What made Chewy shares slip 10% in extended trading?

By:
on Aug 30, 2022
Listen
  • Chewy reports weaker-than-expected sales for its fiscal second quarter.
  • The pet food and products retailer trims its guidance for the full year.
  • Chewy shares are now down more than 40% versus the start of 2022.

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

Shares of Chewy Inc (NYSE: CHWY) are down 10% in extended trading after the pet food and products company reported weaker-than-expected sales for its fiscal second quarter and lowered full-year guidance.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

Chewy Q2 financial highlights

Copy link to section
  • Swung to a $22.3 million profit or 5 cents a share
  • Sales went up 13% year-on-year to $2.43 billion
  • Consensus was 12 cents of loss on $2.45 billion in sales
  • Adjusted EBITDA margin climbed 230 basis points
  • Ended with 20.5 million active customers (up 2.0%)
  • Net sales per active customer jumped 14% to $462

CEO Singh’s remarks

Copy link to section

In the same quarter last year, Chewy was $16.7 million in loss or 4 cents a share. In the earnings press release, CEO Sumit Singh said:

Our superior customer value proposition, strength in resilient demand categories such as food and healthcare, and recurring Autoship business enabled us to continue taking market share and extend our leadership position in recession-resistant pet category.

Chewy shares are now down more than 40% for the year.

Chewy shares down on trimmed guidance

Copy link to section

The online retailer also lowered its outlook for the full year, citing a shift away from discretionary spending as inflation continues to run at a multi-decade high.

It now forecasts $9.9 billion to $10 billion in net sales versus $10.2 billion (at the lower end of its range) that it had guided for earlier. In Q3, it expects revenue to fall between $2.44 billion and $2.46 billion.

The price action in response to the stock market news, however, might have created a “buying opportunity” considering the Wall Street sees upside to $46 (on average) in Chewy shares.

USA North America Retail Stock Market World