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Shares of Chewy sank in extended trading Wednesday after the online pet retailer’s second-quarter results and third-quarter outlook fell short of Wall Street forecasts.
The stock was down more than 11% at one point, before parring some of the losses to trade down roughly 9% at 5:30 p.m. in New York.
Chewy saw revenue rise nearly 27% on a year-over-year basis to $2.16 billion in the second quarter, but analysts were expecting sales of $2.20 billion, according to Refinitiv. The company also lost 4 cents per share, compared with estimates of a loss of 2 cents per share, according to Refinitiv.
Chewy’s third-quarter sales guidance of $2.20 billion to $2.22 billion also came in slightly lighter than expectations. Analysts projected $2.23 billion in third-quarter sales, according to StreetAccount.
In an interview Wednesday on CNBC’s “Closing Bell,” Chewy CEO Sumit Singh said he wasn’t worried about the stock’s decline in after-hours trading, stressing he was pleased with the quarter and the company’s future. “We are really bullish about the business,” he said.
Chewy has benefited from the coronavirus pandemic in two ways: a surge online shopping in general and a booming pet business as Americans spent more time at home, leading to increased pet adoption and spending on animals.
Singh said it was expected that the company’s growth rate would moderate as the economy reopened and consumer spending shifted back toward activities like travel. For example, in the second quarter last year, Chewy’s posted a 47% year-over-year jump in sales, compared with the most-recent quarter’s roughly 27% increase.
Even though top-line revenue growth has decelerated, Singh said other important metrics for the company are stronger than ever.
“Customer spending on our platform is at an all-time high,” Singh said. In the second quarter, Chewy’s net sales per active customer was $404, up 13.5% compared with the same period last year. Active customers of 20.1 million in the second quarter was 21.1% higher than in the second quarter in 2020.
“So what does that tell you? More customers. They’re spending more. They’re staying with us longer, and we continue to deliver very strong comps,” Singh said. “Overall, we’re very pleased with the performance of the business and the way that the teams are operating amidst this difficult environment.”