Tough (ALL) – Get report, the online pet products provider, made a surprise fiscal first quarter profit from a loss a year earlier with 32% more revenue.
Chewy reported, however, that supply restrictions put some products out of stock, hurting revenue for the quarter.
Lastly, Chewy shares were trading 2.4% lower at $ 77.48. They closed Thursday up 2% at $ 79.35.
For the quarter ending May 2, the Dania Beach, Florida company earned 9 cents a share compared to a loss of 12 cents a share in the prior year quarter.
Revenue reached $ 2.14 billion from $ 1.62 billion.
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An analyst survey conducted by FactSet produced consensus estimates of a GAAP loss of 3 cents a share on revenue of $ 2.12 billion.
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“[Elevated] Out-of-stock levels were a persistent headwind throughout the quarter and reduced our first quarter net sales by an estimated $ 40 million, “Chewy said in a statement.
“These industry-wide headwinds are driven by supply and we expect them to decline in the second half of the year as additional production capacity comes online.
“Until then, we will continue to actively manage our inventory and use our recommendation engines to help customers find attractive alternatives.”
On the positive side, the company’s active client base increased 32% from the prior year, giving Chewy 19.8 million of them at the end of the quarter.
More generally, in the last two years, the active customer base has increased by 75%, or 8.4 million customers.
The weighted average seniority of its active clients is just under two years. “In other words, our average active customer is still on the left side of their lifetime expense curve with us,” the company said.
Net spend per active customer increased $ 31, or 8.7%, in the first quarter to a total of $ 388.
The gross profit margin in the first quarter expanded 4.2 percentage points to 27.2%.
Chewy also said it was entering the fresh and prepared pet food space.
The company said it developed and patented sustainable packaging that allows it to “preserve product quality throughout the delivery process.”
Products are in beta mode. Chewy said it would launch distribution in three areas that cover about 60% of its customer base. He did not specify where.
Most recently, Chewy said in late May that it has expanded features within its Connect With a Vet telehealth service.
New features include video consultations with veterinarians, the ability to schedule virtual consultations with veterinarians, and extended hours of operation.