Chewy dog | Doggone Inflation Eats Into Chewy's Second-Quarter Sales

Chewy, an online pet store, has reported a drop in sales for the second quarter of its fiscal year, showing that even spending on dog treats and other pet accessories has been affected by inflation.



NEW YORK (AP) — Online pet retailer Chewy Inc. on Tuesday announced a decline in sales for the second quarter of its fiscal year, demonstrating that even spending on dog treats and other pet accessories has been affected by inflation.


Additionally, the Florida-based company's sales projections for the current quarter and fiscal year fell short of what Wall Street had anticipated. Chewy's shares lost more than 9% of their value in after-hours trading.

Chewy's underwhelming sales figures highlight how consumers are spending less on discretionary goods, including pet products, which were once thought to be recession-proof. The shortage follows robust sales for pet-supply merchants at the height of the pandemic, which were boosted in part by people who bought dogs to keep them company during lockdowns.


However, it appears that soaring prices are also shocking for pet owners.


Chewy CEO Sumit Singh said on Tuesday that prices rose across the board in the pet market during the second quarter. "Consumers in the pet market responded to increased economic uncertainty by restricting some of their purchasing activities, leading to industrywide losses in unit volume."

According to Singh, Chewy exceeded general industry trends in necessities like food and healthcare even as consumers cut back in some areas.


After posting a loss during the same period a year prior, Chewy recorded a second-quarter net income of $22.3 million, or 5 cents per share, in the quarter that ended July 31.


The outcomes were better than Wall Street had anticipated. Zacks Investment Research surveyed eight analysts, and the mean prediction they provided was for a loss of 12 cents per share.


The online pet store reported $2.43 billion in sales, a 13% rise from the same period last year. The outcomes, though, fell short of Wall Street expectations. Zacks surveyed eight experts, and they predicted $2.45 billion.

Chewy stated that it anticipates sales for the current quarter, which ends in October, to be in the $2.44 billion to $2.46 billion range. According to FactSet, analysts had $2.57 billion on their radar.


The business stated that it anticipates full-year revenue in the $9.9 billion to $10 billion range. That falls short of FactSet's forecast of $10.25 billion as well.


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