Chewy CEO Sees Extended Sales Boom With Shoppers Stuck at Home
Chewy CEO Sees Extended Sales Boom With Shoppers Stuck at Home
(Bloomberg) -- Chewy Inc. is seeing a surge in online sales as new pet owners and existing customers stock up on supplies during the coronavirus pandemic.
“Our shop-at-home pet supply business is proving resilient to economic disruption, Chief Executive Officer Sumit Singh said in an interview. “As consumers have stayed at home as part of social distancing efforts, they’ve shifted their shopping habits.”
The company expects first-quarter net sales to be between $1.5 and $1.52 billion, topping the average analyst estimate for $1.44 billion. The quarter began Feb. 3 and the forecast reflects “elevated order volumes since late February as existing customers stock up and a meaningful number of new customers migrate to our website,” Singh said.
Chewy has cautioned that delivery times are running considerably longer than usual on food and supplies with many customers waiting between seven and 10 days for their orders to arrive. The company is seeing a “healthy mix of both” new and existing customers placing orders with 13.5 million active users in the fourth quarter.
“We have not seen any material disruptions to our supply chain,” Singh said. Some products have been out of stock, but customers have been able to find alternatives, he said.
Shares of the Dania Beach, Florida-based company had risen 21% this year through Thursday’s session as investors bet the pandemic will boost demand. The stock slid 2% in extended trading after the earnings report.
Chewy reported fourth-quarter sales of $1.35 billion, a 35% increase compared to the year prior, but lower than analyst expectations for $1.38 billion. The company saw a 6.3% increase in the number of active customers in the fourth quarter compared to the third quarter. Average spending per customer was $360.
“I certainly believe we are recession resistant,” Singh said. “We actually have seen categories such as leashes, collars, bowls and toys being in high demand as people bring more animals home,” he said.
©2020 Bloomberg L.P.