Chewy Stock Is Moving Lower Thursday: What's Going On?

Chewy Inc CHWY shares are trading lower Thursday after the company reported mixed financial results and cut full-year guidance. Several analysts also lowered price targets following the print. 

• Q3 Revenue: $2.74 billion missed estimates of $2.76 billion
• Q3 EPS: 15 cents beat estimates for a 6 cent loss

Sales were up 8.2% on a year-over-year basis. Gross margin increased 10 basis points year-over-year to 28.5%. 

The company ended the quarter with 20.3 million active customers, down 1.3% on a year-over-year basis. Net sales per active customer were up 13.8% year-over-year to $543. 

"Chewy continues to gain market share, with third quarter net sales increasing 8% against industry growth in the low single digits," said Sumit Singh, CEO of Chewy.

"Our team also continues to execute admirably, as reflected by another strong quarter of 28.5% gross margin and 3.0% adjusted EBITDA margin profitability."

Outlook: Chewy sees fourth-quarter net sales of $2.78 billion to $2.8 billion. The company also lowered full-year 2023 net sales guidance from a range of $11.15 billion to $11.35 billion to a new range of $11.08 billion to $11.1 billion.

Chewy announced that it appointed David Reeder as CFO, effective Feb. 14, 2024.

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Analyst Changes:

• Barclays analyst Trevor Young maintained Chewy with an Equal-Weight and lowered the price target from $20 to $19.
• Needham analyst Anna Andreeva maintained Chewy with a Buy and lowered the price target from $45 to $20.
• Raymond James analyst Rick Patel maintained Chewy with an Outperform and lowered the price target from $24 to $20.
• JMP Securities analyst Nicholas Jones maintained Chewy with a Market Outperform and lowered the price target from $43 to $28.
• Morgan Stanley analyst Lauren Schenk maintained Chewy with an Overweight and lowered the price target from $28 to $27.

CHWY Price Action: Chewy shares were down 11.2% at $17.19 at the time of publication, according to Benzinga Pro.

Photo: Radovan Zierik from Pixabay.