Key Takeaways
- Full-year revenue outlook reduced to $13.4B–$13.55B from previous $13.6B–$13.75B range
- First-quarter adjusted earnings of 43 cents per share matched Wall Street consensus
- Second-quarter EPS guidance of ~36 cents falls short of the 40 cents analysts projected
- Customer base expanded 3.6% year-over-year to reach 21.5 million active users
- Shares briefly jumped to $22.28 before reversing to $20.38 in early trading
Shares of the online pet products retailer experienced volatile premarket movement Wednesday following the release of first-quarter financial results alongside a downward revision to annual revenue projections.
The stock initially surged to $22.28 during early premarket hours but subsequently declined to $20.38, representing approximately a 2.5% decrease as investors processed the mixed signals.
First-quarter revenue reached $3.36 billion, marking a 7.7% increase from the year-ago period and narrowly exceeding the $3.35 billion consensus estimate. The company’s adjusted earnings per share of 43 cents aligned precisely with analyst forecasts.
The quarter delivered net income of $94.8 million, translating to 23 cents per share, representing significant growth from $62.4 million, or 15 cents per share, recorded in the comparable quarter last year.
The company’s active customer count climbed 3.6% to 21.5 million. Meanwhile, average revenue per active customer increased 2.4% to $597.
Chief Executive Sumit Singh emphasized that Chewy continues capturing market share and attracting new customers even amid headwinds. He reinforced the company’s commitment to profitability expansion.
Revenue Projections Lowered for Remainder of Year
While first-quarter performance exceeded modest expectations, the forward-looking guidance disappointed investors. The company reduced its full-year revenue projection to a range of $13.4B–$13.55B, down from the previously communicated $13.6B–$13.75B target. Wall Street had anticipated approximately $13.65B.
For the second quarter, management projected adjusted earnings per share of roughly 36 cents on revenue between $3.3B and $3.33B. Analyst expectations had called for 40 cents per share and $3.36B in revenue — making both metrics misses.
The company maintained its adjusted EBITDA margin forecast of 6.6% to 6.8% for fiscal 2025.
The weakened outlook didn’t catch everyone off guard. Weeks ahead of the earnings release, Singh had already signaled that consumers were experiencing greater financial strain compared to earlier in the year.
Broader Industry Pressures Already Evident
These challenges had been materializing throughout the pet industry. Zoetis, which specializes in animal health products, recently delivered disappointing quarterly results and lowered its own projections, driving its stock to multi-year lows.
Zoetis CEO Kristin Peck highlighted “increased price sensitivity” among pet owners — the identical macroeconomic pressure Singh subsequently referenced.
This industry context had already tempered investor expectations entering Chewy’s earnings report. The first-quarter performance, though unremarkable, managed to surpass the diminished expectations the market had established.
Chewy reaffirmed its adjusted EBITDA margin guidance of 6.6% to 6.8% for the full year.
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