As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the online retail industry, including Chewy (NYSE:CHWY) and its peers.
Consumers ever rising demand for convenience, selection, and speed are secular engines underpinning ecommerce adoption. For years prior to Covid, ecommerce penetration as a percentage of overall retail would grow 1-2% annually, but in 2020 adoption accelerated by 5%, reaching 25%, as increased emphasis on convenience drove consumers to structurally buy more online. The surge in buying caused many online retailers to rapidly grow their logistics infrastructures, preparing them for further growth in the years ahead as consumer shopping habits continue to shift online.
The 6 online retail stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was 1.1% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 14.8% since the latest earnings results.
Chewy (NYSE:CHWY)
Founded by Ryan Cohen, who later became known for his involvement in GameStop, Chewy (NYSE:CHWY) is an online retailer specializing in pet food, supplies, and healthcare services.
Chewy reported revenues of $3.25 billion, up 14.9% year on year. This print exceeded analysts’ expectations by 1.5%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates.
Chewy Total Revenue
Interestingly, the stock is up 11.1% since reporting and currently trades at $37.23.
Known for its glass tower car vending machines, Carvana (NYSE:CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.
Carvana reported revenues of $3.55 billion, up 46.3% year on year, outperforming analysts’ expectations by 6.2%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and impressive growth in its units.
Carvana Total Revenue
Carvana pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 114,379 units sold, up 50.3% year on year. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 14.3% since reporting. It currently trades at $241.48.
Founded in 2002 by Niraj Shah, Wayfair (NYSE:W) is a leading online retailer of mass-market home goods in the US, UK, Canada, and Germany.
Wayfair reported revenues of $3.12 billion, flat year on year, exceeding analysts’ expectations by 2%. Still, it was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates.
Wayfair delivered the slowest revenue growth in the group. The company reported 21.4 million active buyers, down 4.5% year on year. As expected, the stock is down 32.9% since the results and currently trades at $31.10.
Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve (NASDAQ:RVLV) is a fashion retailer leveraging social media and a community of fashion influencers to drive its merchandising strategy.
Revolve reported revenues of $293.7 million, up 13.9% year on year. This result beat analysts’ expectations by 3.8%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and number of active customers in line with analysts’ estimates.
The company reported 2.67 million active buyers, up 4.9% year on year. The stock is down 28.8% since reporting and currently trades at $20.17.
Founded by Jeff Bezos after quitting his stock-picking job at D.E. Shaw, Amazon (NASDAQ:AMZN) is the world’s largest online retailer and provider of cloud computing services.
Amazon reported revenues of $187.8 billion, up 10.5% year on year. This number was in line with analysts’ expectations. More broadly, it was a satisfactory quarter as it also logged an impressive beat of analysts’ EPS estimates but operating income guidance for next quarter missing analysts’ expectations.
The stock is down 21% since reporting and currently trades at $188.73.
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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