Chewy stock drops 10% after second quarter results on disappointing customer counts



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Shares of Chewy Inc. fell nearly 10% on Wednesday after trading hours after the specialty retailer posted a larger-than-expected loss for its second quarter and had slightly fewer active customers than Wall Street had. planned.

Chewy ALL,
-0.78%
said it lost $ 17 million, or 4 cents per share, in the quarter, compared to a loss of $ 33 million, or 8 cents per share, in the quarter a year earlier. The FactSet consensus called for a quarterly loss of 2 cents per share.

Sales rose 27% to $ 2.16 billion, from $ 1.70 billion a year ago, and were in line with company expectations and forecasts.

Chewy, which sells a variety of pet products, said it ended the quarter with 20.1 million active customers, or 21% more year-over-year. Analysts polled by FactSet expected the company to end the quarter with 20.4 million active customers.

The company added more customers than before the pandemic, “but below the record levels we saw last year during the peak of lockdowns related to the pandemic,” Chewy said.

“Our business remains healthy, customer engagement continues to grow and we are confident in our ability to build on the strong results we achieved last year while navigating uncertain market conditions due to the pandemic of Ever-evolving COVID-19, ”the company said. in a letter to shareholders.

Chewy posted a surprise quarterly profit in June, but warned it was facing labor shortages and supply issues that caused it to run out of certain items.

It continued to experience problems with out-of-stock items, but the situation improved “modestly,” the company said.

“This is the result of improving supply chain conditions in some areas as some suppliers are reducing backlogs,” Chewy said. “However, other areas like wet dog food are still affected by industry-wide production capacity limitations.”

Chewy had third-quarter sales of between $ 2.20 billion and $ 2.22 billion. For fiscal 2021, the company maintained its sales forecast between $ 8.9 billion and $ 9 billion. Conditions around the pandemic remain “unpredictable,” he said.

Chewy stock ended the extended session Wednesday down 9.7% and has fallen nearly 3% so far this year, contrasting with gains of around 21% for the S&P 500 SPX index,
+ 0.03%.

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