By Claudia Assis
Inflation has forced pet parents to buy less, Chewy says
Chewy Inc. stock fell more than 11% in the extended session Tuesday after the specialty retailer reported a surprise quarterly profit but shaved guidance for the year, saying rising prices have led pet parents to buy fewer goods and focus instead on pet medications and food.
Chewy (CHWY) said it earned $22.3 million, or 5 cents a share, in the second quarter, swinging from a loss of $16.7 million, or 4 cents a share, in the year-ago period.
Sales rose 13% to $2.43 billion, the company said. Chewy reported having 20.5 million active customers.
Analysts polled by FactSet expected Chewy to report a loss of 11 cents a share on sales of $2.45 billion. The number of active customers was seen at 20.6 million.
"Accelerating inflation" pressured consumers, Chewy executives said in a letter to shareholders.
"Across the pet category, pricing escalated throughout the second quarter. Pet-category consumers responded to growing economic uncertainty by curtailing some of their purchase activity, leading to industrywide declines in unit volume," the company said.
Chewy guided for full-year 2022 sales between $9.9 billion and $10 billion, which would represent growth between 11% and 12% on-year.
That contrasts with June guidance of 2022 sales between $10.2 billion and $10.4 billion, which would have represented growth between 15% and 17% on-year.
Chewy called for higher EBITDA margins for the year, however, of between 1.75% and 2%, compared to earlier expectations of between break-even and 1%.
(END) Dow Jones Newswires
August 31, 2022 07:37 ET (11:37 GMT)
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