What Happened?
Shares of e-commerce pet food and supplies retailer Chewy (NYSE: CHWY) fell 15.8% in the morning session after its second-quarter financial results failed to impress investors, despite largely meeting Wall Street's forecasts.
Chewy reported adjusted earnings of $0.33 per share, which was in line with analyst estimates, and net sales of $3.10 billion, representing a slight beat on expectations and an 8.6% increase year-over-year. The sharp negative reaction in the stock price suggests that the solid, but not spectacular, results were insufficient to meet higher investor expectations. With key metrics only meeting, rather than substantially beating, forecasts, it appears the market was looking for a stronger performance to push the stock higher.
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What Is The Market Telling Us
Chewy’s shares are quite volatile and have had 16 moves greater than 5% over the last year. But moves this big are rare even for Chewy and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 8 days ago when the stock dropped 3.6% on the news that the major indices continued to retreat amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
Chewy is up 3.2% since the beginning of the year, but at $34.95 per share, it is still trading 27.5% below its 52-week high of $48.21 from June 2025. Investors who bought $1,000 worth of Chewy’s shares 5 years ago would now be looking at an investment worth $585.53.
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