Chewy reported growth in sales and expenses. Shares fell by 8%

Online pet retailer Chewy reports Q3 2021 results. The company spoke about the costs in connection with COVID-19, which can be kept in the next quarter. After the report, the shares fell by 8%, to 52 $.

Compared to the same quarter last year:

revenue — 2.2 billion dollars (+24%);
net loss unchanged - 32 million;
adjusted EBITDA — 6 million (+10%).

Here are some operating figures:

number of active clients — 20.4 thousand (+15%);
revenue per active client - 419 $ (+15%);
revenue from auto orders — 1.6 billion (+27%);
share of auto orders from revenue — 71%.

Chewy is a growing company, that cuts loss as sales and customer base grow. And this quarter failed to reduce the loss. The reasons are the same, like the rest: inflation, supply disruptions, persistent labor shortage.

Another negative point is the slowdown in the growth of the customer base.. In 2020, in the midst of quarantine, the online store has gained an advantage. At the end of the year, the number of active clients increased by 43%. Now, due to the high base effect, growth has slowed to 15%, what investors don't like.

The company itself focuses on its advantages. For example, on the size of the average check. It grows in new, and old clients. The share of auto orders from revenue is also growing. Autoorders - subscription purchases. The client selects the required products, and the company regularly delivers them. This model helps Chewy better predict its future cash flows., and also "attach" clients.

According to Chewy, the shift of customers to online stores and the growth in the number of pets will help it increase revenue. The company expects an increase in revenue for this year by 25%, up to $8.9 billion. And adjusted EBITDA due to supply disruptions and other restrictions will remain the same at $85 million..

Since the beginning of the year on the news about the mitigation of quarantine, as well as due to the slow growth of the customer base, Chewy shares fell by 42%.