Chewy (CHWY) Stock Falls 5% as Revenue Outlook Disappoints

  • Chewy (CHWY) stock is dropping after posting weak revenue guidance in the second quarter.
  • The company also missed revenue estimates for the period.
  • That’s despite Chewy’s earnings per share (EPS) beating expectations.
The Chewy logo on a banner at the New York Stock Exchange representing CHWY Stock.

Source: Chie Inoue / Shutterstock.com

Chewy (NYSE:CHWY) stock is falling on Wednesday following the release of the company’s second-quarter earnings report.

The reason CHWY stock is falling today? Primarily, the guidance cut in the report. Chewy now expects 2022 revenue to range between $9.9 billion and $10 billion. That would have it missing Wall Street’s estimate of $10.41 billion for the year.

Chewy also has weak revenue guidance for Q3 2022. The company forecasts revenue between $2.44 billion and $2.46 billion, missing analysts’ estimate of $2.61 billion for the quarter.

Guidance Drops CHWY Stock Despite Solid Earnings

That poor guidance comes despite positive earnings results from Chewy. For the period, the company saw earnings per share (ESPS) of 5 cents. That’s better than the -11 cents per share Wall Street had expected. It’s also a positive change from the -4 cents per share reported in Q2 2021.

Chewy also brought in revenue of $2.43 billion for Q2. That’s just below the $2.45 billion analysts were looking for this quarter, even if it is a 12.8% increase year-over-year (YOY) from $2.16 million.

Chewy CEO Sumit Singh and CFO Mario Marte said the following in the company’s shareholder letter:

“We are proud of our second quarter performance and ability to deliver double-digit top-line growth and margin expansion during a period when accelerating inflation placed incremental pressure on consumers. Across the pet category, pricing escalated throughout the second quarter. Pet category consumers responded to growing economic uncertainty by curtailing some of their purchase activity, leading to industrywide declines in unit volume.”

CHWY stock is down 5% as of Wednesday morning.

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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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