CEO Sumit Singh says the pet segment is resilient, and Chewy will continue to gain market share.

Chewy Inc. (CHWY) issued its first-quarter results and current-quarter forecast on Wednesday, which exceeded Wall Street's expectations. Still, the stock dropped 11%.

The slide in shares, their steepest intraday loss in nearly two years, left retail investors confused. Some users on Stocktwits called it an "overreaction" by the market.

Chewy has demonstrated strong financial performance in the last few quarters, indicating business momentum. Its shares hit an over two-year high earlier this week and are up 21.7% year-to-date.

In an investor note released last week, Jefferies acknowledged the business's strength but warned that a high stock multiple and the absence of near-term catalysts would be headwinds. It downgraded its rating to 'Hold' before Chewy's report.

Chewy’s otherwise strong first-quarter results showed a 10-basis-point drop in the company's gross margin to 29.6%, likely raising concerns about profitability.

One Stocktwits user said, "I don't think the 12% drop we got today is justified. Again, the market overreacted."

Another laid out expectation for a "strong recovery" on Thursday.

The overall retail sentiment shifted to 'extremely bullish' from 'bullish' the day prior. Message volume jumped 287% in the past 24 hours.

CHWY sentiment and message volume as of June 11 | Source: Stocktwits

The pet supplies retailer said net sales increased 8.3% to $3.12 billion in Q1, above analysts' expectations of $3.08 billion.

Adjusted earnings of $0.35 per share, also above the expected $0.33.

For fiscal Q2, the company expects adjusted earnings of $0.30 to $0.35 per share on net sales of $3.06 billion to $3.09 billion. Analysts expect an adjusted EPS of $0.31 for sales of $3.04 billion.

"These results are a testament to the resiliency of the pet category and underscore the strength of Chewy's value proposition and our ability to continue to gain market share," CEO Sumit Singh said in a statement.

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