DANIA BEACH, FLA. — Chewy, Inc., an e-commerce pet supply platform, sustained a loss of $252.4 million in the fiscal year ended Feb. 2, 2020, which compared with a loss of $267.9 million in the same period a year ago. Net sales in the full year soared 40% to $4.85 billion from $3.53 billion a year ago.
In the fourth quarter, Chewy posted a loss of $60.9 million, which compared with a loss of $66.3 million in the same period a year ago. Net sales increased 35% to $1.35 billion, up from $1.09 billion a year ago.
“We completed 2019 with strong fourth quarter results, delivering net sales growth of 35% and expanding our gross margins by 320 basis points,” said Sumit Singh, chief executive officer of Chewy.
Chewy reported having 13.5 million active customers at the end of its fiscal year on Feb. 2, 2020, representing a 27% increase in its customer base compared to the end of fiscal 2018.
Net sales per customer increased by 10% as well. The company offers a subscription-based auto-ship service, which made up 70% of Chewy’s revenue in the fourth quarter, Singh reported.
“We continue to get big fast, while getting fit fast as demonstrated by growth in our top line and improvement in our bottom line,” Singh said.
“While 2019 closed on a high note, and 2020 got off to a strong start, the world changed dramatically with the coronavirus outbreak,” Singh said. “In times like these, we know how special and comforting the bond is between humans and pets, and we devote ourselves every day to supporting those special relationships.”
Regarding potential future impacts of COVID-19, Singh said the company is continuing operations and sales are steady.
“Our shop-at-home business is proving resilient amidst the current economic disruption. Our volumes have increased as customers have chosen to stay at home and take advantage of the shopping convenience that we provide.”
The company has also taken measures to keep its employees safe and healthy at this time.
“We have expanded our health benefits and revised our PTO and sick day policies to meet the evolving needs of this unique situation,” Singh said. “Additionally, we have materially increased cleaning and sanitizing procedures throughout our worksites, including our customer service sites and fulfillment centers. We have instituted work from home at our corporate locations as well as for a proportion of our customer service teams.”
Singh detailed a contingency plan for its fulfillment and customer service centers during a conference call on April 2, explaining that if an outbreak were to affect one of the facilities, Chewy would divert operations to another facility in the United States until the situation was managed.
“We believe we can absorb a facility being offline for a short period of time with minimal incremental disruption to customer service levels,” Singh said.
The company, headquartered in Dania Beach and Boston, operates 10 fulfillment centers and three customer service centers across the United States.
Chewy plans to open its 11th fulfillment center in Pennsylvania this year, which will be its first automated center. Compared to its other fulfillment centers, throughput capacity at the new facility is expected to be up 25% and productivity up more than 50%.
“So far, we have not seen material disruptions in our operations or supply chain,” Singh said in regard to COVID-19. “However, the situation is involving on a daily basis and we continue to monitor the impact on our business and our future plans for the business.”
The company opted to withhold details about its full-year guidance in light of potential unknown COVID-19 impacts. Singh said the company hopes to provide more details and updates in its first-quarter earnings call in June.
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