Chewy Shares Fall After Reporting Second Quarter Financial Results

Pet supply retailer Chewy saw its shares slide on Tuesday after reporting second quarter financial results.

Despite reporting a narrower than expected loss during the quarter, shares dropped 2% in after-hours trading.

For the quarter, the company reported a loss of 10 cents a share while analysts had expected a loss of 11 cents a share. Chewy reported net sales of $1.15 billion, which also topped Wall Street estimates of $1.13 billion. Sales grew 43% from last year.

Chewy reported 12 million active customers for the quarter, representing an increase of 39% YOY. Auto-ship customers also represented 69% of its sales.

Additionally the company has raised its outlook for revenue in the fiscal year. Chewy now projects between $4.75 billion and $4.80 billion, compared with estimates of $4.73 billion. For the third quarter, revenue is expected to be in the range of $1.19 billion to $1.21 billion, exceeding the $1.17 billion in revenue
analysts expected.

“I’d point out the fact that we’re playing in a very large market size, $70 billion. I’d also point to the fact that it’s the early days for e-commerce. [The company is] 14% penetrated but we believe this number could be 25% or 30% in the next few years,” said CEO Sumit Singh on CNBC’s “Closing Bell.”

“On average in the U.S., active pet spend per household is $700 or $800 … so we’re capturing 40% of that share of wallet,” said Singh.
Shares of Chewy have gained 37.5% since its initial public offering in June.

Disclaimer: We have no position in Chewy Inc. (NYSE: CHWY) and have not been compensated for this article.