Here's Why Chewy Stock Plunged Today
Shares of pet-centric e-commerce company Chewy (NYSE: CHWY) plunged on Wednesday following the company's release of financial results for the second quarter of 2022. Surprisingly, pet owners are cutting back. And this is why Chewy stock was down 9% as of 1:20 p.m. ET.
In Q2, Chewy's net sales only increased 13% year over year to $2.4 billion, a sharp deceleration from its nearly 27% net sales growth rate in the same quarter last year. One of the biggest reasons for its slowdown was its stagnating customer base. At the end of the quarter, Chewy had 20.5 million active customers, only 2% more than this time last year.
Chewy's net sales per active customer were up 14% year over year to $462, an encouraging sign. However, this number might have been even higher if not for inflation. Since costs are going up, Chewy and other pet companies are charging higher prices. And Chewy's management noted that pet owners are consequently cutting back on discretionary purchases.
Source Fool.com
