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Chewy (CHWY) Queues Up for Q1 Earnings: What's in the Cards?

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Chewy, Inc. (CHWY - Free Report) is expected to report top and bottom-line growth when it reports first-quarter fiscal 2021 results on Jun 10, after market closes. In fact, the Zacks Consensus Estimate for earnings in the fiscal first quarter is pegged at 3 cents, which has been stable over the past 30 days. However, the company reported a loss of 12 cents a share in the year-earlier quarter. Moreover, the consensus estimate for quarterly sales stands at $2,124 million, indicating an increase of about 31% from the year-ago quarter’s reported figure.

Notably, this pet food and other pet-related supplier delivered an earnings surprise of 76.6%, on average, in the trailing four quarters.

Key Factors to Note

ndeniably, Chewy’s e-commerce channels, product assortments and innovative services are likely to have favorably impacted its quarterly performance. Additionally, the company’s pharmacy operations bode well. We also note that the company’s strategic initiatives including the launch of eGift cards and personalized products, telehealth offering, Connect with a Vet and compounding services augur well. Such strengths are expected to have contributed to the company’s performance in the quarter under review.

On the company’s last earnings call, management had highlighted that it expects to witness higher productivity gains in 2021. It also envisioned the positive demand trends of fourth-quarter fiscal 2020 to continue in 2021. The company had also anticipated the net active customer apps in 2021 to revert closer to the pre-COVID levels.

Although management has been leveraging selling, general and administrative expense for a while now, it expects to make higher investments to strengthen its employee value proposition including increased wages and benefits.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Chewy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here as explained below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Chewy Inc. Price and EPS Surprise

Chewy Inc. Price and EPS Surprise

Chewy Inc. price-eps-surprise | Chewy Inc. Quote

Although Chewy has a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies worth considering as our model shows that these have the right combination of elements to beat on earnings:

Darling Ingredients (DAR - Free Report) has an Earnings ESP of +31.53% and is presently Zacks #2 Ranked. You can see the complete list of today’s Zacks #1 Rank stocks here.

Snap-on (SNA - Free Report) currently has an Earnings ESP of +0.08% and a Zacks Rank #2.

Signet (SIG - Free Report) has an Earnings ESP of +2.84% and a Zacks Rank of 2, currently.

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