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Chewy (CHWY) Lined Up for Q3 Earnings: What's in the Cards?

Chewy, Inc. CHWY is expected to report top-line growth in its third-quarter fiscal 2022 results results on Dec 8, after the market close. The Zacks Consensus Estimate for quarterly sales stands at $2,451 million, indicating an 11% increase from the last fiscal-year quarter’s reported figure.

However, Chewy’s bottom line is expected to decline from the last fiscal-year quarter’s reported figure. The Zacks Consensus Estimate for loss in the fiscal third quarter has been stable over the past 30 days at 8 cents a share. CHWY reported a loss per share of 3 cents in the year-earlier quarter.

This pet food and other pet-related supplier delivered an earnings surprise of 64.5%, on average, in the trailing four quarters. In the last reported fiscal quarter, Chewy recorded an earnings surprise of 141.7%.

Key Factors to Note

Chewy’s sales performance for the fiscal third quarter is quite likely to have benefited from its e-commerce channels, product assortments and innovation efforts.  Management has been making technology upgrades for its website and online platforms for some time to drive online sales.

Higher product demand, robust consumer engagement and growth in active customers are steadily contributing to results. Additionally, CHWY’s pharmacy business bodes well.

However, the company’s quarterly performance might have been hurt by a tough macroeconomic environment, including headwinds like supply-chain issues and global inflationary pressures. These factors coupled with any deleverage in selling, general and administrative expenses might have affected CHWY’s performance in the fiscal third quarter.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Chewy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here as explained below. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Chewy Price and Consensus

Chewy Price and Consensus
Chewy Price and Consensus

Chewy price-consensus-chart | Chewy Quote

Chewy currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are three companies worth considering as our model shows that these have the right combination of elements to beat on earnings this season:
    
lululemon athletica LULU currently has an Earnings ESP of +0.27% and a Zacks Rank of 2. LULU is likely to register an increase in the bottom line from the year-ago fiscal quarter’s reported figure in its third-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings has been stable at $1.95 per share over the past 30 days, suggesting 20.4% growth from the year-ago fiscal quarter’s reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.

lululemon athletica’s top line is expected to rise from the prior-year fiscal quarter’s reported number. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.81 billion, suggesting a 24.5% rise from the figure reported in the prior-year fiscal quarter. LULU delivered an earnings beat of 10.4%, on average, in the trailing four quarters.

Ulta Beauty ULTA currently has an Earnings ESP of +2.70% and a Zacks Rank of 2. The company is likely to register a decline in the bottom line in its fourth-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $5.32 suggests a decline of 1.7% from the year-ago fiscal quarter.

Ulta Beauty’s top line is expected to have increased year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.92 billion, which indicates an increase of 7% from the figure reported in the prior-year fiscal quarter. ULTA has a trailing four-quarter earnings surprise of 26.2%, on average.

Sprouts Farmers SFM currently has an Earnings ESP of +1.09% and a Zacks Rank of 2. The company is expected to register bottom-line growth when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for the quarterly earnings per share of 37 cents suggests growth of 15.6% from the year-ago quarter’s fiscal reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sprouts Farmers’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $1.56 billion, indicating an increase of 4.4% from the year-ago fiscal quarter. Sprouts Farmers has a trailing four-quarter earnings surprise of 10%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report

lululemon athletica inc. (LULU) : Free Stock Analysis Report

Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report

Chewy (CHWY) : Free Stock Analysis Report

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