Chewy Inc (CHWY)
Interest coverage
| Jan 31, 2025 | Oct 31, 2024 | Oct 27, 2024 | Jul 31, 2024 | Jul 28, 2024 | Apr 30, 2024 | Apr 28, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 108,347 | 157,742 | 206,607 | 255,472 | 206,855 | 198,683 | 83,288 | -29,656 | -7,914 | -26,617 | 33,109 | 82,054 | 70,328 | 52,140 | 31,052 | 37,681 | 47,333 | 63,191 | -11,443 | -96,973 |
| Interest expense (ttm) | US$ in thousands | 5,537 | 5,722 | 5,704 | 5,686 | 5,125 | 4,564 | 4,106 | 3,648 | 3,597 | 3,546 | 3,531 | 9,200 | 8,974 | 8,725 | 8,510 | 2,654 | 2,584 | 2,281 | 2,058 | 1,792 |
| Interest coverage | 19.57 | 27.57 | 36.22 | 44.93 | 40.36 | 43.53 | 20.28 | -8.13 | -2.20 | -7.51 | 9.38 | 8.92 | 7.84 | 5.98 | 3.65 | 14.20 | 18.32 | 27.70 | -5.56 | -54.11 |
January 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $108,347K ÷ $5,537K
= 19.57
Interest coverage ratio indicates the company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio is favorable as it suggests the company is generating enough earnings to cover its interest charges.
Based on the data provided for Chewy Inc, the interest coverage ratio has fluctuated over time. The company had negative interest coverage ratios of -54.11 and -5.56 in May 1, 2022, and July 31, 2022, respectively, indicating that the company's earnings were insufficient to cover its interest expenses during those periods.
However, the interest coverage ratio improved significantly in subsequent periods, with ratios of 27.70, 18.32, and 14.20 reported in October 30, 2022, October 31, 2022, and January 29, 2023, respectively. These ratios indicate that Chewy's earnings were more than sufficient to cover its interest expenses during these periods.
The interest coverage ratio experienced some variability in the following quarters but generally remained at acceptable levels above 1, indicating that Chewy was able to meet its interest obligations. It is important for investors and creditors to closely monitor the interest coverage ratio as it reflects the company's ability to service its debt and manage its financial obligations.
Peer comparison
Jan 31, 2025