Chewy said that overall sales rose nearly 14% from a year ago, to about $2.4 billion. Sumit Singh, Chewy’s CEO, said in the earnings release that the strong results “are a testament to the resiliency of the pet category.”
Chewy reported its latest earnings on the same day as video game retailer and meme stock phenomenon GameStop, the company that now has Chewy co-founder Ryan Cohen as its chairman and top investor.
But both GameStop and Chewy have fallen this year, due to concerns about slowing consumer spending as the Federal Reserve starts to raise interest rates to fight inflation. GameStop has dropped nearly 15% in 2022 while Chewy has plummeted more than 50%.
Despite the good earnings news, one analyst cut his price target on Chewy’s stock Thursday. Brian Fitzgerald of Wells Fargo lowered his target from $65 a share to $55, citing concerns about “higher interest rates and lower sector valuations.”
A price of $55 would still be double Chewy’s current level, but Fitzgerald noted that there are “new challenges” on the macroeconomic front, namely “weaker consumer discretionary demand” as a result of inflation fears and Fed rate hikes.