What's Driving the Stellar Growth at Chewy?
Chewy's (NYSE: CHWY) fiscal third-quarter earnings report from earlier this month showed the company grew net sales by a blistering 40%, while margins expanded once again. Net sales beat management's guidance for the quarter, and management raised its revenue expectations for the full year. The company's core pet food and supplies business remains on fire, driving the bulk of that growth, but Chewy is also seeing a boost from its rapidly growing private brands and pharmacy businesses.
Chewy reported active customers of 12.7 million at the end of the quarter, up 33% year over year. Active customers include shoppers who have placed an order within the last year. Chewy is growing this active base quickly by both retaining its existing customers and attracting new ones.
As far as keeping existing customers, the company's IPO filing stated that its net sales would have grown 20% in 2018 only accounting for sales growth from its active customer base entering the year. In other words, even if Chewy hadn't attracted any new customers during the year, its sales still would have grown 20% from its existing customers spending more.
Source Fool.com
