During the first-quarter earnings call, the company’s executives stated that the consumer pet environment has become increasingly challenging and that customers have become more cautious.
- For the first quarter, Chewy reported net sales of $3.36 billion and adjusted earnings per share of $0.43, both in line with estimates.
- Chewy cut its full-year sales outlook to a range of $13.4 billion to $13.55 billion, down from $13.6 billion to $13.75 billion.
- For the second quarter, the company expects adjusted earnings per share of $0.36 and revenue in the $3.3 billion to $3.33 billion range.
Shares of Chewy (CHWY) attracted significant investor attention on Wednesday after the company’s executives flagged that the online pet-supply retailer’s business is under pressure and is expected to remain so in the near term.
At the time of writing, CHWY stock was down nearly 1%, wiping out the earlier gains, and was among the top-ten-trending tickers on Stockwits.
During the first-quarter (Q1) earnings call, the company executives noted that the consumer pet environment has become increasingly challenging and that customers have become more cautious, avoiding non-essential spending on their pets, driven in part by high fuel prices and broader macroeconomic pressures. Chewy pointed out that conditions weakened mainly in the latter part of Q1.
The executives noted that the firm is seeing more pressure on discretionary attachment and premiumization behavior across portions of our customer base. They also added that it’s no longer prudent to embed a meaningful acceleration in consumer spending into the firm’s outlook, given the current operating environment
In Q1, the company reported a 7.7% increase in net sales to $3.36 billion and adjusted earnings per share (EPS) of $0.43, both of which matched the consensus estimates polled by Fiscal AI.
The company highlighted that the “new-to-Chewy” customer acquisition is also softening, which led it to guide net active customer additions for fiscal 2027 towards the lower end of its previously provided range of 150,000 to 250,000 net adds per quarter.
Furthermore, it cut its full-year sales outlook to a range of $13.4 billion to $13.55 billion, down from $13.6 billion to $13.75 billion, and below the $13.66 billion consensus estimate polled by Fiscal AI.
For the second quarter, Chewy forecasted adjusted EPS of $0.36, a tad short of the $0.40 estimate, while revenue is forecast in the $3.3 billion to $3.33 billion range, below the $3.37 billion estimate.
On Stocktwits, retail sentiment surrounding the CHWY stock turned ‘bullish’ from ‘bearish’ amid ‘high’ message volumes over the last 24 hours.
One user cheered the report and noted they are looking for an entry point to establish a position.
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CHWY stock has fallen by more than 40% so far this year and 57% over the last 12 months, underperforming the S&P 500.
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