Financial Performance - Net sales for Q3 2024 reached $2.88 billion, a year-over-year increase of 4.8%[3] - Gross margin improved to 29.3%, up 80 basis points from the previous year[3] - Net income was $3.9 million, with a net margin of 0.1%, an increase of 140 basis points year-over-year[3] - Adjusted EBITDA rose to $138.2 million, reflecting a year-over-year increase of $55.7 million[3] - Adjusted net income increased to $84.9 million, up $21.5 million year-over-year[3] - Net income for the 39 weeks ended October 27, 2024, was $369,946, compared to a net income of $7,694 for the same period last year, marking a significant recovery[16] - Adjusted EBITDA for the 13 weeks ended October 27, 2024, was $138,245, a 67.4% increase from $82,581 in the prior year[21] - The company reported a net margin of 0.1% for the 13 weeks ended October 27, 2024, compared to a net margin of (1.3)% in the same period last year[21] - Adjusted net income for the 13 weeks ended October 27, 2024, was $84,922 thousand, compared to $63,449 thousand for the same period last year, representing a year-over-year increase of 33.5%[26] - Adjusted diluted earnings per share for the 39 weeks ended October 27, 2024, was $0.75, up from $0.50 for the same period last year, reflecting a 50% increase[26] - Adjusted basic earnings per share for the 39 weeks ended October 27, 2024, was $0.77, compared to $0.50 for the same period last year, reflecting a 54% increase[26] Cash Flow and Expenditures - The company reported robust free cash flow generation, underscoring the durability of its business model[3] - Net cash provided by operating activities was $388,809 for the 39 weeks ended October 27, 2024, compared to $386,664 in the same period last year, indicating stable cash flow[16] - Free cash flow increased by 218.2% to $151,767 for the 13 weeks ended October 27, 2024, compared to $47,692 in the prior year[16] - Free cash flow for the 13 weeks ended October 27, 2024, was $151,767 thousand, significantly higher than $47,692 thousand for the same period last year, indicating a growth of 217.5%[30] - Capital expenditures for the 39 weeks ended October 27, 2024, totaled $92,920 thousand, down from $110,902 thousand for the same period last year, a decrease of 16.2%[30] - The company emphasized the importance of free cash flow as a key indicator of liquidity, which is crucial for evaluating operational results[28] Customer Metrics - Active customers saw a sequential increase, contributing to the positive momentum observed in Q2[3] - Active customers remained stable at 20,160, a slight decrease of 0.5% from 20,266 in the previous year[16] - Autoship customer sales reached $2,300,928 for the 13 weeks ended October 27, 2024, an 8.7% increase from $2,116,458 in the same period last year[16] Shareholder Value - The company repurchased $875,197 of common stock during the current period, reflecting a strategic move to enhance shareholder value[16] Operational Focus - Chewy continues to focus on high-quality execution and operational discipline to drive growth[3] - The company partners with approximately 3,500 trusted brands and offers around 115,000 products and services[5] Earnings Per Share - Basic and diluted earnings per share were $0.01, an increase of $0.09 year-over-year[3] - The weighted-average common shares used in computing diluted earnings per share for the 13 weeks ended October 27, 2024, was 426,572 thousand, slightly down from 432,172 thousand for the same period last year[26] - Share-based compensation expense for the 13 weeks ended October 27, 2024, was $80,426 thousand, up from $65,799 thousand for the same period last year, an increase of 22.5%[26] Turnaround Performance - The company reported a net income of $3,932 thousand for the 13 weeks ended October 27, 2024, compared to a net loss of $35,372 thousand for the same period last year, marking a significant turnaround[26]

Core Viewpoint - Chewy Inc. is preparing to announce its Q3 fiscal 2024 earnings, with a focus on its growth trajectory and strategic initiatives, raising questions about its investment viability at this stage [1] Financial Performance - The Zacks Consensus Estimate projects revenues of $2.86 billion for the upcoming quarter, indicating a 4.5% increase year-over-year [2] - The consensus estimate for earnings is 23 cents per share, reflecting a significant 53.3% year-over-year increase, with Chewy having an average earnings surprise of 50.9% over the past four quarters [3] Market Position and Strategy - Chewy is adapting to market dynamics, enhancing its position in the growing pet care sector through an expanding customer base and diversified service offerings, including veterinary clinics and pharmacy services [6] - The company is broadening its inventory to meet customer preferences, supported by strategic promotions and targeted marketing initiatives [7] - The success of the Autoship program is expected to drive revenues and improve customer retention, simplifying the purchasing process and maintaining a steady revenue stream [8] Expansion and Innovation - Chewy has opened two additional Vet Care clinics, increasing the total to six, which enhances customer loyalty and serves as entry points for new customers [9] - The Sponsored Ads program is contributing to revenue growth, with increasing advertiser demand and improved click-through rates, while enhancements to the mobile app are driving customer acquisition and order frequency [10] Stock Performance - Chewy's stock has surged 50.1% over the past six months, outperforming the industry growth of 19.4% and its close competitors [11] Valuation - Chewy shares are trading at a forward 12-month price-to-sales ratio of 1.14, below the five-year median of 1.63 and the industry's average of 1.80, presenting an attractive opportunity for investors [13] Investment Thesis - Chewy's stock price appreciation, strong financial metrics, and strategic initiatives underscore its growth potential, with a focus on innovation through the Autoship program and pharmacy services likely driving revenue growth [16] - The company's diversified services and strategic marketing initiatives align with evolving consumer preferences, enhancing customer engagement and revenue potential [17]

For Immediate ReleasesChicago, IL – November 29, 2024 – Zacks.com announces the list of stocks and featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include including Sprouts Farmers Market, Inc. (SFM) , Deckers Outdoor Corp. (DECK) , Chewy, Inc. (CHWY) and Torrid Holdings Inc. (CURV) .Here are highlights from Friday’s Analyst Blog:4 Retail Stocks to Buy as Consumer Co ...

Key TakeawaysSprouts Farmers Market, Deckers Outdoor, Chewy and Torrid Holdings are strong retail stocks to buy now.Retail stocks may gain as US consumer confidence has grown for the past two months, hitting an 18-month high.Register now to see our 7 Best Stocks for the Next 30 Days report - free today!U.S. consumer confidence — a key determinant of the economy’s health — improved in back-to-back months. According to the Conference Board, the Consumer Confidence Index surged to 111.7 in November 2024, follo ...

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Chewy, driven by higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2] Earnings Expectations - Chewy is expected to report quarterly earnings of $0.23 per share, reflecting a year-over-year increase of +53.3% [3] - Revenues are projected to be $2.86 billion, representing a 4.4% increase from the same quarter last year [4] Estimate Revisions - The consensus EPS estimate has been revised 10.53% higher in the last 30 days, indicating a positive reassessment by analysts [5] - The Most Accurate Estimate for Chewy is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +2.67% [11][12] Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [9] - Chewy currently holds a Zacks Rank of 2, suggesting a high likelihood of beating the consensus EPS estimate [12][13] Historical Performance - Chewy has consistently beaten consensus EPS estimates, achieving this in the last four quarters [15] - In the last reported quarter, Chewy exceeded expectations by delivering earnings of $0.24 per share against an expected $0.22, resulting in a surprise of +9.09% [14] Conclusion - Chewy is positioned as a compelling candidate for an earnings beat, but investors should consider additional factors beyond earnings results when making investment decisions [18]

Company Performance - Chewy (CHWY) has returned 46.5% year-to-date, outperforming the Retail-Wholesale sector average of 27.8% [4] - The Zacks Consensus Estimate for Chewy's full-year earnings has increased by 39.1% over the past 90 days, indicating improved analyst sentiment [3] - Chewy currently holds a Zacks Rank of 2 (Buy) [3] Industry Comparison - Chewy belongs to the Internet - Commerce industry, which has 39 stocks and is ranked 74 in the Zacks Industry Rank [5] - The Internet - Commerce industry has gained an average of 32.1% year-to-date, with Chewy outperforming this average [5] - Petco Health & Wellness (WOOF), another Retail-Wholesale stock, has returned 33.9% year-to-date, also outperforming the sector average [4] Peer Analysis - Petco Health & Wellness falls under the Retail - Miscellaneous industry, which has 17 stocks and is ranked 163 in the Zacks Industry Rank [6] - The Retail - Miscellaneous industry has declined by 2.3% year-to-date, while Petco Health & Wellness has shown positive performance [6] - Petco Health & Wellness' consensus EPS estimate for the current year has increased by 4.1% over the past three months and holds a Zacks Rank of 2 (Buy) [5] Sector Overview - The Retail-Wholesale group consists of 210 companies and is ranked 7 within the Zacks Sector Rank [2] - The Zacks Sector Rank includes 16 groups, ranked based on the average Zacks Rank of individual companies within each sector [2]

Retail investors often feel on the outside of the stock market since information can often be hard to access and digest when the factors and trends to be identified aren’t too clear-cut. This is why looking at Wall Street analyst actions can be an important checklist for retail investors when looking at potential opportunities to put their capital to work. What is especially important to keep in mind is that analysts talk to each other, and they more or less have assumptions in mind that drive these stock v ...

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Chewy (CHWY) , which belongs to the Zacks Internet - Commerce industry.This online pet store has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 28.35%.For the last reported quarter, Chewy came out with earnings of $0.24 per share vers ...

Analyst Upgrade and Price Target - Bank of America analyst Curtis Nagle double upgrades Chewy shares from Underperform to Buy and raises the price target from $24 to $40 [1] - The upgrade is based on improving industry trends and earnings potential [2] Industry Trends and Growth - Animal shelters are taking in a large number of pets, but adoption trends have improved since the start of 2024 [3] - Pet spending appears to have bottomed after being negative year-over-year earlier this year [3] - Industry is expected to return to consistent low single-digit to mid single-digit (LSD%-MSD%) growth in the first half of 2025 [3] - Chewy's website traffic was up 6% year over year in the third quarter compared to down 11% year over year in the first quarter [3] Earnings and Expense Discipline - Chewy's expense discipline could lead to earnings growth that is being underestimated by investors and other analysts [2] - Since cost cuts in late 2023, Chewy has demonstrated strong expense discipline in SG&A and has scaled fulfillment expenses [4] - Advertising and health growth opportunities come with higher gross margins and could lead to significant earnings growth in the coming years [4] Business Model and Market Position - Chewy's subscription-like model should command a premium [5] - The company's low exposure to discretionary categories minimizes the impact of increased Chinese tariffs [5] - Chewy is predicted to beat the third-quarter Street estimate of 50,000 net adds for active customers, given pet industry trends and website traffic [5] - Over the last 10 quarters, the active customer count has been a leading indicator of stock movement [5] Stock Performance - Chewy stock is up 4 3% to $34 37 on Wednesday, versus a 52-week trading range of $14 68 to $39 10 [6] - Chewy stock is up 55% year-to-date in 2024 [6]

Core Insights - Chewy Inc (NYSE:CHWY) has experienced a 4.9% increase in stock price, reaching $34.54, following a double-upgrade from BofA Global Research to "buy" from "underperform," with a price target raised to $40 from $24 [1] - The firm highlighted an increase in pet adoption rates since the beginning of the year, while pet spending has hit a low point, indicating potential for a rebound [1] - Increased web traffic has also contributed to the positive outlook for Chewy [1] Stock Performance - The stock has surpassed the $34 mark, which had previously limited rallies in mid-September and earlier this month [2] - Year-to-date, Chewy's equity has risen by 45.7%, supported by long-term support at the 120-day moving average since May [2] Options Activity - In the options market, call options are currently more favorable, with 9,575 calls traded today, while 3,766 puts exchanged represent double the typical put volume [3] - The most popular option is the weekly 11/22 34-strike call, with new positions being opened [3] - Over the past 10 weeks, options traders have shown increased bullish sentiment, with a 50-day call/put volume ratio of 5.55, ranking higher than all other readings in its annual range [4] Volatility and Pricing - Options for Chewy are currently reasonably priced, with a Schaeffer's Volatility Index (SVI) of 69%, which ranks in the 25th percentile of readings from the past 12 months, indicating low volatility expectations [5]