If you're looking for a winner heading into the holiday season, the pet care business might be your best bet. Chewy Inc. (CHWY) reports third-quarter results Wednesday before the market opens, and analysts think the company could deliver some pleasant surprises on both customer growth and guidance.
The numbers tell an interesting story. Analysts are expecting third-quarter revenue of $3.10 billion, up from $2.88 billion in last year's third quarter, according to data from Benzinga Pro. Chewy has been on a roll lately, beating revenue estimates in three consecutive quarters and seven of the past 10 overall.
On the earnings front, analysts expect 12 cents per share for the third quarter, down from 20 cents per share a year ago. But here's the thing: Chewy has beaten earnings estimates for more than 10 straight quarters. The company's own guidance called for revenue between $3.07 billion and $3.10 billion and earnings per share between 28 and 33 cents.
What the Smart Money is Saying
JPMorgan analyst Doug Anmuth is particularly bullish, maintaining an Overweight rating with a $45 price target. He expects strong Q3 results and even stronger full-year guidance. Anmuth said Chewy is "leaning into growth initiatives," which should support market share and revenue gains.
The analyst predicts Chewy will add more than 160,000 active customers in the third quarter and 718,000 new customers for the full fiscal year. "With strong execution, we believe CHWY could modestly raise FY25 guidance above the current $12.50B-$12.60B net sales," Anmuth noted.
The Street is generally positive, though not universally so. UBS maintained a Neutral rating but lowered its price target from $43 to $41. Citigroup kept its Buy rating but trimmed its target from $48 to $42. Mizuho maintained an Outperform rating with a $50 price target.
Why the Holiday Season Matters
Here's what makes this earnings report particularly interesting: the third quarter covers August through October, which means the guidance might matter more than the actual results. The fourth quarter will capture Black Friday and the holiday shopping season, and Bank of America Research analyst Michael McGovern highlighted pet care as a recent holiday e-commerce winner.
McGovern, who has a $46 price target on Chewy, said millennials and Gen Z consumers are driving demand for the pet sector. A recent report showed the pet health care sector is seeing "continued demand," which should benefit Chewy.
The Autoship Advantage
The real story at Chewy is its Autoship program, a recurring delivery service that represents over 80% of total sales. In the second quarter, Autoship customer sales jumped 14.9% year-over-year to $2.58 billion. That's the kind of recurring revenue that makes analysts happy.
The company highlighted strong sales, active customer growth and increased share of wallet in the second quarter. After those results, Chewy raised its full-year sales guidance, and investors are wondering if we'll see another guidance bump this time around.
As for the stock, Chewy shares traded down 1.01% at $34.27 on Tuesday, sitting in a 52-week range of $29.83 to $48.62. The stock is up 2.6% year-to-date in 2025.
