Chewy Earnings Were Good. Why the Stock Is Tumbling.

Chewy stock is up 26% this year heading into Wednesday’s earnings. (Daniel Acker/Bloomberg)

Chewy stock fell 15% early Wednesday as earnings from the pet-supplies retailer didn’t quite live up to expectations after traders had piled into the shares ahead of the update.

The company matched profit expectations, reporting adjusted earnings of 33 cents per share, and even beat revenue estimates. But the shares have rallied into Wednesday’s earnings—up 7% over the past week and 26% higher in 2025, as of Tuesday’s close. Investors may have been barking up the wrong tree—as the report itself wasn’t quite enough to justify that recent optimism.

There were still positives, though. Sales grew 9% year-over-year to $3.1 billion, above estimates of $3.08 billion per analysts surveyed by FactSet. EPS also increased to 33 cents from 20 cents in the same quarter last year.

The retailer’s active customers rose 4.5% to 20.9 million, beating the Street’s consensus, while net sales per active customer also jumped to $591 from $565 in the second quarter of 2024.

“Chewy’s differentiated value proposition was once again on display, with both active customers and share of wallet (NSPAC) growing 4.5% year over year to reach nearly 21 million customers and $591, respectively,” CEO Sumit Singh said.

The company expects to report adjusted EPS of between 28 cents and 33 cents in the current quarter, roughly in line with analysts’ expectations of 30 cents. It guided for sales of between $3.07 billion and $3.1 billion, ahead of the Street’s $3.05 billion estimate.

On top of that, it hiked annual revenue guidance to a range of $12.5 billion to $12.6 billion, up from a previous range of $12.3 billion to $12.45 billion. That was also above the consensus view but still wasn’t enough to stop the stock falling.

The shares fell 14.6% to $35.95 in early trading.

Write to Callum Keown at callum.keown@dowjones.com