Chewy’s adjusted EPS of $0.20 fell short of the expected $0.23, causing a 2.5% stock decline.
The company reported a 4.8% year-over-year revenue growth to $2.88 billion, slightly above projections.
Net income improved significantly to nearly $4 million from a $35 million loss the previous year.

Chewy Inc. (NYSE:CHWY) is a leading online retailer specializing in pet supplies, competing with giants like Petco and Amazon. Arun Sundaram from CFRA has set a price target of $39 for Chewy, indicating a potential upside of 16.52% from its current price of $33.47.

Despite the optimistic outlook, Chewy’s stock saw a 2.5% decline post the announcement of its third-quarter financial results. The company’s adjusted earnings per share (EPS) of $0.20 missed the analyst expectations of $0.23, attributed to a decrease in active customers and a 3.3% increase in operating expenses to $818.2 million.

However, Chewy’s revenue experienced a positive trajectory, growing by 4.8% year-over-year to $2.88 billion, slightly above the projections. The company also saw nearly 5% net sales growth, with net sales per active customer increasing by 4.2% to $567. Autoship customer sales, a crucial metric for Chewy, rose by 8.7% to $2.30 billion, showcasing strong customer loyalty and recurring revenue.

Despite a 0.5% decline in active customers to 20.16 million, Chewy managed to add about 200,000 net new customers, totaling 20.2 million. The company’s gross margin improved to 29.3%, and it reported a net income of nearly $4 million, marking a significant turnaround from a $35 million loss in the same period last year. However, the lower-than-expected profits contributed to the stock’s recent decline.

CEO Sumit Singh highlighted Chewy’s continued positive momentum, with topline growth exceeding their net sales guidance range. The company has raised its full-year sales outlook, reflecting a more optimistic future view. Despite recent stock price fluctuations, Chewy’s market capitalization of approximately $13.65 billion underscores its robust position in the pet supply industry.