(NYSE: CHWY) shares jumped immediately following the company's first-quarter earnings update. The announcement showed surprisingly strong sales and earnings growth. It turns out that pet owners are prioritizing what they spend in this area even as they pull back on other parts of their budgets.

Yet Chewy's stock is still underperforming the S 500 in 2023, implying that Wall Street is more focused on challenges around sluggish industry growth. That's just a short-term issue that's not likely to seriously threaten the bullish investing thesis.

On the other hand, Chewy's expanding profitability is a great sign for the business -- and for shareholders' returns. Let's take a closer look.

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Source Fool.com