Chewy Inc. tumbled after the online seller of pet supplies cut its revenue outlook and said customer growth has slowed.
(Bloomberg) — Chewy Inc. tumbled after the online seller of pet supplies cut its revenue outlook and said customer growth has slowed.
Sales in the current fiscal year will total no more than $10 billion as customer pull back on discretionary goods such as toys and treats, Chewy said in a letter to shareholders Tuesday. That’s down from a previous forecast of as much as $10.4 billion.
The shares fell as much as 12% in early New York trading, poised to extend a 37% drop so far this year.
Chewy, based in Dania Beach, Florida, is contending with a broad-based fall in demand for discretionary items as US consumers shift spending to food and other essentials amid soaring inflation. Petco Health & Wellness Co. is struggling with the same pressures, as are mass-market retailers outside the pet industry such as Walmart Inc. and Target Corp.
While demand for pet food remains durable, sales in discretionary categories “reflect the impact of inflation on consumer-spending patterns,” Chewy told shareholders.
In addition, customer growth decelerated again in the fiscal second quarter. Chewy’s active customers rose only 2.1% in the three months ending in late July. That’s a slowdown for the closely-followed number, which expanded 4.2% in the first quarter, 7.6% in the fourth quarter of the previous fiscal year and about 15% in the third.
(Updates trading in third paragraph.)
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