E-Commerce! CHWY This pandemic is not going away anytime soon. I believe it is a lot like the flu in terms of length, and will be here for the long run. With this being said, this is scaring people from doing the things they used to love doing, such as shopping, going out for a night on the town, or even going to a basic dinner with some family/friends. This mindset has made the industry of E-Commerce go crazy in a positive way. People can do practically whatever they have to do nowadays, online. Buying food, drinks, and other things someone may need is available with one click of a button.
What is Chewy? Chewy Inc. is an American online retailer of pet food and other pet related products based in Dania Beach, Florida. In 2017, Chewy was acquired by PetSmart for $3.35 billion, which was the largest ever acquisition of an e-commerce business at the time! Why is this a good investment for a long term hold? * In 2020, pet ownership in the U.S. rose from 67% of households to an all-time high of 70%, wrote Steve King, president and CEO of the American Pet Products Association (APPA), in a preview of the association’s soon-to-be-released “2021-2022 APPA National Pet Owners Survey.” *
With this in mind, there are so many pet owners and the numbers seem to keep increasing, and I can tell you from EXPERIENCE being a proud dog owner myself, that majority of people spoil their pets JUST like kids, with good food, toys, bones, beds... all the good stuff. This is where Chewy will thrive. Through the pandemic as an E-Commerce company, Chewy has been demonstrating revenue growth, as well as an improving capital position. HOWEVER, they are still having trouble turning a profit the past few quarters due to the fact that their total assets pretty much exactly mirror their total liabilities. On the other hand, a positive thing to note is that their ** third quarter 2021 net sales of $2.21 billion demonstrated 24.1% year-over-year improvement, while the quarterly gross margin of 26.4% indicated year-over-year expansion of 90 basis points. ** That is good to see for bulls!
How will they overcome their lack of profitability? Chewy is looking to expand their business and to add more sources of revenue from more than just selling toys and food. They are looking to expand into the Pet Insurance industry. They recently announced a new partnership with Trupanion, a pet medical insurance provider, which hints at a big move coming. $$$$
If you are a risk tolerant investor, then this is a great pick for you! I have been an investor in this company since mid 2021, and have been following any news/moves by it the entire time. So if you have any questions, comments, concerns, feel free to reach out in the replies! Scared money makes NO money!
