Chewy Inc shares fell Thursday morning despite the company’s third-quarter earnings beating expectations after its guidance failed to impress.
The pet products e-commerce company posted adjusted earnings of $0.15 per share, better than the $0.06 per share loss expected by analysts. Revenue was $2.74 billion, up 8% year-over-year but just short of an expected $2.75 billion.
“Chewy continues to gain market share, with third-quarter net sales increasing 8% against industry growth in the low single digits," CEO Sumit Singh said in a statement.
However, Chewy’s fourth-quarter sales guidance was $2.78 billion to $2.8 billion, well short of the $2.93 billion called for by analysts.
Following the results, Bank of America analysts reiterated its Underperform rating and lowered its price target for the stock to $15 from $16. Chewy shares traded 3.5% Thursday morning to $18.67.
“Management commentary suggests flat-to-[low-single-digit] industry growth in 4Q, indicating narrowing share gains, driven by a shift away from pricing tailwinds and into unit growth,” the analysts wrote.
Notably, Chewy’s management also acknowledged that pet adoptions are down 16% year over year
“Weakening industry trends are unsurprising, but perhaps more pronounced than anticipated,” the analysts wrote.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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