Chewy, Inc. (NYSE: CHWY) is an online retail platform specializing in pet food and products, aiming to provide a broad selection of high-quality goods and services for pet owners. The company reported a rise in earnings for the fourth quarter and full year of fiscal 2024, demonstrating strong operational performance and management’s effective strategies, marking an end to a period of customer base decline.

For the fourth quarter of fiscal 2024, Chewy’s net sales increased by 14.9% year-over-year to $3.25 billion. The full-year net sales reached $11.86 billion, reflecting a year-over-year growth of 6.4%. Q4 2024 included an additional week of operations, contributing approximately $227 million to net sales. Excluding this impact, the quarter’s and year’s net sales grew by approximately 6.9% and 4.4%, respectively.

The company’s active customer base showed positive momentum, with 20.5 million active customers at the end of Q4, which is a 2.1% increase compared to the previous year—the first year-over-year rise in eight quarters. Autoship customer sales accounted for 80.6% of net sales in Q4, rising 21.2% year-over-year to $2.62 billion, and increased by 10.6% for the full year to $9.39 billion.

Chewy reported an adjusted EBITDA of $124.5 million for Q4 and $570.5 million for the full year, achieving an adjusted EBITDA margin of 3.8% for the fourth quarter, and 4.8% for the fiscal year, both reflecting expansions of 70 and 150 basis points year-over-year, respectively.

Gross margin for Q4 was reported at 28.5%, up 30 basis points year-over-year, while the full-year gross margin expanded to 29.2%, a rise of 80 basis points. Selling, general and administrative (SG&A) expenses for Q4 totaled $601 million, or 18.5% of net sales, demonstrating a 150 basis point improvement compared to the previous year, benefiting from operational efficiency.

In terms of profitability, Chewy’s adjusted net income for Q4 was $120 million, translating to $0.28 in diluted adjusted earnings per share, a year-over-year increase of 55.6%. The full-year adjusted net income stood at $446.8 million with adjusted diluted earnings per share of $1.04, an increase of 50.7% over the prior year.

The company also generated an impressive $452.5 million in free cash flow for fiscal 2024, supported by net cash provided by operating activities of $596.3 million and capital expenditures amounting to $143.8 million.

Chewy plans continued investment in customer-centric projects and strategic growth initiatives. For fiscal 2025, the company anticipates net sales in the range of $12.3 billion to $12.45 billion, representing a year-over-year growth expectation of 6% to 7%. Adjusted EBITDA margin is anticipated to be between 5.4% and 5.7%.