Chewy shares surged almost 27% after the retailer of pet food and other pet-related products reported better-than-expected first quarter earnings and raised its margin guidance for the full year.
For 2024, the company continues to expect sales in the range of $11.6 billion to $11.8 billion but lifted its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin expectation to 4.1% to 4.3%, above the 3.3% previously forecast.
For the second quarter, sales are expected to increase by 2% to 3% over the year-ago quarter to between $2.84 billion and $2.86 billion, compared to Street estimates of $2.84 billion.
For the first quarter, sales increased 3.1% year-over-year to $2.88 billion, ahead of estimates of $2.85 billion.
Adjusted earnings per share were up $0.11 year-over-year at $0.32, above the consensus $0.21.
Notably, the company achieved a record adjusted EBITDA of 5.7%, up 170 basis points year-over-year.
“Chewy’s value proposition continues to resonate with our customers, and I am proud of the teams at Chewy who are executing flawlessly on our strategic roadmap and the controllable elements of our business,” Chewy CEO Sumit Singh commented.
The company also announced that its board has authorized an up to $500 million share repurchase program.
Shares of Chewy traded up 26.5% at $21.40 on Wednesday afternoon.