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Here's How Chewy (CHWY) Is Poised Ahead of Q3 Earnings

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Chewy, Inc. (CHWY - Free Report) is likely to report top and bottom-line growth when it reports third-quarter fiscal 2023 results on Dec 6 after market close. The Zacks Consensus Estimate for quarterly sales is currently pegged at $2,761 million, showing a 9.1% increase from the year-ago quarter’s tally.

The consensus mark for the fiscal third quarter has been stable over the past 30 days at 9 cents a share. This reflects year-over-year growth of 800% from a penny recorded in the year-earlier quarter.

This pet food and other pet-related supplier delivered an earnings surprise of 245.6%, on average, in the trailing four quarters. In the last reported fiscal quarter, Chewy recorded an earnings surprise of 36.4%.

Key Factors to Note

Chewy’s performance for the fiscal third quarter is quite likely to have been benefited from its e-commerce channels, product assortments and innovation efforts.  Management has been making technology upgrades for its website and online platforms to drive online sales. Higher product demand, robust consumer engagement and growth in active customers have been steadily contributing to its results. Net sales per active customer and Autoship customer sales have been quite which, which in turn, have boosted customer loyalty. Additionally, CHWY’s healthcare business bodes well.

The Zacks Consensus Estimate for net sales per active customer is presently $538, showing a rise of 12.8% from the preceding quarter.

However, the company’s quarterly performance is likely to have been hurt by a tough macroeconomic environment, including headwinds like inflationary pressures. These factors, coupled with any deleverage in selling, general and administrative expenses, are expected to have affected CHWY’s performance in the fiscal third quarter.

What the Zacks Model Unveils

Our proven model does not 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 before they’re reported with our Earnings ESP Filter.

Chewy Price and EPS Surprise

Chewy Price and EPS Surprise

Chewy price-eps-surprise | Chewy Quote

Chewy currently an Earnings ESP of 0.00% and a Zacks Rank of 3.

Stocks With the Favorable Combination

Here are a few companies, which according to our model, have the right combination of elements to come up with an earnings beat this reporting cycle:

Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +13.86% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is expected to have registered a bottom-line decrease when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly earnings per share of $3.65 suggests a dip of 0.5% from the year-ago quarter.

The consensus mark for revenues is pegged at $4.2 billion, indicating a rise of 4.3% from the figure reported in the year-ago quarter. CASY has a trailing four-quarter earnings surprise of 17.5%, on average.

Abercrombie & Fitch Co. (ANF - Free Report) has an Earnings ESP of +5.79% and a Zacks Rank of 2. ANF’s earnings for the to-be-reported quarter are expected to increase 181.5% on a year-over-year basis. The consensus mark for its quarterly earnings has moved up 26% to $2.28 per share in the past 30 days.

The Zacks Consensus Estimate for Abercrombie & Fitch’s quarterly revenues is pegged at $1.36 billion, which suggests growth of 13.8% from the figure reported in the prior-year quarter.

Costco (COST - Free Report) currently has an Earnings ESP of +1.98% and a Zacks Rank of 3. COST is likely to have registered a bottom-line increase when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.44 suggests an increase of 11% from the year-ago fiscal quarter’s reported number.

Costco’s top line is expected to have improved from the prior-year fiscal quarter’s reported number. The consensus estimate for quarterly revenues is pegged at $57.5 billion, suggesting growth of 5.7% from the prior-year fiscal quarter’s reported figure. COST has a trailing four-quarter earnings surprise of 2.1%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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