Chewy, Inc. CHWY reported a lower than expected loss per share for the third quarter of fiscal 2021. Although net sales are at Zacks’ consensus estimate, the measure has increased year over year due to higher demand and strong consumer engagement. Results from growing active CHWY customers. Sales to autoship customers were also strong.
During the quarter, management witnessed the impacts of supply chain disruptions, labor shortages and inflation. This currently ranked 5 (strong sell) stock from Zacks has fallen 23.5% in the past three months, more than the industry’s 5.3% decline.
Highlights of the 3rd quarter
Chewy reported a loss of 8 cents a share, narrower than Zacks’ consensus estimate of a loss of 10 cents. Net income was in line with the loss per share for the quarter last year.
Net sales were $ 2,212.2 million, which is in line with Zacks’ consensus estimate. Revenue increased 24.1% year-over-year driven by the strength of the companion animal category as well as gains from strategic efforts and the business model. In addition, customer demand and engagement such as site traffic, customer acquisition, order volume, size, frequency of purchase and net sales per active customer has been strong. throughout the quarter.
Autoship customer sales as a sales rate increased 140 basis points (bps) to 70.6%. CHWY ended the quarter with 20.4 million customers, reflecting 15% year-over-year growth.
Gross profit increased 28.6% to $ 584.8 million in the quarter. Gross margin increased 90 basis points to 26.4% on higher sales.
Adjusted EBITDA was $ 6 million, an improvement of 9.9% from the level for the same quarter last year. In addition, the adjusted EBITDA margin stood at 0.3%, stable year over year.
Chewy ended the quarter with cash and cash equivalents of $ 726.9 million, accounts receivable of $ 128.7 million and inventory worth $ 606.6 million. As of October 31, 2021, the total equity deficit was $ 66 million.
In the third fiscal quarter, CHWY’s free cash flow was $ 2.3 million and capital expenditures were $ 72 million.
In the nine months of fiscal 2021, free cash flow from operating activities was $ 257.8 million compared to $ 55.3 million from net cash flow from operating activities. operating at the end of the financial year of the previous financial year.
Management expects net sales for the fiscal fourth quarter to be between $ 2.40 billion and $ 2.44 billion, indicating 17-19% growth over last year’s quarterly figure .
For fiscal 2021, net sales are expected to be in the $ 8.90 billion to $ 8.94 billion range, reflecting a 25% increase from the last fiscal level.
Hot stocks to consider
Some higher ranked actions are Pop ingredients MGPI, Hain’s Celestial Group HAIN and The JM Smucker Company. SJM.
MGP Ingredients, the producer and supplier of distilled spirits, specialty wheat protein and starch-based food ingredients, currently has a Zacks # 1 (strong buy) rating. MGPI shares have risen 34.8% in the past three months. You can see The full list of today’s Zacks # 1 Rank stocks here.
Zacks ‘Consensus Estimate for MGP Ingredients’ Current Year Sales and EPS suggest growth of 55.5% and 61.4%, respectively, from the corresponding period of the year figures. former. MGPI has a surprise profit over the last four quarters of 117.6%, on average.
The Hain Celestial, which supplies a variety of natural and organic foods as well as personal care products in North America and Europe, currently carries a Zacks Rank # 2 (Buy). HAIN shares have risen 5.9% in the past three months.
Zacks’ consensus estimate for The Hain Celestial’s current year EPS suggests growth of 14.5% from the number reported in the previous year. HAIN has a surprise profit for the last four quarters of 9.7%, on average.
JM Smucker, a renowned distributor and manufacturer of consumer food and beverage products, currently holds a Zacks ranking of 2. SJM has a surprise of 10.8% on average over the past four quarters. The stock has gained 6.4% in the past three months.
Zacks’ consensus estimate for JM Smucker’s current year sales suggests growth of 0.1% from the figure released last year. SJM has an expected EPS growth rate of 1.2% over three to five years.
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