Shares of Chewy Inc. jumped about 14% in the aftermarket Wednesday after the specialty retailer reported profit and sales above Wall Street expectations, saying that quarterly earnings benefited from ongoing customer loyalty, and announced that it was expanding operations to Canada.
An eventual international expansion was part of Chewy’s roadmap, and now is a good time, the company said in a letter to shareholders.
Chewy has “strengthened our fundamentals over the past few years, both operationally and financially, and we have put our U.S. business on a steady trajectory of growth and profitability.”
Moreover, its technology has transitioned to the cloud and the platform can be “reliably deployed in Canada, without meaningful incremental investment,” the retailer said.
Chewy earned $22.2 million, or 5 cents a share, in the fiscal first quarter, compared with $18.5 million, or 4 cents a share, in the year-ago quarter. Adjusted for one-time items, Chewy earned 20 cents a share.
Sales rose nearly 15% to $2.78 billion, the company said.
Analysts polled by FactSet expected the retailer to report adjusted earnings of 8 cents a share on sales of $2.73 billion.
The year was off to “a strong start” for Chewy, which sells pet food and other pet-related furniture and items, Chief Executive Sumit Singh said in a statement.
Results show “accelerating” growth and margins expansion, Singh said, as the company enjoyed “customer loyalty.”
“The superior value proposition of the Chewy brand continues to resonate, and our team continues to demonstrate operating discipline and high-quality execution,” he said.