Chewy Inc (NYSE:CHWY) stock plummets 14.11% (As on Mar 30, 11:31:38 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the fourth quarter of FY 21. Gross margin declined 170 basis points year over year to 25.4 percent. The company reported net loss of $63.6 million, including share-based compensation expense of $15.8 million, and net margin declined 370 basis points to (2.7) percent. The main drivers of this were fourth-quarter pricing lagging cost inflation and higher inbound freight costs. Adjusted EBITDA was $(28.1) million and adjusted EBITDA margin declined 420 basis points to (1.2) percent. Further, new outbound shipping contract with FedEx went into effect in January 2022, the last month of our fourth-quarter 2021. Given its timing, this had only a modest impact on fourth-quarter gross margin. In anticipation of this pending increase in freight rates for 2022 – and in the spirit of continuous improvement that is engrained in the culture, the company is already contemplating several logistics and supply chain initiatives to lower freight costs. Several of these were launched in the first quarter, while others will launch in the second quarter and beyond.

CHWY in the fourth quarter of FY 21 has reported the adjusted loss per share of 15 cents, missing the analysts’ estimates for the adjusted loss per share of 8 cents. The company had reported the adjusted revenue growth of 17 percent to $2.39 billion in the fourth quarter of FY 21, missing the analysts’ estimates for revenue of $2.42 billion. e. Chewy Pharmacy sales increased 75 percent in the fourth quarter, with nearly all of this growth running through our three owned-and-operated pharmacies. . In addition to this momentum in Pharmacy, Chewy Health remains focused on expanding its penetration into the $35 billion pet healthcare market by launching new products and services across the pet health and wellness space. The company has expanded the rollout of Practice Hub in January, and it is now available to clinics nationwide.

For fiscal Q1, the online pet food retailer said it expects net sales of $2.4 billion to $2.43 billion, while fiscal 2022 net sales are projected at $10.2 billion to $10.4 billion. The consensus is for Q1 and 2022 revenue of $2.51 billion and $10.61 billion, respectively.

The company is preparing to launch two new businesses in 2023, including Chew Loyalty and Sponsored Ads on Chewy.com