Chewy Stock Sinks 15% As Q2 Net Income Falls: Here's What This Analyst Has To Say

Analysts at Mizuho noted that Chewy shares are down meaningfully on "another OpEx miss" and incremental investments planned for the second half.

Chewy Inc (CHWY) shares tumbled 15% during midday trading on Wednesday after the company posted a fall in second-quarter (Q2) net income due to higher operating expenses.

The company’s quarterly net income fell to $62 million, compared to $299.1 million a year ago. Operating expenses in the quarter rose 7.5% to $872.5 million.

Retail sentiment on Chewy remained unchanged in the ‘extremely bullish’ territory, with chatter at ‘extremely high’ levels, according to data from Stocktwits.

Analysts at Mizuho noted that Chewy shares are down meaningfully on "another OpEx miss" and incremental investments planned for the second half, according to TheFly.

The firm said that even though it acknowledges that re-investing upside is "disappointing," it thinks this could expedite revenue upside and believes shares being off by more than 15% "seems like too much."

Mizuho also added that Q2 results came in slightly ahead of expectations. The firm maintained its ‘Outperform’ rating and $50 price target on Chewy.

Chewy’s Q2 revenue came in at $3.10 billion, edging past Wall Street expectations of $3.08 billion, according to data compiled by Fiscal AI. Its adjusted earnings per share (EPS) of $0.33 came in line with analysts’ estimates.

Separately, the company also announced the launch of “Get Real,” a new line of minimally processed, fresh dog food available only at Chewy as part of its efforts to build on the growing demand for pet food.

Shares of Chewy have gained 4% this year and have jumped over 15% in the last 12 months.

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