Chewy, Inc. CHWY is scheduled to report second-quarter fiscal 2026 earnings results on Sept. 9, before the opening bell. The key question for investors is whether the online pet retailer can sustain its solid sales momentum and expanding profitability while navigating a dynamic consumer environment and ongoing investments in customer growth, healthcare and other strategic initiatives.
The Zacks Consensus Estimate for second-quarter revenues stands at $3,322 million, indicating a 6.8% increase from the prior-year reported figure. On the earnings front, the consensus estimate has remained stable at 36 cents a share over the past 30 days, implying a 9.1% rise from the year-ago period.
Chewy has an average trailing four-quarter earnings surprise of 0.8%. In the last reported quarter, this Plantation, FL-based company’s bottom line met the Zacks Consensus Estimate.
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What the Zacks Model Indicates for CHWY’s Q2 Earnings
As investors prepare for Chewy’s second-quarter results, the question looms regarding an earnings beat or miss. Our proven model does not conclusively predict an earnings beat for Chewy this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Chewy has a Zacks Rank #4 (Sell) and an Earnings ESP of -0.61%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Chewy Price, Consensus and EPS Surprise
Chewy price-consensus-eps-surprise-chart | Chewy Quote
Factors Likely to Have Shaped Chewy’s Q2 Outcome
Chewy’s second-quarter performance is likely to have benefited from the continued strength of its recurring-revenue model, particularly the Autoship program. Management indicated that Autoship remained a key source of customer engagement and repeat purchasing, helping support revenue visibility even as the broader consumer environment remains cautious. Healthy reactivation trends, lower churn and improved customer relationship management initiatives also appear to have supported the active-customer base. Increased engagement through Chewy’s mobile app and continued market share gains are likely to have provided additional support to sales during the quarter.
The company’s expanding health and wellness ecosystem is also likely to have remained an important growth driver. Management highlighted increasing health and wellness penetration and broader cross-category engagement as factors supporting customer spending. Chewy Vet Care, in particular, has been positioned as both a customer-acquisition and retention engine, with clinic customers showing deeper engagement with the broader Chewy platform. The continued expansion of veterinary services, together with Chewy’s pharmacy and health offerings, may have helped the company capture a larger share of pet-parent spending and strengthen customer loyalty.
We note that sponsored advertising remained an important contributor to margin improvement, while favorable category mix, fulfillment productivity and disciplined operating expenses continued to support operating leverage. The company has also been embedding automation and artificial intelligence across customer service, pharmacy, fulfillment and marketing workflows, with the aim of lowering costs and better serving customers.
However, the second quarter is likely to have been affected by a more cautious consumer backdrop. Chewy entered the period seeing pressure on premiumization and discretionary product attachment. Management also expected a tougher gross-margin comparison because of nonrecurring pricing benefits recorded in the prior-year period, while elevated carrier fuel surcharges are expected to have weighed on profitability.
Chewy Stock Price Performance
Chewy, which competes with Central Garden & Pet Company CENT and Petco Health and Wellness Company, Inc. WOOF, has seen its shares jump 15.9% over the past three months compared with the industry’s 6.1% rise. Shares of Central Garden & Pet Company have gained 0.6%, while Petco Health and Wellness Company has fallen 0.8% over the said period.
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How Does Chewy’s Valuation Stack Up?
Chewy trades at a discount to the broader industry. The stock currently carries a forward 12-month price-to-sales (P/S) multiple of 0.69, well below the industry average of 1.91. It also trades below its 12-month median P/S multiple of 0.79.
Chewy trades at a discount to Central Garden & Pet Company, which carries a forward 12-month P/S multiple of 0.90, but at a premium to Petco Health and Wellness Company, which trades at a multiple of 0.14.
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Final Words on Chewy
Chewy enters its second-quarter earnings release with encouraging business momentum, supported by Autoship strength, improving customer engagement, healthcare expansion, advertising growth and ongoing operating efficiencies. However, cautious consumer spending, softer discretionary demand, tougher margin comparisons and higher delivery-related costs could temper near-term performance. The earnings setup does not provide a favorable signal for a potential beat, warranting added caution despite the stock’s relatively attractive valuation.
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This article originally published on Zacks Investment Research (zacks.com).