Chewy Stock Falls 50% in a Year; Is the Latest Dip a Buying Opportunity?
Chewy (CHWY) has seen its stock price drop by more than half over the past year, with shares falling another 11% following earnings released on Sept. 9. Although Chewy's results were within guidance, they were considered low-quality due to factors like tariff refunds and vendor-funded activities. The company reported solid revenue growth of nearly 7%, reaching $3.33 billion for the quarter, driven by its Autoship program and steady consumables sales. Chewy is focusing on improving customer retention through a redesigned Chewy+ loyalty program and leveraging automation and AI to reduce costs and improve efficiency. The company also highlighted strong performance in healthcare services like Chewy Vet Care and Modern Animal. Despite these efforts, it warned of continued industry headwinds due to stressed consumers and expects the pet sector to remain under pressure for the rest of 2024. Looking ahead, Chewy forecasts Q3 revenue growth between 6.6% and 7.7%, with gross margins expected to decline sequentially.
Tickers: $CHWY
Topics: AI adoption consumer behavior cost efficiency earnings revenue growth