Chewy Stock Drops Despite Strong Q2 Earnings and Raised Guidance
Shares of Chewy (CHWY) fell by over 11% in early trading following its second-quarter earnings report, despite the company exceeding sales expectations and raising full-year guidance. Analysts attributed part of the positive results to a one-time tariff benefit rather than sustained operational strength, which may have dampened investor enthusiasm. Chewy reported key metrics including 7.3% revenue growth (5.7% organic), an increase in active customers by 3.8%, and triple-digit growth for its Chewy Vet Care clinics. The company also raised guidance to a projected annual sales growth of between 6.8% and 7.7%. Despite these results, the stock declined as investors focused on potential one-time gains rather than long-term fundamentals. CEO Sumit Singh noted that while consumer spending in the pet market remained under pressure, Chewy continued outperforming broader industry trends by two to three times. The company is currently trading at a forward P/E of 14 and EBITDA multiple of 10, with recurring revenue from Autoship now accounting for over 84% of sales.
Tickers: $CHWY