Chewy Shares Drop Over Free Cash Flow Miss Despite Raised Outlook; Petco and Freshpet React Differently
Chewy (NYSE:CHWY) fell more than 11% after reporting weaker-than-expected free cash flow of $89.5 million, a decline of 15.5% year over year, despite raising its full-year sales guidance and beating revenue estimates in Q2 2027. The stock's sharp drop overshadowed positive metrics such as Autoship contributing to 84.6% of total revenue and serving 21.7 million active customers. The sell-off extended across the pet retail sector, with Petco (NASDAQ:WOOF) falling nearly 6%. Freshpet (NASDAQ:FRPT), however, bucked the trend by rising slightly on strong quarterly growth in sales and an updated outlook for continued expansion. The broader market also saw a modest decline as investors remained cautious. Chewy's CFO attributed the free cash flow shortfall to timing-related factors tied to integration costs from recent acquisitions like SmartPak and Modern Animal, while analysts noted that heavy reinvestment could delay returns.
Topics: Chewy Free Cash Flow Miss Freshpet Petco Stock Decline