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Chewy Reports Strong Quarter Among Coronavirus Pandemic

By Daniel B. Kline - Apr 7, 2020 at 10:30AM

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The pet food and supplies provider has been helped by some unique circumstances.

Chewy (CHWY -4.68%), the online pet store which counts PetSmart as its majority owner, had a good year even before the coronavirus pandemic pushed people to order more essential items online. 

The company grew net sales by 40% to $4.85 billion for the full year. That actually exceeded its fourth-quarter growth, with the company closing its year with $1.35 billion in sales, a gain of 35%.

A dog holds up an empty bowl.

Dogs still need to eat. Image source: Getty Images.

Will pandemic circumstances help Chewy?

Chewy faces a difficult battle for customers against (AMZN 0.14%). The current pandemic may help Chewy gain more users, as Amazon has extended shipping times on items it deems non-essential or that are out of stock.

But pets need to eat no matter what's happening in the world at large. They also still need toys and other supplies, like litter for cats. With people going out less (or not at all) and Amazon struggling to meet the needs of its human customers, it's very likely that Chewy will benefit.

"While 2019 closed on a high note, and 2020 got off to a strong start, the world changed dramatically with the coronavirus outbreak," CEO Sumit Singh said in a press release. "In times like these, we know how special and comforting the bond is between humans and pets, and we devote ourselves every day to supporting those special relationships."  

Will customers stay?

If Chewy meets pet owners' needs during a time of crisis, it's very likely that at least some of those people will stay customers. That should help the company stay on a growth track even after the coronavirus pandemic has passed and the world returns to some form of normal.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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