Chewy, the popular online pet products retailer, has experienced a decline in shares during late trading on Wednesday. The company’s underwhelming guidance for the January quarter and its revised full-year outlook are key contributors to this drop, as it grapples with ongoing macroeconomic pressures.

Currently, Chewy shares are down 8.1% and valued at $17.78.

During the fiscal third quarter ending October 31, Chewy reported revenue of $2.74 billion, an 8% increase compared to the previous year. However, this falls at the lower end of the company’s projected range and falls short of the Street consensus, which predicted revenue to reach $2.75 billion. On an adjusted basis, profits amounted to 15 cents per share, significantly surpassing the FactSet-tracked Street consensus of a 6 cent loss per share.

Nevertheless, the true focus for Chewy this quarter lies in its future guidance. The company expects sales figures between $2.78 billion and $2.8 billion for the January quarter, signifying a modest 3% increase. However, this projection falls below the Street consensus of $2.93 billion.

As a result, Chewy has revised its full-year revenue forecast to range between $11.08 billion and $11.1 billion, which is slightly lower than the previous estimation of $11.15 billion to $11.35 billion. Chewy maintains its adjusted Ebitda margin forecast of 3%.

In addressing these developments, Chewy acknowledges that while it remains confident in its ability to capture additional market share and achieve desirable levels of profitability, its guidance reflects the ongoing macro pressures faced by the entire industry. Notably, Chewy reports “encouraging” performance during the Black Friday and Cyber Monday shopping events that took place after Thanksgiving. However, sales trends have reverted back to pre-holiday levels.

Furthermore, Chewy has announced the appointment of David Reeder as the company’s new chief financial officer, replacing Stacey Bowman, who temporarily served as interim CFO. David Reeder joins Chewy from chip fab operator GlobalFoundries, where he served in the same capacity. Meanwhile, Stacey Bowman will resume her role as chief accounting officer.

In conclusion, Chewy’s shares have taken a hit due to disappointing guidance and a revised outlook. Nonetheless, the company remains determined to expand its market share and achieve satisfactory profitability amidst macroeconomic challenges. With the appointment of its new CFO, Chewy aims to navigate these difficulties and continue serving its loyal customers.

Eric J. Savitz

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