New York, June 10, 2026, 09:51 EDT
- Chewy trimmed its fiscal 2026 net sales forecast to $13.40 billion–$13.55 billion, down from a prior $13.60 billion–$13.75 billion. First-quarter sales rose 7.7%.
- The stock was last at $19.90, off 50 cents. Shares moved between a high of $22.125 and a low of $19.12 earlier in the session.
- Chewy’s second-quarter outlook missed FactSet expectations, according to The Wall Street Journal, and investors are watching the forecast.
Chewy, Inc. stock fell Wednesday. The online pet retailer posted a strong first quarter but cut its full-year sales outlook. It’s the lower 2024 forecast, not the last quarter’s results, that changed from yesterday. Management now sees slower growth for the year.
Chewy opened at $21.00, ran up to $22.125 before giving it all back, last trading at $19.90, off 50 cents from its prior close. Volume was near 5.7 million shares. The stock’s quick reversal showed how fast relief turned to caution in the name.
Guidance was key. Chewy cut its outlook for fiscal 2026 net sales to $13.40 billion to $13.55 billion, down from a previous range of $13.60 billion to $13.75 billion. That’s below the $13.65 billion analysts expected, according to FactSet figures cited by The Wall Street Journal. For the quarter now underway, Chewy sees sales between $3.30 billion and $3.33 billion and about 36 cents a share in adjusted earnings, both short of FactSet’s sales forecast of $3.36 billion and 40 cents per share.
Chewy’s softer guidance eclipsed solid first-quarter numbers. The company reported net sales up 7.7% to $3.36 billion for the quarter ending May 3. Gross margin came in at 30.1%, up 50 basis points. Net income climbed to $94.8 million, or 23 cents a diluted share, compared with $62.4 million, or 15 cents a share, a year ago.
Chewy CEO Sumit Singh said the company keeps beating the pet category and is growing both profit and free cash flow. Singh noted Chewy added almost 200,000 net customers for the quarter. The company posted adjusted EBITDA of $253.1 million. Adjusted EBITDA strips out interest, taxes, depreciation, amortization, and some other costs.
Chewy reported more active customers, up 3.6% to 21.497 million. Net sales per active customer also climbed, rising 2.4% to $597. Autoship customer sales went up 10.5% to $2.83 billion. Autoship now makes up 84.4% of total net sales, compared with 82.2% a year ago.
Timing is the market’s issue here. Chewy’s past revenue, margins, and Autoship figures all point to gains in pet supply wallet share. But the updated outlook signals a rougher patch ahead—next quarters could see customers cut back on premium goods, buy fewer extras, or stretch out the time between purchases. Chewy flagged inflation, high rates, and general uncertainty as headwinds in its latest annual filing, saying these forces have changed how shoppers spend and could hit product mix, order frequency, and promo levels.
Investors were already wary. Barron’s said they were cautious before the report, given Singh’s earlier warnings on tight consumer wallets and weak Zoetis numbers raising questions around pet-owner price sensitivity. Chewy sticking with its adjusted EBITDA margin forecast of 6.6% to 6.8% was something, but the revenue miss still landed.
Chewy’s cash flow steadied the quarter. Net cash from operating activities came in at $108.5 million, with $70.8 million in free cash flow—defined as operating cash flow less capex. Chewy bought back $200.0 million of its own stock in the period. Stock repurchases can help per-share earnings if Chewy pays a favorable price.
Chewy’s margin plan could fall short if sales slow more from here. The company’s 10-K, right after today’s guidance cut, lays out key risks: trouble bringing in and keeping customers without spending more, increased shipping costs, supplier problems, bad sales forecasts, and tough competition online for pet goods and services. More retail discounting could help sales, but it would likely hurt margins.
Chewy posted a solid Q1, but now the market wants to see if it can stick to its Q2 sales target of $3.30 billion to $3.33 billion. The company must also keep Autoship and active customer growth healthy to show that its guidance cut was just caution, not an early sign that pet spending is fading.
