(Bloomberg) — Chewy Inc. sank in extended trading after its sales outlook fell short of Wall Street expectations.
The online retailer of pet-care products said Tuesday that it expects sales this fiscal year will be in the range of $10.2 billion to $10.4 billion, below the average analyst estimate of $10.8 billion. The company’s projection for the current quarter trailed all but the very lowest estimates in a Bloomberg survey.
The weaker-than-expected forecast underscores slowing growth for Chewy, which had benefited from a spike in demand when scores of homebound Americans adopted new furry, feathered or scaly friends during the early days of the pandemic. At the same time, the company is facing increasing costs and supply-chain disruptions that have led to more items being out of stock.
“We saw operating conditions in certain areas deteriorate as the quarter unfolded, particularly when omicron’s mid-quarter arrival further disrupted already weakened supply chains across our industry,” the company said in a letter to shareholders that accompanied its fiscal fourth-quarter earnings report. There are signals that gross margin is recovering this quarter, Chewy said.
Chewy shares sank 14% in postmarket trading at 5:16 p.m. New York time. The stock had fallen 35% in the 12 months through Tuesday’s close after more than doubling in the prior year.
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