Chewy (CHWY) was on an upswing in pre-market trading on Wednesday following the company’s better-than-expected earnings for the second quarter. The online pet food retailer reported adjusted earnings of $0.24 per share, marking an increase of $0.09 year-over-year. This figure notably surpassed analysts’ expectations, which had anticipated earnings of $0.02 per share.
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In addition to strong earnings, the company generated revenues of $2.86 billion, reflecting a 2.6% year-over-year increase. These revenues were consistent with analysts’ expectations.
Chewy’s Management Is Upbeat about Q2 Results
Transitioning to management’s perspective, Sumit Singh, CEO of Chewy, remarked that the Q2 results demonstrated another quarter of strong execution, with net sales reaching the high end of the company’s guidance. Singh highlighted that customer engagement is on the rise, as evidenced by the company’s 20 million active customers, which grew sequentially during the quarter. Additionally, the company achieved record net sales per active customer of $565.
Analysts Believe CHWY’s Fundamentals Remain Intact
Looking forward, Wall Street analysts remain confident in Chewy’s fundamentals. According to TipRanks’ “Bulls Say, Bears Say,” analysts who are bullish on CHWY stock see a “durable margin expansion story and potential for revenue acceleration.” They also view the company’s strategic initiatives, such as the rollout of vet care clinics and positive user trends, as key factors that bolster a positive outlook for the stock.
Is CHWY Stock a Good Buy?
Analysts remain cautiously optimistic about CHWY stock, with a Moderate Buy consensus rating based on 12 Buys, nine Holds, and one Sell. Year-to-date, Chewy has increased by more than 9%, and the average CHWY price target of $27.94 implies an upside potential of 8% from current levels. These analyst ratings are likely to change following CHWY’s results today.
