Canada markets closed

Chewy CEO: 'We are seeing meaningful lift in new customers' amid COVID-19 outbreak

Heidi Chung
Reporter

The deadly and rapidly spreading COVID-19 outbreak has been wreaking havoc on companies around the world. Nevertheless, some companies — including online pet product retailer Chewy (CHWY) — have emerged as winners amid the chaos.

“While 2019 closed on a high note, and 2020 got off to a strong start, the world changed dramatically with the coronavirus outbreak,” CEO Sumit Singh said in the company’s earnings statement.

“We are seeing 13.5 million of our active customers engage with us and making sure that we are delivering their essentials and supplies,” Singh said in an interview Friday on Yahoo Finance. “We are seeing a meaningful lift in new customers migrating to our platform as social distancing is practiced more and more.”

Surge in demand has its challenges, according to Singh. “In terms of the shipping delays, yes, we are experiencing a lengthened delivery time. We are acknowledging that on our website. We believe that being transparent with customers during this time is an important thing to do, again going back to communication. And we are also, finding that customer sentiment towards our brand remains motive and customers are understanding and forgiving during this time.” 

Here were the main numbers for Chewy’s fourth quarter, compared to Bloomberg estimates:

  • Adj. EBITDA loss: $5.85 million vs. $17.8 million expected

  • Adj. loss per share: 15 cents vs. 10 cents

  • Net sales: $1.35 billion vs. $1.38 billion expected

Bailey the rescue dog poses for a photo in a photo booth ahead of the Chewy Inc. IPO at the New York Stock Exchange (NYSE) in New York City, U.S., June 14, 2019. REUTERS/Andrew Kelly

Chewy expects first-quarter net sales between $1.5 billion to $1.52 billion, exceeding analysts’ expectations for $1.44 billion.

Shares of the retailer have been on fire this year. Chewy stock surged 23% so far this year, while the broader market plunged nearly 22% during the same time period. Investors piled into the name on hopes of a sales surge, as people stocked up on essential pet supplies during the pandemic.

According to a couple key data findings, Chewy’s momentum will likely continue into the first quarter. Bank of America gathered aggregated credit and debit card spend at pet retailers through March 24. The monthly data for January showed year-over-year growth of 6.5% and 9.8% growth in February.

“We note a significant acceleration in March, with data showing y/y daily spending growth averaging 21% through 3/24 and peaking at 58% on 3/16. We note pet retailer strength trending stronger matches recent BAC credit/debit card data showing strength in staples like grocery,” the firm wrote in a note Wednesday.

(Source: Thinknum)

In addition, alternative data firm Thinknum found that the number of people talking about Chewy on Facebook increased significantly in recent weeks. “What's notable is - similar to other brands likely outperforming through the pandemic - Chewy's Talking About Count kept rising last month, a signal it was on consumers' minds as they were cooped up at home,” Thinknum Finance Editor Jon Marino wrote.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

More from Heidi:

Find live stock market quotes and the latest business and finance news

Follow Yahoo Finance on TwitterFacebookInstagramFlipboardLinkedIn, and reddit.