Business

Chewy CEO claims 45% revenue growth was driven by pet industry trends, despite a pandemic online boom

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Pet food supplier Chewy on Tuesday reported better-than-expected results in the company’s third fiscal quarter, in which it saw another surge in business amid the coronavirus pandemic.

Chewy reported a 45% growth in revenue in the quarter ended Nov. 1, the third consecutive three-month period of a nearly 50% increase in business in 2020.

CEO Sumit Singh, who appeared on CNBC’s “Mad Money” Tuesday evening after his company posted results after the close, attributed more of the recent success to emerging trends in the pet retail industry, downplaying that the pandemic caused a shift in pet owner shopping habits.

“Regardless of whether we were in a pandemic or not, the secular shift that we were enjoying and executing behind was all driven by the value proposition that we bring to the space,” he told Jim Cramer, host of “Mad Money.”

Chewy recorded $1.78 billion of sales and 8 cents of losses per share in the third quarter of the company’s 2020 fiscal year. Those results topped Refinitiv estimates of $1.72 billion on the top line and a 14 cent loss per share on the bottom line.

“We don’t really believe the growth that we’re delivering right now is pandemic driven,” Singh said.

The 45% surge in sales is nearly double the 24.5% growth that Chewy reported in the final quarter of its 2019 fiscal year, which preceded the global coronavirus outbreak that disrupted global economies.

Like other online retailers, Chewy, a subsidiary of PetSmart, saw sales blossom as homebound consumers relied on the internet to shop for products.

“Now the pandemic has stepped in, and I believe that growth has accelerated. Several quarters of growth were compressed into this year, and coming out of the pandemic we don’t really believe the value proposition [is] changing,” Singh explained.

Singh, who has led Chewy as chief executive since 2017, said the company serves about 18 million customers, just a fraction of the estimated 100 million U.S. pet-owning households.

He said he expects to see even more growth as the company seeks to take more share in the $100 billion pet supplies market.

Chewy shares rose nearly 6% to $79.15 in Tuesday’s session. The stock is up more than 172% year to date.

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