Here is why Chewy shares dropped 15%

Chewy Inc. (NYSE: CHWY) was down 15% after releasing its fiscal Q4 and FY 2021 financial results for the period ended  January 30, 2022.

Chewy grew net sales by 24% in 2021

CEO Sumit Singh said:

For the fourth quarter, the company reported sales of $2.39 billion, a 17% YoY increase. The gross margin was 25.4%, dropping 170 basis points from a year ago. Net loss in Q4 2021 was $63.6 million, and it includes a stock-based compensation charge of $15.8 million.

Chewy posted a net margin of 2.7% in Q4 2021, a drop of 370 basis points from last year. Adjusted EBITDA loss was $28.1 million, which was a drop from $88.9 million a year before. Year over year adjusted EBITDA margin dropped 420 basis points to 1.2%.

The company reported 24% YoY growth in net sales to $8.89 billion for the entire year. The gross margin was 26.7%, an increase of 120 basis points from a year ago. Also, the company had a net loss of around $73.8 million, including a stock-based compensation impairment of $85.3 million. Adjusted EBITDA was $78.6 million dropping from $6.6 million in Q4 2020. In addition, Chewy reported an adjusted EBITDA margin of $0.9%, which was a YoY drop of 30 basis points.

Chewy had net sales per active customer of $430

Singh added: