Chewy, Inc. CHWY reported solid fourth-quarter fiscal 2024 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.

The company delivered top-line growth that exceeded the high-end of its net sales guidance. Its strong performance was driven by robust active customer growth and high Autoship customer loyalty.

CHWY’s Quarterly Performance: Key Metrics and Insights

Chewy posted adjusted earnings of 28 cents per share, which beat the Zacks Consensus Estimate of 21 cents. The figure increased 55.6% from the prior-year period.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Chewy Price, Consensus and EPS Surprise

Chewy price-consensus-eps-surprise-chart | Chewy Quote

The company reported net sales of $3,247.4 million, surpassing the Zacks Consensus Estimate of $3,196 million. The figure increased 14.9% from $2,825.9 million posted in the year-ago period.

Chewy’s gross profit increased 16% year over year to $926 million. The gross margin expanded 30 basis points (bps) to 28.5% compared with 28.2% in the fourth quarter of fiscal 2023.

SG&A expenses rose 11.9% year over year to $700.7 million in the quarter. As a percentage of net sales, SG&A expenses decreased 60 bps year over year to 21.6%.

The adjusted EBITDA was $124.5 million, an increase from $86.5 million reported in the year-ago quarter. The adjusted EBITDA margin increased 70 bps year over year to 3.8%.

CHWY’s Financial Health Snapshot

Chewy exited the quarter with cash and cash equivalents of $595.8 million and total shareholders’ equity of $261.5 million.

During the fiscal fourth quarter, net cash provided by operating activities totaled $207.5 million, while free cash flow was reported at $156.6 million.

What to Expect From CHWY in the Future?

For the first quarter of fiscal 2025, management projects net sales between $3.06 billion and $3.09 billion, reflecting 6-7% growth year over year. Adjusted earnings are expected to be between 30 cents and 35 cents per share.

For fiscal 2025, Chewy anticipates net sales between $12.30 billion and $12.45 billion, indicating a 6-7% year-over-year increase. The company expects an adjusted EBITDA margin of 5.4-5.7%, up from 4.8% reported in fiscal 2024.

This Zacks Rank #2 (Buy) stock has gained 12.2% in the past six months compared with the industry’s growth of 10.1%.

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Other Stocks to Consider

Central Garden & Pet CENT, one of the leading companies in the U.S. pet supplies and lawn and garden supplies space, sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Central Garden delivered a trailing four-quarter earnings surprise of 208.7%, on average. The Zacks Consensus Estimate for CENT’s current year sales and earnings indicates increases of 1% and 10.8%, respectively, from the year-ago period’s reported levels.

Sprouts Farmers SFM, which is engaged in the retailing of fresh, natural and organic food products, currently carries a Zacks Rank #2. SFM delivered a trailing four-quarter earnings surprise of 15.1%, on average.

The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings implies growth of 11.9% and 24.3%, respectively, from the year-ago reported numbers.

Farmer Bros. Co. FARM engages in the roasting, wholesale, equipment servicing and distribution of coffee, tea and other allied products in the United States. It currently holds a Zacks Rank #2. FARM delivered a trailing four-quarter earnings surprise of 34.9%, on average.

The Zacks Consensus Estimate for Farmer Bros.’ current financial-year sales and earnings implies growth of 3.3% and 25%, respectively, from the year-ago period’s reported figures.

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This article originally published on Zacks Investment Research (zacks.com).

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