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Investing.com – Chewy (NYSE:CHWY) stock slumped 9% in Friday’s premarket trading after the company reported wider-than-expected losses while sales matched estimates for the third quarter.
Adding to the woes was the company’s cut in annual revenue guidance at the top end, which is now sees at $8.9 billion, down from September’s $9 billion forecast. The guidance now matches its lower-range forecast of $8.9 billion.
Several brokerages including JPMorgan, Barclays and Wells Fargo lowered their price targets for the stock. UBS sees the stock hitting $46, down from its previous target of $71.
The company blamed supply chain disruptions, labor shortages and higher inflation for its lackluster earnings that, at around $32 million, were just a tad lower than the same quarter last year. Share-based compensation to staff also contributed to the losses.
The company has previously said that part-time shifts to better optimize interval-level labor forecasting and provide more flexibility to staff is one of the ways it has adopted to overcome manpower shortage.
Net sales were up 24% at $2.21 billion and CEO Sumit Singh said the pace of active customer acquisitions remains above pre-pandemic levels. Retention rates for customers continues to track in-line with historical levels, he said.
Active customers increased by around 15% year-on-year to close October at over 20 million. Net sales per active customer rose over 15% to $419.
