Chewy Inc. (CHWY) delivered a positive surprise in its second-quarter 2024 earnings report, beating analysts’ expectations and reaffirming its annual guidance. The company reported sales of $2.86 billion, a 2.6% increase year-over-year, aligning with both the consensus estimate and management’s guidance range. Furthermore, Chewy announced adjusted earnings per share (EPS) of $0.24, exceeding the consensus estimate of $0.02 and marking a significant improvement from $0.15 a year ago.
Analysts are expressing optimism following these results. JP Morgan, for example, is encouraged by the return to growth in active customers, highlighting this as a positive sign within the industry. The firm also pointed to the meaningful upside in adjusted EBITDA and significant capital returns as further positive factors.
RBC Capital Markets, while acknowledging the potential for continued sales growth, maintains a more cautious outlook, noting that visibility into future performance remains limited. Despite this, the firm maintains its Outperform rating and raised its price target from $24 to $32, reflecting a revised FY 2025 adjusted EBITDA estimate of $670 million.
The analyst at RBC acknowledges the potential for valuation concerns, but anticipates that positive factors like category stabilization, improved profitability, and share buybacks will attract investors. Conversely, potential concerns around valuation could deter some investors.
Following the release of these positive results, CHWY stock saw a significant increase, closing at $29.21 on Thursday, representing a 1.71% jump from the previous day’s trading.
