Key Takeaways
- Full-year revenue outlook reduced to $13.4B–$13.55B from previous guidance of $13.6B–$13.75B
- First-quarter adjusted earnings reached 43 cents per share, matching analyst forecasts; revenue climbed 7.7% to $3.36B
- Second-quarter EPS projection of approximately 36 cents fell short of the 40-cent consensus estimate
- Customer base expanded 3.6% to 21.5 million users; average revenue per customer increased 2.4% to $597
- Shares surged to $22.28 during premarket hours before declining to $20.38
Shares of Chewy experienced a volatile premarket session Wednesday following the online pet retailer’s first-quarter earnings report and announcement of a lowered annual revenue forecast.
The equity peaked at $22.28 during early premarket activity before retreating to $20.38, representing a decline of approximately 2.5% as markets absorbed the mixed financial update.
First-quarter revenue totaled $3.36 billion, marking a 7.7% year-over-year increase and narrowly surpassing Wall Street’s $3.35 billion projection. Adjusted earnings per share registered at 43 cents, aligning precisely with analyst consensus.
The company posted net income of $94.8 million, translating to 23 cents per share, representing a significant improvement from $62.4 million, or 15 cents per share, recorded in the comparable year-ago period.
The platform’s active customer count grew 3.6% to reach 21.5 million. Average revenue generated per active customer advanced 2.4% to $597.
Chief Executive Sumit Singh highlighted that Chewy continues capturing market share and acquiring new customers even as the operating environment becomes more challenging. He emphasized that the company remains focused on margin expansion and profitability enhancement.
Forward Guidance Shows Weakness Across Metrics
While the first quarter exceeded modest expectations, the company’s forward-looking statements painted a less optimistic picture. Chewy revised its full-year revenue projection downward to $13.4B–$13.55B from its previous estimate of $13.6B–$13.75B. Wall Street analysts had been anticipating $13.65B.
For the second quarter, the company projected adjusted earnings of approximately 36 cents per share on revenue between $3.3B and $3.33B. Analyst expectations stood at 40 cents per share and $3.36B in revenue — meaning Chewy missed on both metrics.
The company did reaffirm its adjusted EBITDA margin forecast of 6.6% to 6.8% for the complete fiscal year.
The reduced outlook didn’t catch everyone off guard. Several weeks prior to the earnings release, Singh had warned that consumers were experiencing greater financial strain compared to earlier in the year.
Industry-Wide Challenges Already Emerging in Pet Market
These pressures have been mounting throughout the pet care industry. Zoetis, a major animal health company, recently disclosed disappointing quarterly results and slashed its own guidance, pushing its stock to multi-year lows.
Zoetis CEO Kristin Peck cited “increased price sensitivity” among pet owners — mirroring the same macroeconomic challenges Singh subsequently referenced.
This industry context had already made investors wary ahead of Chewy’s quarterly announcement. The first-quarter performance, though unremarkable, at least managed to exceed the diminished expectations the market had established.
Chewy reaffirmed its full-year adjusted EBITDA margin target range of 6.6% to 6.8%.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
