Chewy Stock Falls After Disappointing Second-Quarter Results Despite Raised Guidance
Shares of Chewy (CHWY) fell by 11% following its second-quarter earnings report, despite the company meeting revenue estimates and raising full-year guidance. Revenue grew to $3.33 billion, slightly above expectations at $3.32 billion, but organic growth was weaker when excluding recent acquisitions. Adjusted EPS improved from $0.33 to $0.36 as expected. Chewy raised its revenue forecast for the year and adjusted EBITDA margin guidance due in part to new acquisitions rather than core business strength. However, concerns over weak consumer demand and sluggish discretionary spending overshadowed these positive developments on the earnings call. The company's strategy of increasing autoship sales has limited growth potential from one-off purchases. The pet industry is maturing after a post-pandemic boom in adoptions led to unsustainable growth rates. Chewy now resembles a slower-growth consumer staples stock rather than its previous disruptive, high-growth image.
Tickers: $CHWY
Topics: consumer_staples pet_products retail