Chewy is an online store of pet products, whose shares are currently trading 30% below the marks of the beginning of 2021. The reason for such dynamics is a decrease in the growth rate of the active customer base compared to last year's values.
In fact, there is no reason for serious concern, because the company did not just get one-time customers who purchased goods on the platform because of closed offline stores. Many users appreciated the convenience of such a function as “autoship” - regular delivery of the necessary items. According to management estimates, in the second year of using this subscription, customers tend to spend about $400 per year, in the third — $700, and in the fourth - $900. Thus, having acquired a base of loyal users, Chewy has all the possibilities for its further monetization.
The company pays great attention to the development of its own brands, which allows to increase the marginality of the business. In the second quarter, the gross margin increased by 200 basis points to 27.5%. Revenue increased by 27% YoY to $2.16 billion. At the same time, the revenue from the "autoship" segment increased by 30%, to $1.51 billion and amounted to about 70% of the total figures. The number of active users reached 20.1 million people (+20% YoY). The target targeted market is estimated at $100 billion. Chewy has started to develop a veterinary direction, which increases this figure by another $35 billion.