Chewy Shares Fall Despite Beating Earnings Estimates Due to Disappointing Free Cash Flow
Chewy Inc (NYSE:CHWY) reported second-quarter results that beat revenue and earnings estimates, but its shares fell nearly 9% due to a significant miss in free cash flow. Revenue rose 7.3% year-over-year to $3.33 billion, exceeding forecasts of $3.32 billion, while adjusted EPS came in at $0.36, up from the prior year. Adjusted EBITDA also outperformed expectations with a 23.7% increase to $226.7 million. Despite these positive metrics, free cash flow dropped by 15.5% to $89.5 million, far below analysts' projections of $133 million. Jefferies analysts noted that while Chewy's core business appears resilient and its strategic investments in areas like veterinary care show promise, the results were partially driven by one-time items and timing factors rather than sustainable growth. The company is also reinvesting heavily to expand into new markets such as equestrian products. While these moves are seen as strategically sound, their impact on future earnings remains uncertain.
Tickers: $CHWY