Chewy, Inc. CHWY highlighted that its Vet Care business continues to scale in line with the economic framework outlined at the company’s recent investor event. The total clinic portfolio delivered triple-digit revenue growth in the second quarter, underscoring the momentum in the Vet Care business. The continued scaling of Chewy Vet Care and its triple-digit revenue growth reflect the progress the business is making against the economic framework previously outlined by management.
Chewy Vet Care continues to demonstrate strong performance across several key areas. The business is delivering strong customer satisfaction while maintaining attractive veterinarian productivity and retention. It is also demonstrating compelling four-wall economics, another positive indicator of the performance of its clinic model. Importantly, Chewy Vet Care is also driving incremental engagement across the broader ecosystem. Together, these factors underscore the progress Chewy Vet Care is making as the business continues to scale.
Chewy is encouraged by the progress across its Chewy Health business, supported by the early performance of Modern Animal and the continued scaling of Chewy Vet Care. As these businesses continue to grow, the company believes they can deepen customer engagement and expand wallet share, while becoming an increasingly meaningful contributor to Chewy’s long-term growth and earnings power. Importantly, the company’s outlook does not depend on a meaningful recovery in the broader pet category, while management continues to see meaningful growth opportunities as Chewy Health scales.
Overall, the continued expansion of Chewy Health is expected to deepen customer engagement, expand wallet share and become an increasingly meaningful contributor to Chewy’s long-term growth and earnings power.
The Zacks Rundown for CHWY
Shares of this Zacks Rank #4 (Sell) company have lost 28% in the past six months against the industry’s growth of 16.7%.
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From a valuation standpoint, CHWY trades at a forward price-to-earnings ratio of 19.42, slightly lower than the industry’s average of 20.23.
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The Zacks Consensus Estimate for CHWY’s current and next fiscal year earnings implies a year-over-year rise of 20.5% and 21.4%, respectively.
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Stocks to Consider
Some better-ranked stocks have been discussed below:
Petco Health & Wellness Company, Inc. WOOF operates as a pet specialty retailer, focusing on enhancing the lives of pets, pet parents, and its Petco partners in the United States, Mexico, Puerto Rico, and Chile. At present, WOOF carries a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WOOF’s current fiscal-year sales and earnings indicates growth of 0.6% and 100%, respectively, from the year-ago figures. WOOF delivered a trailing four-quarter earnings surprise of 166.7%, on average.
Phibro Animal Health Corporation PAHC operates as an animal health and mineral nutrition company in the United States, Latin America and Canada, Europe, the Middle East, Africa, and the Asia Pacific. PAHC presently carries a Zacks Rank of 1.
The Zacks Consensus Estimate for PAHC's current fiscal-year sales and earnings implies growth of 3.8% and 8.7%, respectively, from the year-ago actuals. PAHC delivered a trailing four-quarter earnings surprise of 18.4%, on average.
Central Garden & Pet Company CENTA produces and distributes various products for the lawn and garden and pet supplies markets in the United States. It currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Central Garden’s current financial-year sales implies a decline of 3.9%, and the same for earnings implies growth of 9.2% from the year-ago reported numbers. Central Garden delivered a trailing four-quarter earnings surprise of 41.8%, on average.
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Chewy (CHWY): Free Stock Analysis Report
Petco Health and Wellness Company, Inc. (WOOF): Free Stock Analysis Report
Phibro Animal Health Corporation (PAHC): Free Stock Analysis Report
Central Garden & Pet Company (CENTA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).