Chewy stock dropped Wednesday, which follows its fourth-quarter earnings report late Tuesday that missed analyst estimates on the top and bottom lines, as operating conditions in certain areas deteriorated.
Chewy reported an adjusted loss of 15 cents a share on revenue of $2.39 billion. Wall Street expected Chewy to report a loss of 8 cents on revenue of $2.4 billion. Revenue climbed 17% from the year-ago period.
Chewy stock plunged 16%, closing at 42.79 on the stock market today. The company also fell short on its first-quarter outlook.
"What we saw play out in the fourth quarter of 2021 was the conflict between the fundamentally strong consumer demand that underpins our business and the highly challenging operating environment," the company said in its letter to shareholders.
"We saw operating conditions in certain areas deteriorate as the quarter unfolded, particularly when Omicron's mid-quarter arrival further disrupted already-weakened supply chains across our industry." the company went on to say.
Chewy Stock: Lost Sales In Fourth Quarter
It added: "This added additional pressure to out-of-stock levels, and the impact from lost sales in the quarter was twice as high as we forecast. Without this, we estimate our fourth-quarter net sales would have been near the high end of our guidance range."
Chewy estimates first-quarter revenue in the range of $2.4 billion to $2.43 billion. That's below analyst estimates for $2.51 billion.
Consumables make up the lion's share of Chewy's revenue. However, the company is making inroads with new initiatives such as health care services for pets.
In December, Chewy announced a partnership with Trupanion to offer an exclusive suite of pet health insurance and wellness plans to more than 20 million Chewy customers. It also offers telehealth services.
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