Chewy
shares were heading lower after the online pet products retailer provided disappointing guidance for the January quarter and reduced its full-year outlook, amid continued macroeconomic pressures on its business.
Chewy shares were 12% lower at $17.19 in premarket trading Thursday.
For the fiscal third quarter ended Oct. 31, Chewy posted revenue of $2.74 billion, up 8% from a year ago, at the low end of the company’s guidance range and below the Street consensus at $2.75 billion. Profits on an adjusted basis were 15 cents a share, nicely ahead of the Street consensus as tracked by FactSet for a loss of 6 cents a share.
But the story for Chewy this quarter is the guidance. For the January quarter, Chewy projects sales of between $2.78 billion and $2.8 billion, up 3%, but below the Street consensus at $2.93 billion.
Chewy reduced its full-year revenue guidance to between $11.08 billion and $11.1 billion, from a previous forecast of $11.15 billion to $11.35 billion. Chewy reiterated its forecast for an adjusted Ebitda margin of 3%.
“While we are confident in our ability to continue gaining market share and deliver attractive levels of profitability, our guidance reflects the continued macro pressures observed industrywide,” the company said in a letter to shareholders. Chewy said it saw “encouraging” performance on both Black Friday and Cyber Monday following Thanksgiving, but that trends have returned to preholiday levels.
Chewy also announced that the company has named David Reeder to be the company’s new chief financial officer. He joins Chewy from the chip fab operator GlobalFoundries, where he has served in the same role. Stacey Bowman, now serving as interim CFO, will resume her role as chief accounting officer.
Write to Eric J. Savitz at eric.savitz@barrons.com
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