Dive Brief:
- Chewy has named David Reeder as its next chief financial officer, effective Feb. 14.
- Stacy Bowman has been serving in the role on an interim basis since July after Mario Marte stepped down as CFO after five years. Bowman will continue serving as the company’s chief accounting officer, according to a company press release.
- Reeder joins the online pet supplies retailer from GlobalFoundries, a semiconductor manufacturer, where he served as CFO since 2020 and led its financial strategy, including its initial public offering in 2021. Reeder also has experience from Tower Hill Insurance Group, Lexmark International and Cisco Systems.
Dive Insight:
About five months after Marte stepped down from the CFO role, Chewy has identified a replacement.
The pet retailer has brought on a seasoned executive with years of experience leading finance teams, though not in the retail space.
"David is a highly experienced finance executive who has driven strong results across a range of complex industries,” Chewy CEO Sumit Singh said in a statement. “I am excited for David to join Chewy and to play an important role in driving long-term, profitable and capital efficient growth as we execute on key strategic priorities across our business.”
The news came as Chewy reported third quarter earnings results. The company’s Q3 net sales increased 8.2% year over year to $2.7 billion. Chewy swung to a net loss of $35.8 million from a profit of $2.3 million in the year-ago period, while its operating loss ballooned to $10.2 million from $434,000 last year.
Chewy’s active customers in the period fell 1.3% year over year to 20.3 million even as its advertising and marketing expenses increased 1.2% to $179.2 million.
Despite growing losses and a shrinking customer base, Singh told analysts on a call that “Chewy continues to outperform and gain market share through the present environment.” And while inflation and economic uncertainty has been affecting much of the industry, Singh said loyalty and spending among its Autoship subscription customers has remained unchanged. In the third quarter, Autoship customer sales increased 12.8% year over year to $2.1 billion, representing 76.4% of total net sales.
Singh also disclosed on the call that Chewy laid off an undisclosed number of employees in November as part of its 2024 strategic planning process. “This decision was carefully considered as part of our ongoing focus on becoming an ever more agile and disciplined company and aligns our efforts into priorities, which we believe will gain us the most significant customer wins and generate the highest business returns,” Singh said. “While we consolidated some roles within the organization, we continue to invest in other high-priority areas. As we head into 2024, we expect these actions to create room for us to continue investing behind our growth initiatives.”
Offering a glimpse into its fourth quarter, the pet retailer said its Black Friday and Cyber Monday traffic and sales performance exceeded its expectations across all categories and conversion rates were up year over year. New customer acquisition during the period was 40% higher than the company’s Q3 weekly average.
“While we have seen trends return to pre-holiday levels, our Black Friday and Cyber Monday performance is encouraging,” Singh said. “Specifically, while consumer spending behavior remains opportunistic in the current environment, our results illustrate that Chewy's value proposition continues to resonate loudly and will prevail when consumer demand and industry inputs improve.”
