Shares of Chewy tumbled 6.5% to $21.76 Wednesday morning after fiscal second-quarter results that checked every box on paper but failed to deliver the upside jolt investors had priced in during a recent rally. The online pet retailer delivered results that matched analyst forecasts but failed to generate the upside surprise many investors had positioned for following a sharp pre-earnings run-up.
Meeting Expectations Isn't Enough When the Stock Already Ran Up
Revenue hit $3.33 billion versus estimates of $3.32 billion, while adjusted EPS of $0.36 landed exactly on consensus.
Adjusted EBITDA of $226.7 million came in well ahead of the $212.1 million analyst estimate, with the margin expanding to 6.8%. But the stock had climbed from roughly $23.72 on September 1 to $23.96 by September 3 — baking in hopes for a blowout. When the numbers merely matched, sellers stepped in.
Guidance Barely Clears the Bar
For the third quarter, Chewy guided to revenue of $3.32–$3.36 billion, with a midpoint of $3.34 billion compared to the analyst consensus of $3.33 billion.
For full-year fiscal 2027, the company expects revenue of $13.46–$13.57 billion versus consensus of $13.48 billion. Those ranges nudge above Street estimates by fractions of a percent — not the kind of boldness that pulls a stock out of a 27% year-to-date decline.
Customer Growth Is Real but Slowing
Active customers grew 3.8% year-over-year to 21.7 million, while Autoship — the subscription program that locks in recurring purchases — rose 9.3% to $2.82 billion, representing 84.6% of net sales. That subscription stickiness is Chewy's biggest asset, yet excluding contributions from the SmartPak and Modern Animal acquisitions, net sales grew only 5.7% , suggesting the core business is decelerating even as bought revenue fills the gap.
Insiders Are Selling, Not Buying
Insiders have traded CHWY stock seven times in the past six months — all seven were sales, zero were purchases.
Management previously lowered its fiscal 2026 sales outlook to $13.40–$13.55 billion, citing macro headwinds and consumer trade-down to lower-priced pet products. With Wall Street's average price target sitting at $35.65 , the implied upside is large — but realizing it requires Chewy to prove that cautious guidance is sandbagging, not a warning. Until then, meeting expectations won't be enough for a stock already priced for more.