Chewy, Inc. ($CHWY) Earnings (Q2 FY22)

 Chewy, Inc. ($CHWY) Earnings and Opinion:


Chewy is a company in the Consumer Cyclical sector and operates in the Internet Retail industry. The company engages in the pure play e-commerce business in the United States. Chewy was founded in 2010 and is currently headquartered in Dania Beach, Florida. The company made its debut on the stock market in June of 2019.

Chewy Earnings Results:

  • Revenues of $2.43B missing expectations of $2.45B
  • Gross Profit of $683M beating expectations of $659M
  • Adjusted EBITDA of $83M beating expectations of of $14M
  • EPS of $0.05 beating expectations of -$0.10
  • Cash from operations of $49M missing expectations of $101M
  • Revenue guidance missed estimates for both Q3 and FY
Opinion:
Chewy is currently falling by more than 10%, after they reported earnings after the closing bell. The company had a mixed earnings report with Topline misses. The thing that sticks out is the profit metrics. The EPS were positive, while expectations still had it in the negative. Also, the EBITDA beat by 493%, which is a huge beat and a good sign for profitability. Revenues had a tiny miss, but this is a continued trends with retailers. Active customers fell off a little bit, but sales per active customer went up a slight bit. Guidance shows a little bit of a struggle continuing into the second half of the fiscal year. However, I think with economic struggles slowing down a bit, profitability is becoming more achievable. As far as valuation goes, the P/S ratio is at 1.35, which is a solid number. Growth looks pretty promising for a retail business. Current ratio is a little worry-some at 0.82. However cash outweighs debt right now. In my opinion, this is a pretty solid business model. I think more success is to come with it as it makes it more convenient for pet owners. It will be a company that will be around for awhile. I think it is still a little overvalued right now, but the financials sit in a decent position. I am going to pass on Chewy for now, but I will be keeping an eye out for them to see how they perform over the next couple years.


*Information from Yahoo Finance, CMLVIZ, Consensus Gurus, Motley Fool

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