pet adoptions. Families have adopted pets in record numbers, giving Chewy and other pet supply retailers a new, expanding customer base. With more pets comes the need for more food, toys, and other supplies, which has boosted sales for pet retailers.
Summary
In summary, Chewy’s impressive fourth-quarter performance, strong full-year outlook, and impending international expansion have impressed investors and analysts alike. The company’s emphasis on e-commerce, personalization, and subscription services have set it apart in the crowded pet retail space. The shift towards e-commerce, as well as an increase in pet adoptions, has helped boost sales for pet retailers like Chewy. With a focus on meeting customer needs and providing value, Chewy is well positioned for continued growth in the years to come.
—————————————————-
| Article | Link |
|---|---|
| UK Artful Impressions | Premiere Etsy Store |
| Sponsored Content | View |
| 90’s Rock Band Review | View |
| Ted Lasso’s MacBook Guide | View |
| Nature’s Secret to More Energy | View |
| Ancient Recipe for Weight Loss | View |
| MacBook Air i3 vs i5 | View |
| You Need a VPN in 2023 – Liberty Shield | View |
Shares of pet-supply retailer Chewy surged as much as 13% after posting a surprise profit and a strong full-year outlook.
The company earned $22.2 million in net income, a 20% year over year increase and a shock to analysts, who had expected a $10.6 million loss. Its $2.78 billion in sales were a 14% improvement over the same quarter last year.
A 0.9% decline in active customers to 20.4 million was more than offset by a nearly 15% increase in sales per active customer.
Chewy, which will begin its international expansion in Canada next quarter, expects full-year sales of $11.15 billion to $11.35 billion, within analyst estimates of $11.28 billion.
https://www.ft.com/content/9560d5e5-91f6-420b-b032-81a83ceb8982
—————————————————-