To The Moon

$Chewy, Inc.(CHWY)$ is scheduled to report its fiscal Q2 2025 earnings before the market opens on Wednesday, September 10, 2025. This report will provide key insights into the company's performance amidst a challenging macroeconomic environment and its continued push into new business segments.

Revenue: The consensus forecast for Q2 is approximately $3.1 billion, which would represent a 7.8% increase from the year-ago quarter. A beat on this number would be a strong signal that the company's growth initiatives are gaining traction.

Non-GAAP EPS: Analysts are expecting a non-GAAP EPS of around $0.33 per share, a significant jump of 37.5% year-over-year. This reflects the company's focus on operational efficiency and profitability.

Summary of Chewy's Fiscal Q1 2025 Earnings

Chewy Inc. (CHWY) delivered a strong performance in its fiscal Q1 2025, with results that exceeded both its own guidance and analyst expectations.

Financial Performance: The company reported revenue of $3.12 billion, surpassing the high end of its guidance range and demonstrating an 8.3% year-over-year increase. Adjusted earnings per share (EPS) came in at $0.35, a significant beat over the consensus of $0.32.

Customer Metrics: Chewy continued to show healthy customer growth, adding approximately 240,000 new customers sequentially to reach a total of 20.8 million active customers. The company also saw a 3.7% increase in net sales per active customer, a positive indicator of customer loyalty and engagement.

Operational Highlights: The report highlighted the success of Chewy's autoship subscription service, which represented a dominant 82.2% of total sales. The company also demonstrated strong profitability, with adjusted EBITDA margin expanding to 6.2%.

The Lesson Learned from the Guidance

The key lesson from Chewy's Q1 earnings and subsequent guidance is that while the company is executing its plan effectively, investor sentiment is highly sensitive to the broader economic outlook, especially concerns about consumer spending.

Execution is Key, but Macro Matters More: Despite Chewy's impressive performance and its ability to beat on both the top and bottom lines, its stock initially fell after the report. This reaction was not a reflection of the company's Q1 results, but rather the market's focus on the guidance. Chewy's management provided a conservative outlook for Q2 and the full fiscal year, signaling that they are aware of and cautious about ongoing macroeconomic headwinds.

The Focus is on Long-Term Strategy: The guidance, while cautious, reinforced the company's commitment to its long-term strategy of expanding into higher-margin areas like Chewy Health (vet clinics and pharmacy) and its paid membership program. The lesson here is that Chewy is not just a pet products e-commerce company anymore; its future growth is tied to building a comprehensive ecosystem of services. Investors are being guided to look beyond the immediate quarter's revenue and evaluate the company based on its ability to successfully execute on these strategic pivots over time.

Key Metrics for Investors to Watch

Investors will be looking for a balance between top-line growth and bottom-line profitability. While Chewy has a strong history of beating earnings estimates, revenue growth has been a concern.

Revenue and EPS: The most direct indicators of performance.

Active Customers: Analysts are projecting an active customer base of around 20.82 million, an increase from 20.00 million in the same quarter last year. Growth in this metric indicates a broadening customer base.

Net Sales Per Active Customer: The consensus estimate for this metric is approximately $589, which would be a 4.2% increase year-over-year. This shows that Chewy is successfully increasing the spending of its existing customers, a key to long-term profitability.

Autoship Sales: Autoship is the company's subscription-based service for recurring orders. It represents a significant portion of Chewy's sales (82% as of the last report) and provides a highly predictable revenue stream. Any commentary on the growth or stability of this metric will be closely watched.

Strategic Initiatives: Investors will be keen to hear updates on the company's new ventures, including:

Chewy Health: The rollout of its veterinary clinics and pharmacy services is a major growth driver. Commentary on the performance and expansion plans for this segment will be key.

Chewy+ Paid Membership: The company's new paid membership program is aimed at increasing customer loyalty and recurring revenue. Updates on its adoption and early results are important.

International Expansion: Chewy's recent expansion into Canada is its first international venture. Investors will be looking for a progress report on this new market.

Chewy Inc (CHWY) Price Target

Based on 22 analysts from Tiger Brokers offering 12 month price targets for Chewy in the last 3 months. The average price target is $44.83 with a high forecast of $52.00 and a low forecast of $27.00. The average price target represents a 7.72% change from the last price of $41.62.

Short-Term Trading Opportunities

Chewy's stock has shown high volatility around earnings reports, and the outcome of this report could lead to a significant price swing.

Potential for a Rally: A strong beat on both revenue and EPS, combined with positive commentary on active customer growth and new business initiatives, could trigger a sharp rally. Chewy has a history of beating earnings, and a positive surprise could be amplified by renewed investor confidence in its growth story.

Risk of a Sell-off: While the company has been profitable, its core business faces headwinds from a tough macroeconomic environment and intense competition. A revenue miss or disappointing customer growth numbers could lead to a significant sell-off. Any signs of a slowdown in its Autoship or Chewy Health segments would also weigh heavily on the stock.

Technical Analysis - Exponential Moving Average (EMA)

CHWY have been on a negative momentum for quite a long period, but we are seeing that it is trading above the short-term key level, but we need to see a strong beat on both revenue and EPS, combined with positive commentary on active customer growth and new business initiatives, to begin a short-term rally post earnings.

But there have been headwinds for CHWY due to tough macroeconomic environment and intense competition, we could see selling off if CHWY failed to meet the expectations and if the commentary on active customer growth pared in performance.

Summary

Chewy Inc. (CHWY) is set to report its fiscal Q2 2025 earnings before the market opens on Wednesday, September 10, 2025. The key focus for investors will be on the company's ability to balance revenue growth with profitability.

Analysts are projecting Q2 revenue of approximately $3.1 billion, representing a 7.8% year-over-year increase. The consensus for non-GAAP EPS is $0.33 per share, a significant jump from last year, highlighting the company's focus on operational efficiency.

Investors will also be closely monitoring active customer growth and the performance of new initiatives like Chewy Health and its international expansion into Canada. A positive surprise on these metrics could lead to a short-term rally. Conversely, a revenue miss or signs of slowing customer growth could trigger a sell-off, as the stock's valuation hinges on its long-term growth story. The report will provide a crucial update on how the company is navigating a challenging macroeconomic climate.

Appreciate if you could share your thoughts in the comment section whether you think CHWY would be able to show a good growth in its active customer, and we should be able to see strong performance of new initiatives like Chewy Health and its international expansion into Canada.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.