Chewy outlook cut spurs JP Morgan, TD Cowen to lower targets
Chewy reported Q1 adjusted earnings of 43 cents per share and sales of $3.357 billion, beating estimates, but lowered its FY26 sales outlook to $13.4 billion-$13.55 billion. Analysts from TD Cowen, RBC Capital, Citizens, Baird, Barclays, and JP Morgan reduced price targets. For Q2, Chewy forecast adjusted earnings of 36 cents per share.
*this image is generated using AI for illustrative purposes only.
Chewy, Inc. reported upbeat first-quarter results but lowered its fiscal 2026 sales outlook, prompting several analysts including TD Cowen, RBC Capital, and JP Morgan to reduce their price targets. The online pet retailer's adjusted earnings of 43 cents per share exceeded the 39-cent consensus estimate, while net sales rose 7.7% year over year to $3.357 billion, beating expectations of $3.352 billion. Despite the earnings beat, the company's revised revenue forecast for fiscal 2026 of $13.4 billion to $13.55 billion, down from a prior range of $13.6 billion to $13.75 billion, fell short of the $13.84 billion analyst estimate.
Analyst Reactions
Following the announcement, multiple firms adjusted their ratings and price targets. TD Cowen analyst William Kerr maintained a Buy rating but lowered the price target to $34 from $42. Citizens analyst Andrew Boone maintained a Market Outperform rating but lowered the price target to $28 from $45. Baird analyst Justin Kleber kept an Outperform rating and reduced the price target from $40 to $30. Barclays analyst Ross Sandler maintained an Overweight rating while cutting the price target from $40 to $36. RBC Capital analyst Steven Shemesh maintained an Outperform rating and lowered the price target to $34 from $47. JP Morgan analyst Doug Anmuth maintained an Overweight rating and lowered the price target to $29 from $35.
Q2 Guidance
For the second quarter, Chewy forecast adjusted earnings of 36 cents per share, above the 25-cent analyst estimate. However, the company projected sales of $3.30 billion to $3.33 billion, which is below the consensus estimate of $3.38 billion. Shares of Chewy fell 4.5% to trade at $19.03 on Thursday following the announcement.
| Firm | Analyst | Rating | Previous Target | New Target |
|---|---|---|---|---|
| Baird | Justin Kleber | Outperform | $40 | $30 |
| Barclays | Ross Sandler | Overweight | $40 | $36 |
| Citizens | Andrew Boone | Market Outperform | $45 | $28 |
| JP Morgan | Doug Anmuth | Overweight | $35 | $29 |
| RBC Capital | Steven Shemesh | Outperform | $47 | $34 |
| TD Cowen | William Kerr | Buy | $42 | $34 |
What specific factors are driving Chewy's reduced fiscal 2026 sales outlook despite strong Q1 performance?
How will Chewy's lowered revenue forecast impact investor confidence in the long-term growth of the online pet retail market?
What strategies might Chewy employ to bridge the gap between its revised sales outlook and analyst expectations?
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