Pet ecommerce company Chewy Inc (NYSE:CHWY) is set to report its second-quarter earnings before market open on Wednesday, with analysts eyeing potential growth in recurring revenue and subscription services.
Here's a preview of the key estimates, analyst expectations, and what to watch for in the upcoming report.
Earnings Estimates: Analysts expect Chewy to report Q2 revenue of $3.08 billion, up from $2.86 billion according to data from Benzinga Pro.
The company has beaten analyst estimates in two straight quarters and in seven of the last 10 quarters overall.
Analysts expect Chewy to report Q2 earnings per share of 14 cents, down from 24 cents a year ago. The company has beaten analyst estimates for earnings per share in more than 10 straight quarters.
Guidance from the company calls for Q2 revenue in a range of $3.06 billion to $3.09 billion and earnings per share in a range of 30 cents to 35 cents.
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What Analysts Are Saying: JPMorgan analyst Doug Anmuth views Chewy as a defensive stock. Most of Chewy’s net sales, 85%, are in non-discretionary goods.
The analyst said Chewy is seeing around 80% of its revenue come from Autoship. The analyst also highlighted that Chew is not seeing its hard goods impacted by tariff-driven inflation.
"We remain bullish on CHWY's product improvements, execution, and marketing, along with stable industry trends," Anmuth said.
The analyst maintained an Overweight rating with a price target of $47.
Anmuth said the U.S. pet category is still transitioning to digital. Around 38% of sales were online in fiscal 2024, opening up room for future growth. In the online pet category, Chewy has around a 33% market share.
The analyst said Chewy is showing momentum for new customers ahead of the earnings report. Anmuth estimates Chewy will add 126,000 net new customers in the second quarter and 656,000 in the fiscal year.
Mizuho recently upgraded Chewy stock from Neutral to Outperform. It also raised the price target from $44 to $50 ahead of the earnings report.
Key Items to Watch: As mentioned by Anmuth, Autoship is a strength for Chewy and will be one of the areas investors and analysts closely monitor.
Autoship sales were up 14.8% year-over-year in the first quarter to $2.56 billion.
Another area to watch is net sales per active customer with Chewy adding more products and services and diversifying itself in the pet sector. In the first quarter, net sales per active customer were up 3.7% year-over-year to $583.
Chewy CEO Sumit Singh said first-quarter results were above company expectations, highlighting the sales figure, active customer growth and free cash flow.
Another strong quarter could lead to the company raising guidance with initial expectations from the company guiding for fiscal 2025 sales between $12.30 billion to $12.45 billion.
CHWY Price Action: Chewy shares trade at $41.59 on Tuesday versus a 52-week trading range of $26.28 to $48.62. Chewy stock is up 22.8% year-to-date in 2025.
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