Chewy, Inc. (NYSE: CHWY) (“Chewy”), a trusted destination for
pet parents and partners everywhere, has released its financial
results for the third quarter of fiscal year 2024 ended October 27,
2024.
Fiscal Q3 2024 Highlights:
- Net sales of $2.88 billion increased 4.8 percent year over
year
- Gross margin of 29.3 percent increased 80 basis points year
over year
- Net income of $3.9 million, including share-based compensation
expense and related taxes of $80.4 million
- Net margin of 0.1 percent increased 140 basis points year over
year
- Basic and diluted earnings per share of $0.01, an increase of
$0.09 year over year
- Adjusted EBITDA(1) of $138.2 million, an increase of $55.7
million year over year
- Adjusted EBITDA margin(1) of 4.8 percent increased 180 basis
points year over year
- Adjusted net income(1) of $84.9 million, an increase of $21.5
million year over year
- Adjusted basic and diluted earnings per share(1) of $0.20, an
increase of $0.05 year over year
“Our third quarter results continued to build on the positive
momentum we observed in Q2,” said Sumit Singh, Chief Executive
Officer of Chewy. “We delivered topline growth exceeding the
high-end of our net sales guidance range, a sequential increase in
active customers, continued adjusted EBITDA margin expansion, and
robust free cash flow generation. These results underscore the
durability of our business model, and our team’s relentless focus
on high-quality execution and operational discipline.”
Management will host a conference call and webcast to discuss
Chewy's financial results today at 8:00 am ET.
Chewy Fiscal Third Quarter 2024 Financial Results Conference
Call When: Wednesday, December 4, 2024 Time: 8:00
am ET Live webcast and replay: https://investor.chewy.com
Conference call registration:
https://www.netroadshow.com/events/login?show=4d7c8222&confId=72627
(1)
Adjusted EBITDA, adjusted EBITDA margin,
adjusted net income, and adjusted basic and diluted earnings per
share are non-GAAP financial measures. See “Non-GAAP Financial
Measures” for additional information on non-GAAP financial measures
and a reconciliation to the most comparable GAAP measures.
About Chewy
Our mission is to be the most trusted and convenient destination
for pet parents and partners everywhere. We believe that we are the
preeminent online source for pet products, supplies, and
prescriptions as a result of our broad selection of high-quality
products and services, which we offer at competitive prices and
deliver with an exceptional level of care and a personal touch to
build brand loyalty and drive repeat purchasing. We seek to
continually develop innovative ways for our customers to engage
with us, as our websites and mobile applications allow our pet
parents to manage their pets’ health, wellness, and merchandise
needs, while enabling them to conveniently shop for our products.
We partner with approximately 3,500 of the best and most trusted
brands in the pet industry, and we create and offer our own private
brands. Through our websites and mobile applications, we offer our
customers approximately 115,000 products and services offerings, to
bring what we believe is a high-bar, customer-centric experience to
our customers.
Forward-Looking
Statements
This communication contains forward-looking statements about us
and our industry that involve substantial risks and uncertainties.
All statements other than statements of historical facts contained
in this communication, including statements regarding our share
repurchase program, our future results of operations or financial
condition, business strategy and plans and objectives of management
for future operations, are forward-looking statements.
In some cases, you can identify forward-looking statements
because they contain words such as “anticipate,” “believe,”
“contemplate,” “continue,” “could,” “estimate,” “expect,”
“forecast,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” “seek,” “should,” “target,” “will” or “would” or the
negative of these words or other similar terms or expressions.
Although we believe that these forward-looking statements are based
on reasonable assumptions, you should be aware that many factors
could cause actual results to differ materially from those in such
forward-looking statements, including but not limited to, our
ability to: sustain our recent growth rates and successfully manage
challenges to our future growth, including introducing new products
or services, improving existing products and services, and
expanding into new jurisdictions and offerings; successfully
respond to business disruptions; successfully manage risks related
to the macroeconomic environment, including any adverse impacts on
our business operations, financial performance, supply chain,
workforce, facilities, customer services and operations; acquire
and retain new customers in a cost-effective manner and increase
our net sales, improve margins and maintain profitability; manage
our growth effectively; maintain positive perceptions of the
Company and preserve, grow, and leverage the value of our
reputation and our brand; limit operating losses as we continue to
expand our business; forecast net sales and appropriately plan our
expenses in the future; estimating our market share; strengthen our
current supplier relationships, retain key suppliers, and source
additional suppliers; negotiate acceptable pricing and other terms
with third-party service providers, suppliers and outsourcing
partners and maintain our relationships with such parties; mitigate
changes in, or disruptions to, our shipping arrangements and
operations; optimize, operate and manage the expansion of the
capacity of our fulfillment centers; provide our customers with a
cost-effective platform that is able to respond and adapt to rapid
changes in technology; limit our losses related to online payment
methods; maintain and scale our technology, including the
reliability of our websites, mobile applications, and network
infrastructure; maintain adequate cybersecurity with respect to our
systems and retain third-party service providers that do the same
with respect to their systems; maintain consumer confidence in the
safety, quality and health of our products; limit risks associated
with our suppliers and our outsourcing partners; comply with
existing or future laws and regulations in a cost-efficient manner;
utilize net operating loss and tax credit carryforwards, and other
tax attributes; adequately protect our intellectual property
rights; successfully defend ourselves against any allegations or
claims that we may be subject to; attract, develop, motivate and
retain highly-qualified and skilled employees; respond to economic
conditions, industry trends, and market conditions, and their
impact on the pet products market; reduce merchandise returns or
refunds; respond to severe weather and limit disruption to normal
business operations; manage new acquisitions, investments or
alliances, and integrate them into our existing business;
successfully compete in new offerings; manage challenges presented
by international markets; successfully compete in the pet products
and services health and retail industry, especially in the
e-commerce sector; comply with the terms of our credit facility;
raise capital as needed; and maintain effective internal control
over financial reporting.
You should not rely on forward-looking statements as predictions
of future events, and you should understand that these statements
are not guarantees of performance or results, and our actual
results could differ materially from those expressed in the
forward-looking statements due to a variety of factors. We have
based the forward-looking statements contained in this
communication primarily on our current assumptions, expectations,
and projections about future events and trends that we believe may
affect our business, financial condition, and results of
operations. The outcome of the events described in these
forward-looking statements is subject to risks, uncertainties and
other factors described in the section titled “Risk Factors” in our
Quarterly Report on Form 10-Q for the quarterly period ended April
28, 2024, in our other filings with the Securities and Exchange
Commission, and elsewhere in this communication. Moreover, we
operate in a very competitive and rapidly changing environment. New
risks and uncertainties emerge from time to time, and it is not
possible for us to predict all risks and uncertainties that could
have an impact on the forward-looking statements contained in this
communication. The results, events and circumstances reflected in
the forward-looking statements may not be achieved or occur, and
actual results, events or circumstances could differ materially
from those described in the forward-looking statements. In
addition, statements that “we believe” and similar statements
reflect our beliefs and opinions on the relevant subject. These
statements are based on information available to us as of the date
of this communication. While we believe that such information
provides a reasonable basis for these statements, this information
may be limited or incomplete. Our statements should not be read to
indicate that we have conducted an exhaustive inquiry into, or
review of, all relevant information. These statements are
inherently uncertain, and investors are cautioned not to unduly
rely on these statements. The forward-looking statements made in
this communication relate only to events as of the date on which
the statements are made. We undertake no obligation to update any
forward-looking statements made in this communication to reflect
events or circumstances after the date of this communication or to
reflect new information or the occurrence of unanticipated events,
except as required by law. We may not actually achieve the plans,
intentions or expectations disclosed in our forward-looking
statements, and you should not place undue reliance on our
forward-looking statements. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers,
dispositions, joint ventures or investments.
CHEWY, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except share and
per share data)
As of
October 27,
2024
January 28,
2024
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$
506,634
$
602,232
Marketable securities
885
531,785
Accounts receivable
193,210
154,043
Inventories
858,551
719,273
Prepaid expenses and other current
assets
56,445
97,015
Total current assets
1,615,725
2,104,348
Property and equipment, net
527,738
521,298
Operating lease right-of-use assets
458,037
474,617
Goodwill
39,442
39,442
Deferred tax assets
275,669
—
Other non-current assets
41,286
47,146
Total assets
$
2,957,897
$
3,186,851
Liabilities and stockholders’
equity
Current liabilities:
Trade accounts payable
$
1,229,132
$
1,104,940
Accrued expenses and other current
liabilities
950,093
1,005,937
Total current liabilities
2,179,225
2,110,877
Operating lease liabilities
510,612
527,795
Other long-term liabilities
44,638
37,935
Total liabilities
2,734,475
2,676,607
Stockholders’ equity:
Preferred stock, $0.01 par value per
share, 5,000,000 shares authorized, no shares issued and
outstanding as of October 27, 2024 and January 28, 2024
—
—
Class A common stock, $0.01 par value per
share, 1,500,000,000 shares authorized, 161,522,237 and 132,913,046
shares issued and outstanding as of October 27, 2024 and January
28, 2024, respectively
1,615
1,329
Class B common stock, $0.01 par value per
share, 395,000,000 shares authorized, 246,525,803 and 298,863,356
shares issued and outstanding as of October 27, 2024 and January
28, 2024, respectively
2,465
2,989
Additional paid-in capital
1,824,384
2,481,984
Accumulated deficit
(1,605,706
)
(1,975,652
)
Accumulated other comprehensive income
(loss)
664
(406
)
Total stockholders’ equity
223,422
510,244
Total liabilities and stockholders’
equity
$
2,957,897
$
3,186,851
CHEWY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share
data)
(Unaudited)
13 Weeks Ended
39 Weeks Ended
October 27,
2024
October 29,
2023
October 27,
2024
October 29,
2023
Net sales
$
2,877,635
$
2,745,875
$
8,613,949
$
8,321,816
Cost of goods sold
2,033,762
1,964,019
6,072,248
5,958,383
Gross profit
843,873
781,856
2,541,701
2,363,433
Operating expenses:
Selling, general and administrative
626,471
612,375
1,850,299
1,816,653
Advertising and marketing
191,770
179,200
569,103
548,424
Total operating expenses
818,241
791,575
2,419,402
2,365,077
Income (loss) from operations
25,632
(9,719
)
122,299
(1,644
)
Interest income, net
3,901
10,173
31,345
27,117
Other (expense) income, net
(36
)
(34,122
)
746
(13,768
)
Income (loss) before income tax provision
(benefit)
29,497
(33,668
)
154,390
11,705
Income tax provision (benefit)
25,565
1,704
(215,556
)
4,011
Net income (loss)
$
3,932
$
(35,372
)
$
369,946
$
7,694
Comprehensive income (loss):
Net income (loss)
$
3,932
$
(35,372
)
$
369,946
$
7,694
Foreign currency translation
adjustments
317
—
1,070
—
Comprehensive income (loss)
$
4,249
$
(35,372
)
$
371,016
$
7,694
Earnings (loss) per share attributable to
common Class A and Class B stockholders:
Basic
$
0.01
$
(0.08
)
$
0.87
$
0.02
Diluted
$
0.01
$
(0.08
)
$
0.85
$
0.02
Weighted-average common shares used in
computing earnings (loss) per share:
Basic
414,361
430,758
426,203
428,743
Diluted
426,572
430,758
433,625
431,406
CHEWY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
39 Weeks Ended
October 27,
2024
October 29,
2023
Cash flows from operating activities
Net income
$
369,946
$
7,694
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
85,436
82,252
Share-based compensation expense
224,710
178,897
Non-cash lease expense
24,529
29,399
Change in fair value of equity warrants
and investments
875
13,589
Deferred income tax benefit
(275,669
)
—
Unrealized foreign currency losses,
net
1,218
—
Other
(141
)
3,810
Net change in operating assets and
liabilities:
Accounts receivable
(39,208
)
(34,436
)
Inventories
(139,454
)
(36,846
)
Prepaid expenses and other current
assets
(9,892
)
(27,346
)
Other non-current assets
2,803
(1,337
)
Trade accounts payable
124,238
48,755
Accrued expenses and other current
liabilities
40,440
140,374
Operating lease liabilities
(23,088
)
(19,805
)
Other long-term liabilities
2,066
1,664
Net cash provided by operating
activities
388,809
386,664
Cash flows from investing activities
Capital expenditures
(92,920
)
(110,902
)
Proceeds from sales and maturities of
marketable securities
538,402
750,000
Purchases of marketable securities
—
(876,189
)
Cash paid for acquisition of business, net
of cash acquired
—
(367
)
Net cash provided by (used in) investing
activities
445,482
(237,458
)
Cash flows from financing activities
Repurchases of common stock
(875,197
)
—
Income taxes paid for, net of proceeds
from, parent reorganization transaction
(53,743
)
—
Principal repayments of finance lease
obligations
(730
)
(479
)
Payments of secondary offering costs
(58
)
—
Payments for tax withholdings related to
vesting of share-based compensation awards
(13
)
(5
)
Payments for tax sharing agreement with
related parties
—
(10,279
)
Payment of debt modification costs
—
(175
)
Net cash used in financing activities
(929,741
)
(10,938
)
Effect of exchange rate changes on cash
and cash equivalents
(148
)
—
Net (decrease) increase in cash and cash
equivalents
(95,598
)
138,268
Cash and cash equivalents, as of beginning
of period
602,232
331,641
Cash and cash equivalents, as of end of
period
$
506,634
$
469,909
Key Financial and Operating
Data
We measure our business using both financial and operating data
and use the following metrics and measures to assess the near-term
and long-term performance of our overall business, including
identifying trends, formulating financial projections, making
strategic decisions, assessing operational efficiencies, and
monitoring our business.
13 Weeks Ended
39 Weeks Ended
(in thousands, except net sales per active
customer, per share data, and percentages)
October 27,
2024
October 29,
2023
% Change
October 27,
2024
October 29,
2023
% Change
Financial and Operating Data
Net sales
$
2,877,635
$
2,745,875
4.8
%
$
8,613,949
$
8,321,816
3.5
%
Net income (loss) (1)
$
3,932
$
(35,372
)
111.1
%
$
369,946
$
7,694
n/m
Net margin
0.1
%
(1.3
)%
4.3
%
0.1
%
Adjusted EBITDA (2)
$
138,245
$
82,581
67.4
%
$
446,004
$
281,601
58.4
%
Adjusted EBITDA margin (2)
4.8
%
3.0
%
5.2
%
3.4
%
Adjusted net income (2)
$
84,922
$
63,449
33.8
%
$
326,776
$
215,953
51.3
%
Earnings (loss) per share, basic (1)
$
0.01
$
(0.08
)
112.5
%
$
0.87
$
0.02
n/m
Earnings (loss) per share, diluted (1)
$
0.01
$
(0.08
)
112.5
%
$
0.85
$
0.02
n/m
Adjusted earnings per share, basic (2)
$
0.20
$
0.15
33.3
%
$
0.77
$
0.50
54.0
%
Adjusted earnings per share, diluted
(2)
$
0.20
$
0.15
33.3
%
$
0.75
$
0.50
50.0
%
Net cash provided by operating
activities
$
183,462
$
79,377
131.1
%
$
388,809
$
386,664
0.6
%
Free cash flow (2)
$
151,767
$
47,692
218.2
%
$
295,889
$
275,762
7.3
%
Active customers
20,160
20,266
(0.5
)%
20,160
20,266
(0.5
)%
Net sales per active customer
$
567
$
544
4.2
%
$
567
$
544
4.2
%
Autoship customer sales
$
2,300,928
$
2,116,458
8.7
%
$
6,775,983
$
6,334,240
7.0
%
Autoship customer sales as a percentage of
net sales
80.0
%
77.1
%
78.7
%
76.1
%
n/m - not meaningful
(1)
Includes share-based compensation expense
and related taxes of $80.4 million and $232.4 million for the
thirteen and thirty-nine weeks ended October 27, 2024, compared to
$65.8 million and $187.9 million for the thirteen and thirty-nine
weeks ended October 29, 2023.
(2)
Adjusted EBITDA, adjusted EBITDA margin,
adjusted net income, adjusted basic and diluted earnings per share,
and free cash flow are non-GAAP financial measures.
We define net margin as net income divided by net sales and
adjusted EBITDA margin as adjusted EBITDA divided by net sales.
Non-GAAP Financial
Measures
Adjusted EBITDA and Adjusted EBITDA Margin
To provide investors with additional information regarding our
financial results, we have disclosed in this earnings release
adjusted EBITDA, a non-GAAP financial measure that we calculate as
net income excluding depreciation and amortization; share-based
compensation expense and related taxes; income tax provision
(benefit); interest income (expense), net; transaction related
costs; changes in the fair value of equity warrants; severance and
exit costs; and litigation matters and other items that we do not
consider representative of our underlying operations. We have
provided a reconciliation below of adjusted EBITDA to net income,
the most directly comparable GAAP financial measure.
We have included adjusted EBITDA and adjusted EBITDA margin in
this earnings release because each is a key measure used by our
management and board of directors to evaluate our operating
performance, generate future operating plans and make strategic
decisions regarding the allocation of capital. In particular, the
exclusion of certain expenses in calculating adjusted EBITDA and
adjusted EBITDA margin facilitates operating performance
comparability across reporting periods by removing the effect of
non-cash expenses and certain variable charges. Accordingly, we
believe that adjusted EBITDA and adjusted EBITDA margin provide
useful information to investors and others in understanding and
evaluating our operating results in the same manner as our
management and board of directors.
We believe it is useful to exclude non-cash charges, such as
depreciation and amortization and share-based compensation expense
from our adjusted EBITDA because the amount of such expenses in any
specific period may not directly correlate to the underlying
performance of our business operations. We believe it is useful to
exclude income tax provision (benefit); interest income (expense),
net; transaction related costs; changes in the fair value of equity
warrants; and litigation matters and other items which are not
components of our core business operations. We believe it is useful
to exclude severance and exit costs because these expenses
represent temporary initiatives to realign resources and enhance
operational efficiency, which are not components of our core
business operations. Adjusted EBITDA has limitations as a financial
measure and you should not consider it in isolation or as a
substitute for analysis of our results as reported under GAAP. Some
of these limitations are:
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future and adjusted EBITDA does not reflect capital
expenditure requirements for such replacements or for new capital
expenditures;
- adjusted EBITDA does not reflect share-based compensation and
related taxes. Share-based compensation has been, and will continue
to be for the foreseeable future, a recurring expense in our
business and an important part of our compensation strategy;
- adjusted EBITDA does not reflect interest income (expense),
net; or changes in, or cash requirements for, our working
capital;
- adjusted EBITDA does not reflect transaction related costs and
other items which are either not representative of our underlying
operations or are incremental costs that result from an actual or
planned transaction or initiative and include changes in the fair
value of equity warrants, severance and exit costs, litigation
matters, integration consulting fees, internal salaries and wages
(to the extent the individuals are assigned full-time to
integration and transformation activities) and certain costs
related to integrating and converging IT systems; and
- other companies, including companies in our industry, may
calculate adjusted EBITDA differently, which reduces its usefulness
as a comparative measure.
Because of these limitations, you should consider adjusted
EBITDA and adjusted EBITDA margin alongside other financial
performance measures, including various cash flow metrics, net
income, net margin, and our other GAAP results.
The following table presents a reconciliation of net income
(loss) to adjusted EBITDA, as well as the calculation of net margin
and adjusted EBITDA margin, for each of the periods indicated:
(in thousands, except percentages)
13 Weeks Ended
39 Weeks Ended
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
October 27,
2024
October 29,
2023
October 27,
2024
October 29,
2023
Net income (loss)
$
3,932
$
(35,372
)
$
369,946
$
7,694
Add (deduct):
Depreciation and amortization
28,981
25,540
85,436
82,252
Share-based compensation expense and
related taxes
80,426
65,799
232,377
187,878
Interest income, net
(3,901
)
(10,173
)
(31,345
)
(27,117
)
Change in fair value of equity
warrants
564
33,800
122
13,542
Income tax provision (benefit)
25,565
1,704
(215,556
)
4,011
Exit costs
—
(778
)
—
6,839
Transaction related costs
457
1,041
928
3,167
Other
2,221
1,020
4,096
3,335
Adjusted EBITDA
$
138,245
$
82,581
$
446,004
$
281,601
Net sales
$
2,877,635
$
2,745,875
$
8,613,949
$
8,321,816
Net margin
0.1
%
(1.3
)%
4.3
%
0.1
%
Adjusted EBITDA margin
4.8
%
3.0
%
5.2
%
3.4
%
Adjusted Net Income and Adjusted Basic and Diluted Earnings per
Share
To provide investors with additional information regarding our
financial results, we have disclosed in this earnings release
adjusted net income and adjusted basic and diluted earnings per
share, which represent non-GAAP financial measures. We calculate
adjusted net income as net income excluding share-based
compensation expense and related taxes, changes in valuation
allowances associated with deferred tax assets, changes in the fair
value of equity warrants, and severance and exit costs. We
calculate adjusted basic and diluted earnings per share by dividing
adjusted net income attributable to common stockholders by the
weighted-average shares outstanding during the period. We have
provided a reconciliation below of adjusted net income to net
income , the most directly comparable GAAP financial measure.
We have included adjusted net income and adjusted basic and
diluted earnings per share in this earnings release because each is
a key measure used by our management and board of directors to
evaluate our operating performance, generate future operating plans
and make strategic decisions regarding the allocation of capital.
In particular, the exclusion of certain expenses in calculating
adjusted net income and adjusted basic and diluted earnings per
share facilitates operating performance comparability across
reporting periods by removing the effect of non-cash expenses and
certain variable gains and losses that do not represent a component
of our core business operations. We believe it is useful to exclude
non-cash share-based compensation expense because the amount of
such expenses in any specific period may not directly correlate to
the underlying performance of our business operations. We believe
it is useful to exclude changes in valuation allowances associated
with deferred tax assets as this is not a component of our core
business operations. We believe it is useful to exclude changes in
the fair value of equity warrants because the variability of equity
warrant gains and losses is not representative of our underlying
operations. We believe it is useful to exclude severance and exit
costs because these expenses represent temporary initiatives to
realign resources and enhance operational efficiency, which are not
components of our core business operations. Accordingly, we believe
that these measures provide useful information to investors and
others in understanding and evaluating our operating results in the
same manner as our management and board of directors.
Adjusted net income and adjusted basic and diluted earnings per
share have limitations as financial measures and you should not
consider them in isolation or as substitutes for analysis of our
results as reported under GAAP. Other companies may calculate
adjusted net income and adjusted basic and diluted earnings per
share differently, which reduces their usefulness as comparative
measures. Because of these limitations, you should consider
adjusted net income and adjusted basic and diluted earnings
alongside other financial performance measures, including various
cash flow metrics, net income, basic and diluted earnings per
share, and our other GAAP results.
The following table presents a reconciliation of net income
(loss) to adjusted net income, as well as the calculation of
adjusted basic and diluted earnings (loss) per share, for each of
the periods indicated:
(in thousands, except per share data)
13 Weeks Ended
39 Weeks Ended
Reconciliation of Net Income (Loss) to
Adjusted Net Income
October 27,
2024
October 29,
2023
October 27,
2024
October 29,
2023
Net income (loss)
$
3,932
$
(35,372
)
$
369,946
$
7,694
Add (deduct):
Share-based compensation expense and
related taxes
80,426
65,799
232,377
187,878
Change in fair value of equity
warrants
564
33,800
122
13,542
Deferred income tax benefit
—
—
(275,669
)
—
Exit costs
—
(778
)
—
6,839
Adjusted net income
$
84,922
$
63,449
$
326,776
$
215,953
Weighted-average common shares used in
computing earnings (loss) per share and adjusted earnings per
share:
Basic
414,361
430,758
426,203
428,743
Effect of dilutive share-based awards
(1)
12,211
1,414
7,422
2,663
Diluted (1)
426,572
432,172
433,625
431,406
Earnings (loss) per share attributable to
common Class A and Class B stockholders
Basic
$
0.01
$
(0.08
)
$
0.87
$
0.02
Diluted (1)
$
0.01
$
(0.08
)
$
0.85
$
0.02
Adjusted basic
$
0.20
$
0.15
$
0.77
$
0.50
Adjusted diluted (1)
$
0.20
$
0.15
$
0.75
$
0.50
(1)
For the thirteen weeks ended October 29,
2023, our calculation of adjusted diluted earnings per share
attributable to common Class A and Class B stockholders requires an
adjustment to the weighted-average common shares used in the
calculation to include the weighted-average dilutive effect of
share-based awards.
Free Cash Flow
To provide investors with additional information regarding our
financial results, we also disclose free cash flow, a non-GAAP
financial measure that we calculate as net cash provided by (used
in) operating activities less capital expenditures (which consist
of purchases of property and equipment, capitalization of labor
related to our websites, mobile applications, software development,
and leasehold improvements). We have provided a reconciliation
below of free cash flow to net cash provided by (used in) operating
activities, the most directly comparable GAAP financial
measure.
We have included free cash flow because it is used by our
management and board of directors as an important indicator of our
liquidity as it measures the amount of cash we generate.
Accordingly, we believe that free cash flow provides useful
information to investors and others in understanding and evaluating
our operating results in the same manner as our management and
board of directors.
Free cash flow has limitations as a financial measure and you
should not consider it in isolation or as a substitute for analysis
of our results as reported under GAAP. There are limitations to
using non-GAAP financial measures, including that other companies,
including companies in our industry, may calculate free cash flow
differently. Because of these limitations, you should consider free
cash flow alongside other financial performance measures, including
net cash provided by (used in) operating activities, capital
expenditures and our other GAAP results.
The following table presents a reconciliation of net cash
provided by operating activities to free cash flow for each of the
periods indicated:
(in thousands)
13 Weeks Ended
39 Weeks Ended
Reconciliation of Net Cash Provided by
Operating Activities to Free Cash Flow
October 27, 2024
October 29, 2023
October 27, 2024
October 29, 2023
Net cash provided by operating
activities
$
183,462
$
79,377
$
388,809
$
386,664
Deduct:
Capital expenditures
(31,695
)
(31,685
)
(92,920
)
(110,902
)
Free Cash Flow
$
151,767
$
47,692
$
295,889
$
275,762
Free cash flow may be affected in the near to medium term by the
timing of capital investments (such as the launch of new
fulfillment centers, pharmacy facilities, veterinary clinics,
customer service infrastructure, and corporate offices and
purchases of IT and other equipment), fluctuations in our growth
and the effect of such fluctuations on working capital, and changes
in our cash conversion cycle due to increases or decreases of
vendor payment terms as well as inventory turnover.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241204895541/en/
Investor Contact: ir@chewy.com
Media Contact: Diane Pelkey dpelkey@chewy.com
Chewy (NYSE:CHWY)
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Chewy (NYSE:CHWY)
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