Chevy shares rise on positive report
2022.12.09 10:33
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Chevy shares rise on positive report
Budrigannews.com – (NYSE) Chewy After the company reported earnings for the third quarter following the close on Thursday, which exceeded consensus estimates and raised its target for adjusted EBITDA for the full year, shares rose on Friday morning.
“Chewy’s third-quarter results showed accelerating double-digit topline growth, sustained gross margin expansion, and solid free cash flow generation,” the online pet products retailer said. “Revenue for the quarter came in at $2.53 billion, rising 14.5% year-over-year and coming in above the consensus estimate of $2.46 billion.”
“Our ability to get big fast and get fit fast, regardless of the macro environment, is yet another proof point,” stated Sumit Singh, Chief Executive Officer of Chewy. “We are simultaneously driving top line growth and expanding margins.”
Singh added that the outcomes demonstrate “a clear indication of the pet category’s resilience.”
Chewy increased its full-year adjusted EBITDA going forward. Wolfe Research analyst Deepak Mathivanan commented on the results, stating that “full-year net sales are seen from $10.02B to $10.04B.” It now sees an adjusted EBITDA margin between 2.3% and 2.4%.
Due to stable demand, solid execution, and inflation passing through, CHWY’s F3Q surpassed expectations. On LT initiatives, the company is making good progress. Due to concerns regarding MT growth and valuation, we maintain our PP rating.”
In a note, analysts at Morgan Stanley informed investors: Improved 3Q revenue and adj. The EBITDA results were as expected, with the gross margin standing out. Pricing, lower fuel costs, and initiatives in fulfillment and logistics contributed to a 20% flow-through rate in the third quarter, up from 22% in the previous quarter.
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As 3P data suggests, “4Q has not slowed compared to 3Q’s +14% result,” 4Q guidance appears conservative on both the top and bottom lines (10-11% rev growth and implied 1.2% margin).”
Lastly, analysts from UBS stated that there was “not enough to chew on.”
“We believe that CHWY’s 3Q results were superior to what many anticipated.” In addition, its automated FCs are contributing to significant productivity enhancements.
However, given that inflation continues to moderate and discretionary demand continues to weaken, we question the viability of its NSPAC growth. As a result, we believe that the stock will remain range-bound in the short term,” the analysts wrote.
At the start of Friday’s session, Chewy shares increased by 5%.
