What's Happening?
Chewy, the pet supplies e-commerce company, released its earnings report for the second quarter of 2025, showing a strong performance. The company reported adjusted diluted earnings per share of 33 cents, significantly surpassing Wall Street's estimate of 14 cents. This represents a 37.5% increase from the previous year's 24 cents. Chewy's revenue for the quarter was $3.1 billion, exceeding analysts' expectations of $3.08 billion and marking an 8.4% year-over-year growth from $2.86 billion. Despite these positive results, Chewy's stock fell by 7.24% in pre-market trading on Wednesday. However, the stock has seen a substantial rally, increasing 25.71% year-to-date and 39.22% over the past 12 months.
Why It's Important?
Chewy's strong earnings report highlights the company's robust growth and its ability to exceed market expectations. The significant increase in earnings per share and revenue growth underscores the company's successful strategies, particularly in Autoship customer net sales, which accounted for 83% of the quarter's revenue. Despite the stock's decline following the earnings announcement, the overall positive performance suggests investor confidence in Chewy's long-term prospects. The company's updated guidance for Q3 and the full year of 2025 indicates continued growth, with expectations to meet or exceed Wall Street's estimates. This positions Chewy as a strong player in the e-commerce sector, particularly in the pet supplies market.
What's Next?
Chewy has provided updated guidance for the third quarter and the full year of 2025. The company expects Q3 adjusted EPS to range from 28 cents to 33 cents, with revenue between $3.07 billion and $3.1 billion. For the full year, Chewy anticipates revenue between $12.5 billion and $12.6 billion, potentially surpassing analysts' estimates of $12.48 billion. Wall Street analysts have given Chewy a consensus rating of Strong Buy, with an average stock price target of $48.12, suggesting a potential 14.3% upside. These ratings and price targets may be adjusted as analysts update their coverage following the earnings report.
