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The pet category is "recession resilient," Chewy CEO Sumit Singh told investors after growing sales in Q4.

Chewy, Inc. reported that net sales grew in its Q4 and fiscal 2023 ended Jan. 28, 2024. Consumers continued to spend on their pets, even as they cut costs and look for value in other categories.

“I am proud of the performance the team delivered to close out a strong fourth quarter and full year,” said CEO Sumit Singh. “In 2023, we gained market share while simultaneously expanding margins and accelerating free cash flow generation. As we embark on 2024, we remain committed to further expanding our margins and generating meaningful free cash flow for our shareholders. Furthermore, we are excited about the strategic opportunities ahead and our role in continuing to drive innovation across the pet category.”


Chewy is No. 13 in the Top 1000, which is Digital Commerce 360’s database ranking North America’s largest online retailers by their annual web sales. In the Top 1000, Digital Commerce 360 categorizes Chewy as a Specialty retailer.

Chewy Q4 results

The pet retailer reported that net sales grew 4.2% to $2.83 billion in Q4. Net income grew substantially, to $31.9 million from $6.8 million in the year-ago period. 


For the full 2023 fiscal year, net sales grew 10.2% to $11.15 billion. However, net income declined to $39.6 million from $49.9 million in 2022. 

Autoship orders continued to make up the majority of sales, accounting for more than 75% of revenue in 2023, chief financial officer David Reeder said in an earnings call. They totaled $2.16 billion in Q4 sales, and $8.49 billion in 2023 sales.

Pet products and the economy

Sales of hard goods and discretionary items remain lower than other categories, he said, but consumers are also trending toward buying more premium consumables and health supplements. Non-discretionary consumables like pet food and medical supplies make up about 85% of Chewy’s sales, he said.

The pet category is “recession resilient,” Singh told analysts and investors. In general, Chewy customers do not trade down to lower-priced products in those categories.


“So that lower mix of hard goods is both a strength and an opportunity for Chewy given that it shields us from the discretionary impact that you’ve seen announced in some other places,” Singh said.

He cited Walmart as a growing competitor in the low-cost side of the pet category, too.

Pet adoptions are down

U.S. pet adoptions declined 30% year over year in Q4, Singh said. Online searches for new pets are also down, signaling that the rate will continue declining, he added. Therefore, Chewy expects below-average growth in 2024.

Active customers declined slightly to 20.1 million in Q4, Chewy said. However, returning customers are spending more than ever. Net sales per active customer grew 12% to $555 in Q4.


Chewy’s competitors

Petco Health and Wellness Company, Inc. also reported growing sales in its fiscal fourth quarter ended Feb. 3. Net revenue increased 6.1% to $1.67 billion. However, comparable sales declined 0.9% year over year. The company reported a net loss of $22.6 million, compared to a loss of $32.7 million in the year-ago period.

CEO Ron Coughlin stepped down from his role in March, and interim CEO R. Michael Mohan weighed in on some of Petco’s problems.

“I recognize we have not been executing the way we need to, in a number of areas, to deliver on our full potential,” Mohan said in a call with investors and analysts. “Most critically, we have not adapted quickly enough to recent changes in consumer preferences. First, we did not anticipate the magnitude of the shift to value in both our consumables and discretionary business. And second, we did not expect customers to pull back as quickly as they have, and for this duration, when spending on discretionary items.” 

Going forward, Petco will take a different route than Chewy and focus on value over premium brands.


Chewy earnings

For the fourth quarter ended Jan. 28, Chewy reported:

  • Net sales increased 4.2% to $2.83 billion.
  • Net income was $31.9 million from $6.8 million in the year-ago period.
  • Autoship orders made up $2.16 billion in sales.

For the fiscal year ended Jan. 28, Chewy reported:

  • Net revenue grew 10.2% to $11.15 billion. 
  • Net income declined to $39.6 million from $49.9 million in 2022. 
  • Autoship orders accounted for $8.49 billion in sales.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports

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