Chewy added a fourth automated fulfillment center in Nashville, Tennessee, to its growing network this quarter, CEO Sumit Singh said during an earnings call last week.
The addition is part of the pet retailer’s larger goal to shorten shipping distances and curb costs.
“Every time we launch a fulfillment center, we see some deleverage in SG&A in the quarter that we launched it in and the following quarter,” Singh told analysts. “And then, obviously, we’ve talked about the benefits it provides over the long term, so that’s what you would expect to happen again in the second quarter.”
Chewy has been shifting volumes to its automated centers, and in March announced plans to shutter two of its oldest fulfillment centers in Pennsylvania and Nevada. The pet retailer’s other automated FC locations include Missouri, Nevada and Pennsylvania.
To further reduce costs and improve delivery times, Chewy has also been investing in Chewy Freight Services. The in-house linehaul fleet initially launched in Pheonix during Q1 of 2022.
