Chewy Inc (NYSE:CHWY) shares rebounded on Wednesday morning after an early premarket dip, following the company’s guidance for fourth-quarter earnings that fell slightly short of analyst expectations.
The online pet retailer reported third-quarter earnings per share (EPS) of $0.32 on $3.12 billion in revenue, up 8.3% from a year earlier, beating Wall Street estimates.
Autoship subscriptions, a key growth driver, rose roughly 14% to $2.6 billion.
Adjusted EPS climbed $0.12 year-over-year, reflecting steady operational momentum.
However, Chewy’s guidance for fourth-quarter EPS of $0.24 to $0.27 compared with roughly $0.29 expected weighed on sentiment in premarket trading before shares reversed course, rising 1.9% in early Wednesday trading.
“Chewy continues to outperform the pet category and expand market share, with profits once again growing faster than sales,” said CEO Sumit Singh. “Our Q3 results build on the momentum from the first half of fiscal 2025 and highlight both the structural resilience of our model and the execution quality of every team member at Chewy. We exceeded the high end of our net sales guidance, grew margins, and delivered strong free cash flow generation.”
Key third-quarter metrics included net income of $59.2 million, gross margin of 29.8% (up 50 basis points year-over-year), and diluted EPS of $0.14, up $0.13 from a year ago. Adjusted diluted EPS, excluding share-based compensation and related taxes, was $0.32.
Analysts at Jefferies maintained a “Hold” rating on Chewy with a price target of $41, noting that third-quarter results showed strength across sales and earnings, while fourth-quarter guidance appeared conservative. “Customers and average spend were both up 5%, proving the platform has momentum into the holidays,” Jefferies wrote, citing Chewy’s Autoship, healthcare services, and Chewy+ subscription offerings as positive catalysts.
Despite the soft EPS outlook for Q4, the company’s performance in Q3 underscores resilience in its business model and continued consumer demand in the pet segment, analysts said.