Chewy reports sales in line with expectations

·Reporter

Updated Thu, Jul 18, 2019, 1:22 PM

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Chewy (CHWY) reported sales that were roughly in line with expectations in its first earnings report since hitting the public market.

Here’s a breakdown of Chewy’s fiscal first quarter, based on the company’s previously released preliminary results:

Net sales: $1.1 billion vs. $1.1 billion expected
Loss per share: 8 cents vs. 7 cents expected
Adj. EBITDA loss: $15.8 million vs. $15.9 million expected

“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,” CEO Sumit Singh said in a statement.

“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,” he added.

Ellie the Havanese dog is seen outside the New York Stock Exchange (NYSE) ahead of the IPO for Chewy Inc. in New York City, U.S., June 14, 2019. REUTERS/Andrew Kelly — A dog is seen outside the New York Stock Exchange (NYSE) ahead of the IPO for Chewy Inc. in New York City, U.S., June 14, 2019. REUTERS/Andrew Kelly

Looking ahead to the fiscal second quarter, Chewy expects net sales between $1.12 billion to $1.14 billion. The company boosted its sales outlook for the year and now expects between $4.675 billion to $4.750 billion, up from the previously anticipated $4.65 billion.

"The pet care business has seen twice the percentage growth of GDP in the U.S. since 2007, and data like the earnings from Chewy are a strong signal that the accelerating trend will continue,” Simeon Hyman, global investment strategist at ProShares, said in an email to Yahoo Finance. “It's fascinating to see these strong results fresh on the heels of Amazon Prime Day, since Chewy represents the 'Amazon-ification' of pet care retail, as consumers shift their purchases from in-store to online."

One of the main concerns among investors and analysts has been competition from Amazon. Competitive pricing from the e-commerce giant forced Chewy to offer promotions aggressively, cutting into profits. The road to profitability remains an area of focus for investors.

Chewy stock has been on a tear since its IPO in June, jumping more than 40%.

The earnings conference call with management kicks off at 5 p.m. ET.

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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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