Here's What 2 Analysts Think About Chewy's Earnings Beat

Chewy Inc CHWY reported profits on Thursday, paying an EPS of one cent on $2.53 billion in revenue, compared to analysts' expectations of a six-cent loss on $2.46 billion in revenue.

Analysts at Needham & Company and RBC Capital Markets issued notes to investors on Friday, citing the company's $2.3 million profit as a pleasant surprise compared to the $33 million loss analysts were expecting.

The RBC Capital Analyst: Steven Shemesh at RBC maintained the firm's Outperform rating on the stock with a $56 price target.

The RBC Takeaway: Shemesh was most encouraged by Chewy's sustained momentum in consumables (up 17.8% year-over-year) and noted that Chewy likely took incremental market share from its peers.

“We’re encouraged by this [earnings] print and expect continued sequential progress as the Company distances itself from COVID,” the analyst wrote.

The Needham Analyst: Anna Andreeva at Needham reiterated a Buy rating on the stock and issued a price target of $55.

The Needham Takeaway: Andreeva maintained the firm's 12% growth estimate for Chewy for 2023, saying that between supply chain/logistics, sponsored ads, insurance and a new private label brand, Chewy had plenty of initiatives to drive sales and margins.

For the earnings print, Needham said Chewy gave the firm “everything they could ask for.”

“Positive net ads (first time in 2 quarters), resilience in NSPAC (6th quarter of double-digit gains), less bad Hardgoods, big beat on GM (continuation of positive price/cost delta, efficiencies in outbound freight/supply chain) and SG&A leverage,” Needham wrote to investors.

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CHWY Price Action: Shares of Chewy are trading 5.65% higher to $44.34, according to data from Benzinga Pro. The stock has a 52-week high of $61.47, and a 52-week low of $22.22.

Photo: Chie Inoue via Shutterstock