Chewy was one of our favorite Covid plays. We featured the name on our Coronavirus Shopping List MegaTrends Report, delivered to clients at the end of March...when shares were around $36. Since then, shares have more than doubled in value. What do we think now?
Here's what we know:
Mention volume tempered last quarter after a huge Covid-induced surge, and now is on the upswing. In 20Q3, consumers talking about Chewy increased +22% QoQ, +9% YoY. 20Q4 shows continued growth: +4% QoQ.
Chewy struggles with churn. Chewy's estimated churn rate is relatively high vs. online retail, at 33% (40% for first-year customers). Online retail average churn is 22%. LikeFolio's Chewy cancellation mentions increased +4% YoY in the last quarter.
Autoship is extremely significant. Autoship sales account for a major portion of total sales ($1.16 billion out of $1.7 billion last quarter). LikeFolio recorded a massive influx of Autoship customers from March-May. Early signs reported by Chewy suggest new customers are surpassing its existing base, and each year a user sticks around, the more the user spends. Investors will have a close eye on the number of active customers, and NSPAC (net sales per active customer).
The company has a high bar to clear as shares trade near all-time highs into earnings. If you play, stay risk defined.
Hasbro (HAS) - Nerf
Yesterday, a video went viral depicting an imposter Santa Clause refusing a request for Hasbro’s (HAS) ever-popular toy, the Nerf Gun, and bringing the hopeful tyke to tears.
LikeFolio Purchase Intent Mentions for the Nerf brand already show an outpouring of support, with demand trending...