Chewy delivered its first earnings report as a public company a week ago and it seems like a mixed bag of results when it comes to those in the pet industry.
Let’s go over a few of the numbers and what they may mean in layman’s terms.
Chewy Q2 Finances
An increase in net sales by $1.15 billion, a 43% increase YOY.
An increase in active customers to 12 million, a 39% increase YOY.
An increase in net sales per active customer to $352, a 10% increase YOY.
An increase in autoshop sales to $800 million, a 48% increase YOY.
Net loss of $82.9 million.
Chewy stock was initially offered at $22 per share and opened on the Nasdaq exchange at $36, and climbed to over $41 in its first day of trading. But it has since seen its fortunes decline and currently trades at around $30 a stub.
Marketing spending per new customer acquisition is up from $68 in 2017 to $148 this year.
So, what to make of all of this and what does it mean for pet stores and their owners?
Chewy is still hunting for profitability, but since they are owned by PetSmart which has seen a decline in retail sales in recent years, Chewy will continue to be propped up until they find profitability. The numbers for Chewy are perhaps not where they would like to be yet, but they remain promising for the ecommerce giant. To independent pet store owners, a net loss of nearly $83 million sounds unfathomable and almost like a death sentence - but for a company as big as Chewy it is clearly not as big of a deal.
Slowing growth rates and increased marketing spending are not extremely alarming for investors in Chewy, but they shouldn’t be mocked by independent pet store owners. Chewy is a competitor in your space, and they are facing steep competition in their own massive space from the RetailKiller (Amazon) and the other larger retailers that continue to adapt to the ecommerce landscape (Target and Walmart).
Nonetheless, independent pet stores still retain a large customer base within the pet industry and our team here at Pet Engine Marketing encourage you to build on the loyalty of your customers and begin offering new services beyond retail sales within your store if you haven’t already. It is critical to offer things that ecommerce can’t touch: connection, experience, in-person services, events, and more. We can help you with that, let’s get in touch!
For now, we’ll keep an eye on this space and you’ll hear from us if anything changes!
To learn a bit more, check out a few of these articles.