Chewy, Inc. (NYSE: CHWY) shares jumped more than 5% in pre-market trading on Wednesday after the company reported better-than-expected earnings for the second quarter of fiscal year 2024. The stock climbed to $27.20, up $1.34 or 5.18%, as investors reacted positively to the company’s robust financial performance.

Chewy reported net sales of $2.86 billion for the quarter ended July 28, 2024, a 2.6% increase year-over-year. While this figure slightly missed analyst estimates of $2.869 billion, the company delivered impressive earnings growth.

Key highlights from Chewy’s Q2 2024 results:

– Gross margin improved by 120 basis points to 29.5% year-over-year.
– Net income surged to $299.1 million, up from $20.2 million in Q2 2023.
– Net margin expanded significantly to 10.5%, compared to 0.7% in the prior year period.
– Basic earnings per share (EPS) reached $0.70, an increase of $0.65 year-over-year.
– Diluted EPS rose to $0.68, up $0.63 from the same quarter last year.
– Adjusted EBITDA grew 64.3% to $144.8 million, with an adjusted EBITDA margin of 5.1%.

Sumit Singh, Chewy’s CEO, expressed satisfaction with the company’s performance, stating, “Our Q2 performance reflects another quarter of strong execution, delivering net sales at the high end of our guidance range. Chewy’s compelling value proposition is driving broader and deeper customer engagement.”

The company’s active customer base reached a record 20 million, with net sales per active customer hitting $565, up 6.2% year-over-year.

Despite the slight miss in net sales, Chewy’s strong earnings growth and record customer engagement metrics have fueled investor optimism, driving the stock higher in pre-market trading. The company’s focus on operational efficiency and its ability to expand margins have contributed to its impressive financial results.

As the broader U.S. stock market futures point to a flat open, Chewy stands out as a bright spot, with its shares rallying over 5% in anticipation of the company’s continued growth and success in the pet retail market.

Stock price as on Aug 28, 2024 8:01 AM ET