Just when you may have thought that Chewy couldn't be a more dangerous competitor, the online retailer released its third-quarter financial results right before the holidays—and what it revealed is downright frightening. The company made significant progress across the board, including in quarterly sales (+45% YOY), YTD sales (+46%), gross margin(+410 BPS) and EBITDA margin (+530 BPS).
But these numbers represent a snapshot that just tells part of the story; to really understand how Chewy became an even more dangerous threat to traditional pet stores in 2020, consider the following:
• During the first 39 weeks of Chewy's FY2020, the company had more sales ($5.1 billion) than all of FY2019 ($4.85 billion).
• Autoship sales grew by more than 45% YTD.
• Advertising and marketing expenses dropped from 9% of net sales during the first three quarters of 2019 to 7% during the same period in 2020.
• The company's moved further down the path toward profitability, with net losses dropping by about 40%.
• In September, the company agreed to sell 5.1 million shares of its Class A common stock to raise more than $275 million in capital for growth initiatives.
• Champion Pet Foods, which made big news in 2017 for pulling its products off of Chewy, is now selling its ACANA and ORIJEN diets through the online retailer.