1 Big Risk for Chewy Stock
Online pet retailer (NYSE: CHWY) started to lose customers in the second quarter. The company's active customer base dropped 0.6% year over year to 20.4 million. While overall revenue rose 14.3% and the company's remaining customers ramped up their spending, this drop in active customers isn't a good sign.
The company pointed out in its letter to shareholders that customers are "being more discerning." In other words, the pandemic-era boom in pet spending seems to be coming to an end as inflation eats away at household purchasing power.
The good news for Chewy is that the weakness was largely attributed to hard goods, which include toys and other non-consumables. Revenue for consumables, by far Chewy's biggest product category, grew by 17% year over year in the second quarter. Chewy's Autoship program allows customers to set up recurring purchases of pet food, which is no doubt a major source of customer loyalty.
Source Fool.com
Chewy Inc Stock
With 37 Buy predictions and 4 Sell predictions Chewy Inc is one of the favorites of our community.
As a result the target price of 27 € shows a slightly positive potential of 7.74% compared to the current price of 25.06 € for Chewy Inc.
