Chewy Inc
For the period ended Jul 28, 2024. Filed Aug 28, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 28, 2024 · Filed Aug 28, 2024
CHWY$22.56-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-04-28; filed 2024-05-29.
0001766502-24-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-07-28; filed 2024-08-28.
0001766502-24-000047
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 90 previous paragraphs and 101 current paragraphs.
63 unchanged; 27 reworded; 6 added; 0 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Selling, general and administrative expenses for the twenty-six weeks ended July 28, 2024 increased by $19.6 million, or 1.6%, to $1.2 billion compared to $1.2 billion in the twenty-six weeks ended July 30, 2023. This was primarily due to an increase of $29.9 million in non-cash share-based compensation expense and related taxes, partially offset by a decrease of $7.4 million in fulfillment costs attributable to automation and supply chain efficiencies within our fulfillment network as well as a decrease of $2.9 million in facilities expenses and other general and administrative expenses attributable to lower corporate headcount.
Current report
Other expense for the twenty-six weeks ended July 28, 2024 decreased by $19.6 million, to $0.8 million compared to other income of $20.4 million in the twenty-six weeks ended July 30, 2023. This decrease was primarily due to changes in the fair value of equity warrants and foreign currency transaction losses, partially offset by changes in the fair value of and tax indemnification receivables and equity investments.
Current report
Share Repurchase Activity
Current report
On May 24, 2024, our Board of Directors authorized the Company to repurchase up to $500 million of its Class A common stock, par value $0.01 per share (the “Class A common stock”), and/or Class B common stock, par value $0.01 per share (the “Class B common stock” and together with the Class A common stock, the “common stock”), pursuant to a share repurchase program (the “Program”). The actual timing and amount of any share repurchases remains subject to a variety of factors, including stock price, trading volume, market conditions, compliance with applicable legal requirements, and other general business considerations. We are not required to repurchase any specific number of shares of common stock. The Program has no expiration date and may be modified, suspended, or terminated at any time.
Current report
On June 26, 2024, the Company entered into an agreement (the “Stock Repurchase Agreement”) with Buddy Chester Sub LLC (the “Seller”), to repurchase and retire an aggregate of 17,550,000 shares of Class A common stock at a price per share of $28.49, resulting in an aggregate repurchase price of $500 million.
Current report
During the thirteen weeks ended July 28, 2024, 1,321,502 and 17,550,000 shares of Class A common stock were repurchased and subsequently cancelled and retired pursuant to the Program and Stock Repurchase Agreement for a total cost of $32.7 million and $500.0 million, respectively, excluding the cost of commissions and excise taxes. The authorized value of shares available to be repurchased under the Program excludes the cost of commissions and excise taxes and as of July 28, 2024, the remaining authorized value was $467.3 million. As of July 28, 2024, the total unpaid cost of share repurchases was $5.3 million, which included $4.5 million for excise taxes.
Reworded paragraphs (27)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and related notes thereto included in this Quarterly Report on Form 10-Q for the quarterly period ended April 28, 2024 (“10-Q Report”) and our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2024 (“10-K Report”). This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under the “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” sections herein and in our 10-K Report, our actual results may differ materially from those anticipated in these forward-looking statements. Unless the context requires otherwise, references in this 10-Q Report to “Chewy,” the “Company,” “we,” “our,” or “us” refer to Chewy, Inc. and its consolidated subsidiaries.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and related notes thereto included in this Quarterly Report on Form 10-Q for the quarterly period ended July 28, 2024 and our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2024 (“10-K Report”). This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under the “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” sections herein and in our 10-Q Report for the quarterly period ended April 28, 2024, our actual results may differ materially from those anticipated in these forward-looking statements. Unless the context requires otherwise, references in this 10-Q Report to “Chewy,” the “Company,” “we,” “our,” or “us” refer to Chewy, Inc. and its consolidated subsidiaries.
Previous wording
We are the largest pure-play pet e-tailer in the United States, offering virtually every product a pet needs. We launched Chewy in 2011 to bring the best of the neighborhood pet store shopping experience to a larger audience, enhanced by the depth and wide selection of products and services, as well as the around-the-clock convenience, that only e-commerce can offer. We believe that we are the preeminent destination for pet parents as a result of our broad selection of high-quality products and expanded menu of service offerings, which we offer at great prices and deliver with an exceptional level of care and a personal touch. We are the trusted source for pet parents and partners and continually develop innovative ways for our customers to engage with us. We partner with approximately 3,500 of the best and most trusted brands in the pet industry, and we create and offer our own outstanding private brands. Through our website and mobile applications, we offer our customers approximately 115,000 products, compelling merchandising, an easy and enjoyable shopping experience, and exceptional customer service.
Current wording
We are the largest pet e-tailer in the United States, offering virtually every product a pet needs. We launched Chewy in 2011 to bring the best of the neighborhood pet store shopping experience to a larger audience, enhanced by the depth and wide selection of products and services, as well as the around-the-clock convenience, that only e-commerce can offer. We believe that we are the preeminent destination for pet parents as a result of our broad selection of high-quality products and expanded menu of service offerings, which we offer at great prices and deliver with an exceptional level of care and a personal touch. We are the trusted source for pet parents and partners and continually develop innovative ways for our customers to engage with us. We partner with approximately 3,500 of the best and most trusted brands in the pet industry, and we create and offer our own outstanding private brands. Through our website and mobile applications, we offer our customers approximately 115,000 products, compelling merchandising, an easy and enjoyable shopping experience, and exceptional customer service.
Previous wording
Evolving macroeconomic conditions, including rising inflation and interest rates, have affected, and continue to affect, our business and consumer shopping behavior. We continue to monitor conditions closely and adapt aspects of our logistics, transportation, supply chain, and purchasing processes accordingly to meet the needs of our growing community of pets, pet parents and partners. As our customers react to these economic conditions, we will adapt our business accordingly to meet their evolving needs.
Current wording
Evolving macroeconomic conditions, including current inflation and interest rates, have affected, and continue to affect, our business and consumer shopping behavior. We continue to monitor conditions closely and adapt aspects of our logistics, transportation, supply chain, and purchasing processes accordingly to meet the needs of our growing community of pets, pet parents and partners. As our customers react to these economic conditions, we will adapt our business accordingly to meet their evolving needs.
Previous wording
We are unable to predict the duration and ultimate impact of evolving macroeconomic conditions on the broader economy or our operations and liquidity. As such, macroeconomic risks and uncertainties remain. Please refer to the “Cautionary Note Regarding Forward-Looking Statements” in this 10-Q Report and in the section titled “Risk Factors” in Item 1A of our 10-K Report.
Current wording
We are unable to predict the duration and ultimate impact of evolving macroeconomic conditions on the broader economy or our operations and liquidity. As such, macroeconomic risks and uncertainties remain. Refer to “Cautionary Note Regarding Forward-Looking Statements” and the section titled “Risk Factors” in Item 1A of our 10-Q Report for the quarterly period ended April 28, 2024.
Previous wording
To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this 10-Q Report adjusted EBITDA, a non-GAAP financial measure that we calculate as net income (loss) excluding depreciation and amortization; share-based compensation expense and related taxes; income tax provision; interest income (expense), net; transaction related costs; changes in the fair value of equity warrants; severance and exit costs; and litigation matters and other items that we do not consider representative of our underlying operations. We have provided a reconciliation below of adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure.
Current wording
To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this 10-Q Report adjusted EBITDA, a non-GAAP financial measure that we calculate as net income (loss) excluding depreciation and amortization; share-based compensation expense and related taxes; income tax provision (benefit); interest income (expense), net; transaction related costs; changes in the fair value of equity warrants; severance and exit costs; and litigation matters and other items that we do not consider representative of our underlying operations. We have provided a reconciliation below of adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure.
Previous wording
We believe it is useful to exclude non-cash charges, such as depreciation and amortization and share-based compensation expense from our adjusted EBITDA because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We believe it is useful to exclude income tax provision; interest income (expense), net; transaction related costs; changes in the fair value of equity warrants; and litigation matters and other items which are not components of our core business operations. We believe it is useful to exclude severance and exit costs because these expenses represent temporary initiatives to realign resources and enhance operational efficiency, which are not components of our core business operations. Adjusted EBITDA has limitations as a financial measure and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
Current wording
We believe it is useful to exclude non-cash charges, such as depreciation and amortization and share-based compensation expense from our adjusted EBITDA because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We believe it is useful to exclude income tax provision (benefit); interest income (expense), net; transaction related costs; changes in the fair value of equity warrants; and litigation matters and other items which are not components of our core business operations. We believe it is useful to exclude severance and exit costs because these expenses represent temporary initiatives to realign resources and enhance operational efficiency, which are not components of our core business operations. Adjusted EBITDA has limitations as a financial measure and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
Previous wording
To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this 10-Q Report adjusted net income (loss) and adjusted basic and diluted earnings (loss) per share, which represent non-GAAP financial measures. We calculate adjusted net income (loss) as net income (loss) excluding share-based compensation expense and related taxes, changes in the fair value of equity warrants, and severance and exit costs. We calculate adjusted basic and diluted earnings (loss) per share by dividing adjusted net income (loss) attributable to common stockholders by the weighted-average shares outstanding during the period. We have provided a reconciliation below of adjusted net income to net income, the most directly comparable GAAP financial measure.
Current wording
To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this 10-Q Report adjusted net income (loss) and adjusted basic and diluted earnings (loss) per share, which represent non-GAAP financial measures. We calculate adjusted net income (loss) as net income (loss) excluding share-based compensation expense and related taxes, changes in valuation allowances associated with deferred tax assets, changes in the fair value of equity warrants, and severance and exit costs. We calculate adjusted basic and diluted earnings (loss) per share by dividing adjusted net income (loss) attributable to common stockholders by the weighted-average shares outstanding during the period. We have provided a reconciliation below of adjusted net income to net income, the most directly comparable GAAP financial measure.
Previous wording
We have included adjusted net income (loss) and adjusted basic and diluted earnings (loss) per share in this 10-Q Report because each is a key measure used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating adjusted net income (loss) and adjusted basic and diluted earnings (loss) per share facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses and certain variable gains and losses that do not represent a component of our core business operations. We believe it is useful to exclude non-cash share-based compensation expense because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We believe it is useful to exclude changes in the fair value of equity warrants because the variability of equity warrant gains and losses is not representative of our underlying operations. We believe it is useful to exclude severance and exit costs because these expenses represent temporary initiatives to realign resources and enhance operational efficiency, which are not components of our core business operations. Accordingly, we believe that these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Current wording
We have included adjusted net income (loss) and adjusted basic and diluted earnings (loss) per share in this 10-Q Report because each is a key measure used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating adjusted net income (loss) and adjusted basic and diluted earnings (loss) per share facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses and certain variable gains and losses that do not represent a component of our core business operations. We believe it is useful to exclude non-cash share-based compensation expense because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We believe it is useful to exclude changes in valuation allowances associated with deferred tax assets as this is not a component of our core business operations. We believe it is useful to exclude changes in the fair value of equity warrants because the variability of equity warrant gains and losses is not representative of our underlying operations. We believe it is useful to exclude severance and exit costs because these expenses represent temporary initiatives to realign resources and enhance operational efficiency, which are not components of our core business operations. Accordingly, we believe that these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Previous wording
We define Autoship customers as customers in a given fiscal quarter that had an order shipped through our Autoship subscription program during the preceding 364-day period. We define Autoship as our subscription program, which provides automatic ordering, payment, and delivery of products to our customers. We view our Autoship subscription program as a key driver of recurring net sales and customer retention. For a given fiscal quarter, Autoship customer sales consist of sales and shipping revenues from all Autoship subscription program purchases and purchases outside of the Autoship subscription program by Autoship customers, excluding taxes collected from customers, excluding any refund allowance, and net of any promotional offers (such as percentage discounts off current purchases and other similar offers) for that quarter. For a given fiscal year, Autoship customer sales equal the sum of the Autoship customer sales for each of the fiscal quarters in that fiscal year.
Current wording
We define Autoship customers as customers in a given fiscal quarter that had an order shipped through our Autoship subscription program during the preceding 364-day period. We define Autoship as our subscription program, which provides automatic ordering, payment, and delivery of products to our customers. We view our Autoship subscription program as a key driver of recurring net sales and customer retention. For a given fiscal quarter, Autoship customer sales consist of sales and shipping revenues from all Autoship subscription program purchases and purchases outside of the Autoship subscription program by Autoship customers, excluding taxes collected from customers, excluding any refunds, and net of any promotional offers (such as percentage discounts off current purchases and other similar offers) for that quarter. For a given fiscal year, Autoship customer sales equal the sum of the Autoship customer sales for each of the fiscal quarters in that fiscal year.
Previous wording
We derive net sales primarily from sales of both third-party brand and private brand pet food, pet products, pet medications and other pet health products, and related shipping fees. Sales of third-party brand and private brand pet food, pet products and shipping revenues are recorded when products are shipped, net of promotional discounts and refund allowances. Taxes collected from customers are excluded from net sales. Net sales is primarily driven by growth of new customers and active customers, and the frequency with which customers purchase and subscribe to our Autoship subscription program.
Current wording
We derive net sales primarily from sales of both third-party brand and private brand pet food, pet products, pet medications and other pet health products, and related shipping fees. Sales of third-party brand and private brand pet food, pet products and shipping revenues are recorded when products are shipped, net of promotional discounts and refunds and allowances. Taxes collected from customers are excluded from net sales. Net sales is primarily driven by growth of new customers and active customers, and the frequency with which customers purchase and subscribe to our Autoship subscription program.
Previous wording
Thirteen Weeks Ended April 28, 2024 Compared to Thirteen Weeks Ended April 30, 2023
Current wording
Thirteen and Twenty-Six Weeks Ended July 28, 2024 Compared to Thirteen and Twenty-Six Weeks Ended July 30, 2023
Previous wording
Net sales for the thirteen weeks ended April 28, 2024 increased by $87.1 million, or 3.1%, to $2.9 billion compared to $2.8 billion for the thirteen weeks ended April 30, 2023. This increase was primarily driven by growth in customer spending from both new and existing customers, and the frequency with which customers purchase and subscribe to our Autoship subscription program. Net sales per active customer increased $49, or 9.6%, in the thirteen weeks ended April 28, 2024 compared to the thirteen weeks ended April 30, 2023, driven by growth across our healthcare and specialty businesses.
Current wording
Net sales for the thirteen weeks ended July 28, 2024 increased by $73.3 million, or 2.6%, to $2.9 billion compared to $2.8 billion for the thirteen weeks ended July 30, 2023. This increase was primarily driven by growth in customer spending from both new and existing customers, and the frequency with which customers purchase and subscribe to our Autoship subscription program. Net sales per active customer increased $33, or 6.2%, in the thirteen weeks ended July 28, 2024 compared to the thirteen weeks ended July 30, 2023, driven by growth across our healthcare and specialty businesses.
Previous wording
Cost of goods sold for the thirteen weeks ended April 28, 2024 increased by $26.0 million, or 1.3%, to $2.0 billion compared to $2.0 billion in the thirteen weeks ended April 30, 2023. This increase was primarily due to an increase in associated product, outbound freight, and shipping supply costs. The increase in cost of goods sold was lower than the increase in net sales on a percentage basis, reflecting supply chain efficiency gains across our fulfillment network.
Current wording
Cost of goods sold for the thirteen weeks ended July 28, 2024 increased by $18.2 million, or 0.9%, to $2.0 billion compared to $2.0 billion in the thirteen weeks ended July 30, 2023. This increase was primarily due to an increase in associated product, outbound freight, and shipping supply costs. The increase in cost of goods sold was lower than the increase in net sales on a percentage basis, reflecting supply chain efficiency gains across our fulfillment network.
Previous wording
Gross profit for the thirteen weeks ended April 28, 2024 increased by $61.1 million, or 7.7%, to $854.0 million compared to $792.9 million in the thirteen weeks ended April 30, 2023. This increase was primarily due to the year-over-year increase in net sales as described above. Gross profit as a percentage of net sales for the thirteen weeks ended April 28, 2024 increased by 130 basis points compared to the thirteen weeks ended April 30, 2023, primarily due to margin expansion across our consumables, healthcare and private brands businesses.
Current wording
Gross profit for the thirteen weeks ended July 28, 2024 increased by $55.1 million, or 7.0%, to $843.8 million compared to $788.7 million in the thirteen weeks ended July 30, 2023. This increase was primarily due to the year-over-year increase in net sales as described above. Gross profit as a percentage of net sales for the thirteen weeks ended July 28, 2024 increased by 120 basis points compared to the thirteen weeks ended July 30, 2023, primarily due to margin expansion across our healthcare, consumables, and private brands businesses.
Previous wording
Selling, general and administrative expenses for the thirteen weeks ended April 28, 2024 increased by $18.2 million, or 3.1%, to $602.6 million compared to $584.4 million in the thirteen weeks ended April 30, 2023. This was primarily due to an increase of $15.7 million in non-cash share-based compensation expense and related taxes as well as an increase of $5.0 million in facilities expenses and other general and administrative expenses, principally due to business growth and new initiatives at our corporate offices in Seattle, Washington, Boston, Massachusetts, and Plantation, Florida, as well as costs associated with the launch of operations in Canada, partially offset by a decrease of $2.5 million in fulfillment costs attributable to automation and supply chain efficiencies within our fulfillment network.
Current wording
Selling, general and administrative expenses for the thirteen weeks ended July 28, 2024 increased by $1.4 million, or 0.2%, to $621.3 million compared to $619.9 million in the thirteen weeks ended July 30, 2023. This was primarily due to an increase of $14.2 million in non-cash share-based compensation expense and related taxes, partially offset by a decrease of $7.9 million in facilities expenses and other general and administrative expenses attributable to lower corporate headcount as well as a decrease of $4.9 million in fulfillment costs attributable to automation and supply chain efficiencies within our fulfillment network.
Previous wording
Advertising and marketing expenses for the thirteen weeks ended April 28, 2024 increased by $3.1 million, or 1.7%, to $186.8 million compared to $183.7 million in the thirteen weeks ended April 30, 2023. Our marketing expenses increased due to additional investment in our lower and upper funnel marketing channels as well as expansion into Canada, contributing to new customer acquisition, customer retention, and an increase in wallet share from our large and stable customer base.
Current wording
Advertising and marketing expenses for the thirteen weeks ended July 28, 2024 increased by $5.0 million, or 2.7%, to $190.5 million compared to $185.5 million in the thirteen weeks ended July 30, 2023. Our marketing expenses increased due to additional investment in our lower and upper funnel marketing channels as well as expansion into Canada, contributing to new customer acquisition, customer retention, and an increase in wallet share from our large and stable customer base.
Previous wording
Interest income for the thirteen weeks ended April 28, 2024 increased by $6.5 million, to $14.5 million compared to interest income of $8.0 million in the thirteen weeks ended April 30, 2023. This increase was due to interest income generated by cash and cash equivalents and marketable securities exceeding interest expenses incurred.
Current wording
Interest income for the thirteen weeks ended July 28, 2024 increased by $4.0 million, to $12.9 million compared to interest income of $8.9 million in the thirteen weeks ended July 30, 2023. This increase was due to interest income generated by cash and cash equivalents and marketable securities exceeding interest expenses incurred.
Previous wording
Other expense for the thirteen weeks ended April 28, 2024 decreased by $8.1 million, to $0.8 million compared to other expense of $8.9 million in the thirteen weeks ended April 30, 2023. This decrease was primarily due to changes in the fair value of equity warrants and tax indemnification receivables, partially offset by foreign currency transaction losses.
Current wording
Other income for the thirteen weeks ended July 28, 2024 decreased by $27.7 million, to $1.5 million compared to other income of $29.2 million in the thirteen weeks ended July 30, 2023. This decrease was primarily due to changes in the fair value of equity warrants and foreign currency transaction losses, partially offset by changes in the fair value of and tax indemnification receivables and equity investments.
Previous wording
We finance our operations and capital expenditures primarily through cash flows generated by operations. Our principal sources of liquidity are expected to be our cash and cash equivalents, marketable securities, and our revolving credit facility. Cash and cash equivalents consist primarily of cash on deposit with banks and investments in money market funds, U.S. Treasury securities, certificates of deposit, and commercial paper. Cash and cash equivalents totaled $1.1 billion as of April 28, 2024, an increase of $532.4 million from January 28, 2024. Marketable securities consist primarily of vested equity warrants, equity investments, U.S. treasury securities, certificates of deposit, and commercial paper and totaled $3.5 million as of April 28, 2024, a decrease of $528.3 million from January 28, 2024.
Current wording
We finance our operations and capital expenditures primarily through cash flows generated by operations. Our principal sources of liquidity are expected to be our cash and cash equivalents, marketable securities, and our revolving credit facility. Cash and cash equivalents consist primarily of cash on deposit with banks and investments in money market funds, U.S. Treasury securities, certificates of deposit, and commercial paper. Cash and cash equivalents totaled $694.5 million as of July 28, 2024, an increase of $92.2 million from January 28, 2024. Marketable securities consist primarily of vested equity warrants, equity investments, U.S. treasury securities, certificates of deposit, and commercial paper and totaled $0.5 million as of July 28, 2024, a decrease of $531.3 million from January 28, 2024.
Previous wording
We believe that our cash and cash equivalents, marketable securities, and availability under our revolving credit facility will be sufficient to fund our working capital, capital expenditure requirements, and contractual obligations for at least the next twelve months. In addition, we may choose to raise additional funds at any time through equity or debt financing arrangements, which may or may not be needed for additional working capital, capital expenditures or other strategic investments. Our opinions concerning liquidity are based on currently available information. To the extent this information proves to be inaccurate, or if circumstances change, future availability of trade credit or other sources of financing may be reduced and our liquidity could be adversely affected. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled “Risk Factors” in Item 1A of our 10-K Report. Depending on the severity and direct impact of these factors on us, we may be unable to secure additional financing to meet our operating requirements on terms favorable to us, or at all.
Current wording
We believe that our cash and cash equivalents, marketable securities, and availability under our revolving credit facility will be sufficient to fund our working capital, capital expenditure requirements, and contractual obligations for at least the next twelve months. In addition, we may choose to raise additional funds at any time through equity or debt financing arrangements, which may or may not be needed for additional working capital, capital expenditures, share repurchases, or other strategic investments. Our opinions concerning liquidity are based on currently available information. To the extent this information proves to be inaccurate, or if circumstances change, future availability of trade credit or other sources of financing may be reduced and our liquidity could be adversely affected. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled “Risk Factors” in Item 1A of our 10-Q Report for the quarterly period ended April 28, 2024. Depending on the severity and direct impact of these factors on us, we may be unable to secure additional financing to meet our operating requirements on terms favorable to us, or at all.
Previous wording
Net cash provided by operating activities was $81.9 million for the thirteen weeks ended April 28, 2024, which primarily consisted of $66.9 million of net income, non-cash adjustments such as depreciation and amortization expense of $28.0 million and share-based compensation expense of $65.4 million, partially offset by a cash decrease of $79.3 million from working capital. Cash decreases from working capital were primarily driven by a decrease in other current liabilities and an increase in inventories, receivables, and other current assets, partially offset by an increase in payables.
Current wording
Net cash provided by operating activities was $205.3 million for the twenty-six weeks ended July 28, 2024, which primarily consisted of $366.0 million of net income, partially offset by $56.9 million of non-cash adjustments such as deferred income tax benefit of $275.7 million, share-based compensation expense of $147.0 million, and depreciation and amortization expense of $56.5 million, and a cash decrease of $90.0 million from working capital. Cash decreases from working capital were primarily driven by an increase in inventories and receivables, as well as a decrease in other current liabilities, partially offset by an increase in payables.
Previous wording
Net cash provided by operating activities was $148.7 million for the thirteen weeks ended April 30, 2023, which primarily consisted of $22.9 million of net income, non-cash adjustments such as depreciation and amortization expense of $28.9 million and share-based compensation expense of $48.6 million, and a cash increase of $30.0 million from working capital. Cash increases from working capital were primarily driven by an increase in payables and other current liabilities, partially offset by an increase in inventories, receivables, and other current assets.
Current wording
Net cash provided by operating activities was $307.3 million for the twenty-six weeks ended July 30, 2023, which primarily consisted of $43.1 million of net income, $173.9 million of non-cash adjustments such as share-based compensation expense of $114.5 million and depreciation and amortization expense of $56.7 million, and a cash increase of $102.5 million from working capital. Cash increases from working capital were primarily driven by an increase in other current liabilities and payables, partially offset by an increase in inventories, receivables, and other current assets.
Previous wording
Net cash provided by investing activities was $505.7 million for the thirteen weeks ended April 28, 2024, primarily consisting of $535.0 million for the maturities of marketable securities, partially offset by $29.3 million for capital expenditures related to the launch of new and future pharmacy facilities, veterinary clinics, and fulfillment centers as well as additional investments in IT hardware and software.
Current wording
Net cash provided by investing activities was $477.2 million for the twenty-six weeks ended July 28, 2024, primarily consisting of $538.4 million for the maturities of marketable securities, partially offset by $61.2 million for capital expenditures related to the launch of new and future pharmacy facilities, veterinary clinics, and fulfillment centers as well as additional investments in IT hardware and software.
Previous wording
Net cash used in investing activities was $66.0 million for the thirteen weeks ended April 30, 2023, primarily consisting of $44.1 million for the purchase of marketable securities, net of maturities and $21.6 million for capital expenditures related to the launch of new and future fulfillment centers and additional investments in IT hardware and software.
Current wording
Net cash used in investing activities was $172.4 million for the twenty-six weeks ended July 30, 2023, primarily consisting of $92.8 million for the purchases of marketable securities, net of maturities and $79.2 million for capital expenditures. Capital expenditures were related to the launch of new and future fulfillment centers and additional investments in IT hardware and software.
Previous wording
Net cash used in financing activities was $55.1 million for the thirteen weeks ended April 28, 2024 primarily consisting of $54.8 million for income taxes paid for, net of proceeds from, the parent reorganization transaction as well as principal repayments of finance lease obligations.
Current wording
Net cash used in financing activities was $590.1 million for the twenty-six weeks ended July 28, 2024 primarily consisting of $532.0 million for repurchases of common stock, $57.6 million for income taxes paid for, net of proceeds from, the parent reorganization transaction, and principal repayments of finance lease obligations.
Previous wording
Net cash used in financing activities was $4.1 million for the thirteen weeks ended April 30, 2023, and consisted of payments made pursuant to the tax sharing agreement with related parties, payment of debt modification costs, and principal repayments of finance lease obligations.
Current wording
Net cash used in financing activities was $8.1 million for the twenty-six weeks ended July 30, 2023, and consisted of payments made pursuant to the tax sharing agreement with related parties, principal repayments of finance lease obligations, and payment of debt modification costs.
Previous wording
We have a senior secured asset-based credit facility (the “ABL Credit Facility”) which matures on August 27, 2026 and provides for non-amortizing revolving loans in the aggregate principal amount of up to $800 million, subject to a borrowing base comprised of, among other things, inventory and sales receivables (subject to certain reserves). The ABL Credit Facility provides the right to request incremental commitments and add incremental asset-based revolving loan facilities up to $250 million, subject to customary conditions. We are required to pay a 0.25% per annum commitment fee with respect to the undrawn portion of the commitments, which is generally based on average daily usage of the facility. Based on our borrowing base as of April 28, 2024, which is reduced by standby letters of credit, we had $759.4 million of borrowing capacity under the ABL Credit Facility. As of April 28, 2024 and January 28, 2024, we had no outstanding borrowings under the ABL Credit Facility, respectively.
Current wording
We have a senior secured asset-based credit facility (the “ABL Credit Facility”) which matures on August 27, 2026 and provides for non-amortizing revolving loans in the aggregate principal amount of up to $800 million, subject to a borrowing base comprised of, among other things, inventory and sales receivables (subject to certain reserves). The ABL Credit Facility provides the right to request incremental commitments and add incremental asset-based revolving loan facilities up to $250 million, subject to customary conditions. We are required to pay a 0.25% per annum commitment fee with respect to the undrawn portion of the commitments, which is generally based on average daily usage of the facility. Based on our borrowing base as of July 28, 2024, which is reduced by standby letters of credit, we had $760.2 million of borrowing capacity under the ABL Credit Facility. As of July 28, 2024 and January 28, 2024, we did not have any outstanding borrowings under the ABL Credit Facility, respectively.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Net sales for the twenty-six weeks ended July 28, 2024 increased by $160.4 million, or 2.9%, to $5.7 billion compared to $5.6 billion for the twenty-six weeks ended July 30, 2023. This increase was primarily driven by growth in customer spending from both new and existing customers, and the frequency with which customers purchase and subscribe to our Autoship subscription program. Net sales per active customer increased $33, or 6.2%, in the twenty-six weeks ended July 28, 2024 compared to the twenty-six weeks ended July 30, 2023, driven by growth across our healthcare and specialty businesses.
Current report — wording carried from elsewhere
Cost of goods sold for the twenty-six weeks ended July 28, 2024 increased by $44.1 million, or 1.1%, to $4.0 billion compared to $4.0 billion in the twenty-six weeks ended July 30, 2023. This increase was primarily due to an increase in associated product, outbound freight, and shipping supply costs. The increase in cost of goods sold was lower than the increase in net sales on a percentage basis, reflecting supply chain efficiency gains across our fulfillment network.
Current report — wording carried from elsewhere
Gross profit for the twenty-six weeks ended July 28, 2024 increased by $116.3 million, or 7.4%, to $1.7 billion compared to $1.6 billion in the twenty-six weeks ended July 30, 2023. This increase was primarily due to the year-over-year increase in net sales as described above. Gross profit as a percentage of net sales for the twenty-six weeks ended July 28, 2024 increased by 120 basis points compared to the twenty-six weeks ended July 30, 2023, primarily due to margin expansion across our healthcare, consumables, and private brands businesses.
Current report — wording carried from elsewhere
Advertising and marketing expenses for the twenty-six weeks ended July 28, 2024 increased by $8.1 million, or 2.2%, to $377.3 million compared to $369.2 million in the twenty-six weeks ended July 30, 2023. Our marketing expenses increased due to additional investment in our lower and upper funnel marketing channels as well as expansion into Canada, contributing to new customer acquisition, customer retention, and an increase in wallet share from our large and stable customer base.
Current report — wording carried from elsewhere
Interest income for the twenty-six weeks ended July 28, 2024 increased by $10.5 million, to $27.4 million compared to interest income of $16.9 million in the twenty-six weeks ended July 30, 2023. This increase was due to interest income generated by cash and cash equivalents and marketable securities exceeding interest expenses incurred.