It turns out people will keep spending on their pets, even if they’re cutting other spending—and Chewy stock is soaring because of it after releasing earnings.
Chewy reported a surprise profit of 20 cents a share, beating estimates for a loss of 4 cents a share, on sales of $2.78 billion, topping forecasts for $2.73 billion.
But it wasn’t just earnings that were spectacular. The company said that gross margins had increased by 0.9 percentage point, while net sales per active customer and Autoship sales per customer reached record levels. Chewy also said full-year sales would come in between $11.15 billion and $11.35 billion, up 10% to 12% from the previous year.
The numbers were something of a shock, given the poor sentiment heading into the print. Chewy stock had dropped 25% over the past three months, and earnings from Petco Health and Wellness (WOOF) only increased the possibility that Chewy would disappoint. Instead, Chewy crushed its numbers.
“The superior value proposition of the Chewy brand continues to resonate, and our team continues to demonstrate operating discipline and high-quality execution,” Chewy CEO Sumit Singh said in a statement.
Chewy stock jumped 13.8% to $33.55 in after-hours trading Wednesday.
