Chewy shares have fallen sharply after the company lowered its fiscal 2026 net sales outlook to $13.40-$13.55 billion from $13.6-$13.75 billion, pushing the stock to a forward 12-month sales multiple of 0.56X, near the low end of its five-year range. The decline reflects management's caution on premiumization and product attachment rates among existing customers, even as Autoship customer sales rose 10.5% year over year to $2.83 billion in the first quarter and active customers increased 3.6% to 21.5 million. First-quarter adjusted EBITDA grew 31.3% to $253.1 million with a margin of 7.5%, and full-year adjusted EBITDA margin guidance of 6.6-6.8% still implies about 100 basis points of expansion at the midpoint. However, near-term headwinds include expected second-quarter gross margin contraction, acquisition and integration costs, and $10-$15 million in net interest expense from a Term Loan B. Zacks Investment Research maintains a Neutral rating on the stock, noting that while valuation appears inexpensive, softer consumer trends and execution costs keep the risk-reward balanced.
Chewy IncLowered fiscal 2026 net sales outlook and expected Q2 gross margin contraction
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