What Happened?
Shares of e-commerce pet food and supplies retailer Chewy (NYSE:CHWY) fell 9.7% in the afternoon session after the company reported underwhelming first-quarter 2025 results. Margins dipped slightly and customer growth was modest. Free cash flow margin also declined, highlighting both top- and bottom-line weaknesses. Overall, this was a softer quarter.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Chewy? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Chewy’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 17.9% on the news that the company reported strong second-quarter 2024 results, with revenue, active customers, and EPS exceeding Wall Street's expectations. In addition, its EBITDA margin increased year on year, and free cash flow improved. Improved monetization also played a role in the results, as net sales per active customer clocked in at a record $565. Overall, this was an impressive quarter for the company.
Chewy is up 22.6% since the beginning of the year, but at $41.52 per share, it is still trading 13.9% 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 $844.14.
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