Sep 1, 2021
Chewy falls as sales outlook, earnings ignite post-pandemic fear
Chewy Inc.’s sales expectations for 2021 failed to excite investors as the company navigates consumer trends amid the COVID-19 pandemic.
The company maintained its year revenue outlook for US$8.9 billion to US$9 billion, citing uncertainty related to the pandemic, while Wall Street had estimated US$9 billion. Chewy’s forecast for third-quarter net sales of between US$2.2 billion and US$2.22 billion, came in slightly below the average of projections.
“It’s hard to forecast this year,” Chief Executive Officer Sumit Singh said in an interview. “We’re trying to predict the consumer behavior and the rate of demand that still continues to migrate online given that the economy and the consumer are trying to find their post-pandemic footing.”
The shares tumbled 8.6 per cent to US$79.95 at 5:25 p.m. in postmarket trading in New York. They have struggled to find their groove after hitting a record in mid-February. Chewy has shed more than a quarter of its value from that peak through Wednesday’s close.
Investors have been bracing for slowing demand for pet supplies after the pandemic drove stuck-at-home consumers to order food, collars and medicine online. The Dania Beach, Florida-based company’s softer-than-expected forecast was another example of former high-flying companies like Peloton Interactive Inc. and Zoom Video Communications Inc. failing to meet expectations after seeing a boom amid the pandemic.
The online pet-products retailer posted second-quarter sales of US$2.16 billion, a 27 per cent increase from a year earlier, to come in just shy of the average analyst estimate for US$2.17 billion. Chewy had 20.1 million active customers for the quarter, missing the average analyst estimate for 20.4 million.
Singh and Chewy’s executives remain focused on building out its business. “We plan a couple of years out and not on a quarter-to-quarter basis,” he said.
The company said supply chain issues have “modestly” improved, though issues related to wet dog food persist.